DOMINICAN REPUBLIC – Pueblo Viejo Dominicana Corp. and the government of the Dominican Republic have reached an agreement in princple concerning a special lease agreement for the Pueblo Viejo gold mine. PVDC is a joint venture of Toronto's Barrick Gold (60%) and Vancouver's Goldcorp (40%).
The parties have been stuggling for eight months to reach an agreement. At times the task seemed so impossible that the local government embargoed shipments of gold from the country.
If the amendments come into force as proposed, depreciation rates will be reduced, and the period over which PVDC recovers its capital will be extended. Adjustments to the net profit tax (NPI) including the elimination of a 10% return embedded in the initial capital investment and a delay in the application of NPI deductions. The proposed agreement would also set a corporate income tax rate of 25%, a net smelter royalty of 3.2% and a net profits tax (NPI) of 28.75%.
The economic benefit to the Dominican Republic over the 25-year-plus life of the Pueblo Viejo project would be approximately US$1.5 billion.
Pueblo Viejo is a low cost producer of about 625,000 to 675,000 oz of gold, having begun commercial production in January 2013. Visit Barrick.com to learn more.
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