Pact means US$1.5 billion more for the country
Meet the new pirates of 21st century!
"CEO: We’re here to stay, unless we’re expelled"
Santo Domingo.-
After months of talks, protests and proposals, Dominican Republic and Barrick
Gold Corp. on Wednesday reached a new agreement on the contract for the mine at
Pueblo Viejo, Cotuí (northeast).
In a press conference after a meeting of several hours between senior officials and Barrick Gold executives in the National Palace, the government announced the pact to amend the contract, to be submitted to Congress as soon as possible.
"The objective of this review was to achieve a more balanced agreement for both parties and more in line with the Dominican reality, so we will sign a memorandum of understanding between the parties," said Presidency chief of staff Gustavo Montalvo.
Among other points, the agreement will raise Government revenue by more than US$1.5 billion over the project's duration, in addition to the US$10.0 billion projected in March 2013, and raises the profit split from 37.1% to 51.3 % for the country, and lowers Barrick’s from 62.9% to 48.7%
According to the document read by Montalvo, the projected tax revenue is US$11.6 billion, of which Pueblo Viejo will provide US$2.2 billion during the 2013-2016 period, subject to a gold price of US$1,600 per ounce. "The parties agreed to eliminate the 10% internal rate of return for the tax on the stake of net income to take effect."
The agreement eliminates Barrick’s privilege of starting payments to the State when the investment of capital is completed, for which tax payment tax would be immediate.
With the provisions, it will now take the Canadian miner until 2026 to recover its investment, and not bu 2016 as was stipulated.
Barrick Gold Pueblo Viejo CEO
For Barrick Gold Pueblo Viejo CEO Manuel Rocha the agreement is evidence of the miner’s commitment with Dominican Republic, from where he affirms will leave only if expelled. “We believe in the Dominican Republic ,we believe the democratically elected government here, what’s needed now is that we both do our part, it’s clear that Barrick Gold didn’t come just for a bit, we came to stay. We will work to stay unless we are expelled.”
________________________________________________________________________In a press conference after a meeting of several hours between senior officials and Barrick Gold executives in the National Palace, the government announced the pact to amend the contract, to be submitted to Congress as soon as possible.
"The objective of this review was to achieve a more balanced agreement for both parties and more in line with the Dominican reality, so we will sign a memorandum of understanding between the parties," said Presidency chief of staff Gustavo Montalvo.
Among other points, the agreement will raise Government revenue by more than US$1.5 billion over the project's duration, in addition to the US$10.0 billion projected in March 2013, and raises the profit split from 37.1% to 51.3 % for the country, and lowers Barrick’s from 62.9% to 48.7%
According to the document read by Montalvo, the projected tax revenue is US$11.6 billion, of which Pueblo Viejo will provide US$2.2 billion during the 2013-2016 period, subject to a gold price of US$1,600 per ounce. "The parties agreed to eliminate the 10% internal rate of return for the tax on the stake of net income to take effect."
The agreement eliminates Barrick’s privilege of starting payments to the State when the investment of capital is completed, for which tax payment tax would be immediate.
With the provisions, it will now take the Canadian miner until 2026 to recover its investment, and not bu 2016 as was stipulated.
Barrick Gold Pueblo Viejo CEO
For Barrick Gold Pueblo Viejo CEO Manuel Rocha the agreement is evidence of the miner’s commitment with Dominican Republic, from where he affirms will leave only if expelled. “We believe in the Dominican Republic ,we believe the democratically elected government here, what’s needed now is that we both do our part, it’s clear that Barrick Gold didn’t come just for a bit, we came to stay. We will work to stay unless we are expelled.”
Let's do some quick math here
Barrick’s 27 shipments since Nov. 11 were reportedly 9,040 kilos of gold and 24,357 of silver
kilo = 35.27 oz
Gold oz price :US 1600
9,040 kilos x US1,600.00 x 35.27=
U$510,145,280.00
__________________________
Silver: U$25.- per oz
US25 x 35.27 oz x 24, 357 kilos=
U$21,476,784
___________________
Total taken by Barrick gold till now :
U$531 Millions in 6 moth of operations
Based on previous numbers: Forecast a year of BG; U$1,062 millions
So, according to 7dias.com.do the dominican state will get U$11,600 millions for the life of that mine for 25 years .
U$11,600 / U$1062: : 10 years to achieve that goal for Dominicans.. the other 15 years are Barrick Gold 's time.
So the deal is not 49 %-51% as they initially said before.
The other open questions are these..
- -What happens with the retroactive payment?Is there going to be any as Danilo promised?
- -When is going to be the first payment and for how much?
- -Any serious reforestation plans for the future?
- -Are they going to pay the fines for smuggling dore?
- -When are they going to pay the millions they already owe to Dominican state? Arent they?
- Are they going to have a water treatment facility to clean the cyanide and mercury?Do they talk about it?
- What about any plans for clean water and sanitation for the community, the second poorest one in DR??
- Three years ago , people used to have their own water, now they dont have water or river because it's so polluted, so they are allow to take only 2 gallons of water per family from a water truck, because BG is using their water for the mercury and cyanide procedure.
- What can expect the people from Cotui in the next 25 years? Eviction of everybody?
- How are they going to clean their toxic mess in Hatillo dam, and the rivers of Cotui?
- -Are they going to provide employment for Dominicans? To have 97% of foreign crew is against dominicanl law..Right?
-How are they going to measure the already taken dore from DR? What is the procedure to put a value on the millions already taken away..? Or the one is going to be taken away in the future? Or our gold don't have a value no more?
I have to agree that there is a big improvement over the last contract,and some people are super optimist, but not everything is clear.
Again.. Now we have more questions than answers..
In Pakistan, we have kicked JV of Barrick Gold + Antofogasta last year and all their sabre rattling comes to nothing.
ReplyDeleteDominican Republic most not negotiate on weaker terms cuz the wealth belongs to hers, the company is only the contractor with capital, that is it.
regards,