Business
Kinross reaches terms with Government of Mauritania to enhance partnership
(All dollar amounts are expressed in U.S. dollars, unless otherwise noted.) TORONTO, June 15, 2020 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX:K;
About this update from Kinross Gold Corporation
[{"type":"text","content":" (All dollar amounts are expressed in U.S. dollars, unless otherwise noted.) TORONTO, June 15, 2020 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX:K; NYSE:KGC) (“Kinross”) is pleased to announce today that it has reached an agreement in principle (“agreement”) with the Government of Mauritania (“Government”) to enhance the parties’ partnership. The key terms of the agreement, which remain subject to definitive documentation, are the culmination of discussions between Kinross and the Government that balance the interests of both parties. The terms contemplate reasonable commercial trade-offs intended to provide certainty and resolution of outstanding matters. Key terms of agreement Under the terms of the agreement, the Government will provide Kinross with a 30-year exploitation license for Tasiast Sud under the 2008 Mining Code and the 2012 Mining Convention, granted with expedited permitting and the possibility of early mining. The agreement also provides for the reinstatement of the tax exemption on fuel duties1 and the repayment by the Government to Kinross of approximately $40 million in outstanding VAT refunds with an agreed payment schedule through 2025. Kinross will make a $10 million payment to the Government after completion of the definitive agreements to resolve disputed matters related to fuel use and tax exemptions. In addition, upon receiving the exploitation license for Tasiast Sud, Kinross will make a $15 million payment to resolve disputed matters arising out of Kinross’ prior application to convert the Tasiast Sud exploration license into an exploitation license. At Tasiast, Kinross has also volunteered to update its existing fixed 3% royalty payable under the 2006 Tasiast Mining Convention (the “2006 Convention”). While the 2006 Convention remains in full force and effect for Tasiast, the mining laws of Mauritania have evolved in a manner that is consistent with other African mining jurisdictions. Accordingly, Kinross decided it was appropriate to pay an escalating royalty tied to the price of gold1 that aligns with the 2008 Mining Code (that replaced the 1999 Mining Code) and the 2012 Mining Convention, and is comparable with other royalties in the region. A renewed partnership approach for Tasiast Sud contemplates the Government receiving a 15% free carried interest in Tasiast Sud with an optio...