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May 8, 2013 /PRNewswire/ -
(TSX: G, NYSE: GG) — announced that Barrick Gold Corporation ("Barrick") today reported that Pueblo Viejo Dominicana Corporation ("PVDC") has reached an agreement in principle with the Government of the
Dominican Republic concerning amendments to the Pueblo Viejo Special Lease Agreement (SLA). The Pueblo Viejo mine is operated by PVDC, which is jointly owned by Goldcorp (40%) and Barrick (60%).
The agreement in principle comes after eight months of constructive discussions between PVDC and the Government of the
Dominican Republic. The agreement in principle preserves the economic value of the Pueblo Viejo mine, while also addressing the fiscal objectives of the country, in a way that will provide stability for both parties moving forward.
PVDC is one of the largest foreign investors in the
Dominican Republic and it is in the company's long-term interest to support the economic stability and development of the country, where Pueblo Viejo will be operating for the next three decades.
If the proposed amendments are implemented and entered into force, revenues to the Government of the
Dominican Republic will be increased and brought forward via a number of proposed changes. To achieve this objective, amendments to the SLA, which will be mutually agreed upon by the parties, could include items such as the following:
Elimination of a 10% return embedded in the initial capital investment for the purposes of the NPI;
An extension to the period over which PVDC will recover its capital investment;
A delay of application of NPI deductions; and
A reduction in depreciation rates
A graduated minimum tax will be established. The tax will be adjusted up or down based on metal prices. The annual minimum tax rate will be reset every three years and will be equivalent to 90% of the taxes that would have been payable to PVDC over the same period. The details for the implementation of the minimum tax are to be mutually determined by the parties.