JOHANNESBURG (miningweekly.com) – London-listed Chaarat Holdings is preparing to sign a so-called stabilisation agreement with the government of Kyrgyzstan, which will protect the company from any tax increases during the life of a project.
Chaarat, which is developing the Tulkabash heap-leach project in that country, said on Monday that the stabilisation agreement provided for decreases in the tax rate.
The company has also begun work to conclude an investment agreement, which will enshrine the right to seek international arbitration in case of any future disputes with the government.
In a shareholder update following his recent visit to Kyrgyzstan, chairperson Martin Andersson said that Chaarat’s in-country team was part of the group that was consulted during the formation of legislation affecting mining companies and through this group, it was involved in the drafting of the stabilisation legislation.
“We are one of the leading members of the International Business Council (IBC), which represents companies who together contribute in excess of 55% to the State budget. A study of the mining sector has been commissioned by the IBC to provide input to the continuing consultation between the private sector and government on how to balance the interests of industry and country for the benefit of all stakeholders,” Andersson said.
The Tulkabash project has all the necessary approvals in place for production to start in 2019. Chaarat is completing a bankable feasibility study for the project. Based on its current plans of a processing capacity of 2.8-million tonnes of ore a year, Tulkubash will produce between 60 000 oz/y and 70 000 oz/y of gold in the five years that the mine will operate.