Kinross' Tasiast operations in Mauritania.
Canada-based gold miner Kinross Gold has reached an in-principle agreement with the government of Mauritania, which the company says will deliver increased stability and position its Tasiast mine for long-term success.
The agreement was a further sign of a “positive” foreign investment climate in Mauritania, Kinross president and CEO Paul Rollinson commented in a statement on Monday.
Under the terms of the agreement, the government would provide Kinross with a 30-year exploitation licence 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 duties and the repayment by the government to Kinross of about $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 licence for Tasiast Sud, Kinross will make a $15-million payment to resolve disputed matters arising out of the miner’s prior application to convert the Tasiast Sud exploration licence into an exploitation licence.
At Tasiast, Kinross has also volunteered to update its existing fixed 3% royalty payable under the 2006 Tasiast Mining Convention. The miner explains that, 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 gold that aligns with the 2008 Mining Code and the 2012 Mining Convention, and was comparable with other royalties in the region.
Further, a renewed partnership approach for Tasiast Sud contemplates the government receiving a 15% free carried interest in Tasiast Sud with an option to purchase an additional 10% participating interest in the project after additional feasibility work is completed.
The parties have also agreed to enhanced exploration programmes at Tasiast Sud and Kinross-held concessions north of the current mining area, to the extent achievable in the current Covid-19 environment. The exploration programme at the large, underexplored and prospective Tasiast Sud property is expected to focus on upgrading existing indicated resource estimates of 193 000 oz and inferred resource estimates of 817 000 oz and to potentially enhance the probable reserve estimate of 144 000 oz.
The government will have the right to nominate two observers to the board of directors of the Kinross subsidiary operating the Tasiast mine and will also have a right to nominate one representative and one observer to the board of the Kinross subsidiary that will operate Tasiast Sud.
“This agreement is a result of positive efforts between the Government of Mauritania and Kinross to amicably resolve our discussions. It also highlights our commitment to providing an attractive investment climate in the country and ensures that the Mauritanian people will receive the appropriate benefits from the Tasiast mine. Tasiast is an important contributor to Mauritania and we believe our new agreement will be a positive model for other foreign mining investors. We are pleased that our longstanding and important partnership with Kinross has been strengthened, and we welcome the continued investment in our country and contributions to its socioeconomic development,” commented Petroleum, Mines and Energy Minister Mohamed Abdel Vetah.