Barrick Gold Corporation
) announced that Pueblo Viejo Dominicana Corporation (PVDC) has
reached an agreement in principle with the Government of the
Dominican Republic regarding amendments to the Pueblo Viejo
Special Lease Agreement. The Pueblo Viejo mine is operated by
PVDC. Barrick owns about 60% of PVDC with
) holding the balance.
The agreement in principle was reached after successful
discussions between the local government and PVDC for about eight
months. It preserves the economic value of the Pueblo Viejo mine.
The agreement in principle will also address the fiscal
objectives of the Dominican Republic.
If the proposed amendments are implemented, revenues to the
government will increase through a number of proposed changes to
the lease agreement.
Based on the proposed amendments, it is expected that that the
estimated cash flows from the mine will be split equally between
PVDC and the government from 2013 to 2016. Thus, tax revenues to
the government will be about $2.2 billion over this period at a
gold price of $1,600 per ounce.
The proposed amendments are subject to the negotiation of a
Definitive Agreement, which will require the approval of the
Boards of Barrick and Goldcorp along with the project lenders.
The amendments will also require the approval of the Congress of
the Dominican Republic.
The local government has also reaffirmed its commitment to
facilitating the timely granting of permits and other
requirements necessary for the ongoing operations at Pueblo
Barrick, which is among the prominent players in the
gold-mining industry along with Goldcorp.,
Kinross Gold Corporation
Newmont Mining Corporation
) currently retains a Zacks Rank #5 (Strong Sell).
BARRICK GOLD CP (ABX): Free Stock Analysis
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KINROSS GOLD (KGC): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
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