Primero Mining Corp. (P.TO) announced today that the Company's
Mexican subsidiary has received a positive ruling from the Mexican
tax authorities on its Advance Pricing Agreement (
) filing made in October 2011.
The ruling confirms that the Company's Mexican subsidiary
appropriately records revenue and taxes from sales under the silver
purchase agreement at realized prices rather than spot prices
effective from August 6, 2010.
Under Mexican tax law, an APA ruling is generally applicable for
up to a five year period. For Primero this applies to the fiscal
years 2010 to 2014. Assuming the Company continues to sell its
silver from its San Dimas mine on the same terms and there are no
changes in the application of Mexican tax laws relative to the APA
ruling, the Company expects to pay taxes on realized prices for the
life of the San Dimas mine.
According to the silver purchase agreement between the Company
and Silver Wheaton Corp., , until August 6, 2014 Primero will
deliver to Silver Wheaton aN annual amount equal to the first 3.5
million ounces of silver produced at San Dimas and 50% of any
excess at US$4.08 per ounce (increasing by 1% per year).Thereafter
Primero will deliver to Silver Wheaton an annual amount equal to
the first 6.0 million ounces of silver produced at San Dimas and
50% of any excess at US$4.20 per ounce (increasing by 1% per
year).The Company will receive silver spot prices only after the
annual threshold amount has been delivered.
Primero is now trading at $6.92, well above a previous yr high
of $5.59. Day range is between $6.90 and $7.72.