VANCOUVER, May 8, 2013 /CNW/ - GOLDCORP INC. (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.
Based on the proposed amendments, it is
anticipated there will be an approximate 50/50 split of the
expected cash flows from the mine between PVDC and the Government
over the years 2013-2016. This would result in tax revenues to the
Government of approximately $2.2
billion over this period at a gold price of $1,600 per ounce.
The economic benefit of these changes over the
life of the mine to the Government of the Dominican Republic is approximately
$1.5 billion (net present value at 5%
discount rate and $1,600 gold price
assumption).
The proposed agreement includes the following
broad parameters consistent with the SLA:
- Corporate income tax rate of 25 percent
- Net smelter royalty (NSR) of 3.2 percent
- Net profits tax (NPI) of 28.75 percent
The proposed amendments are subject to
negotiation of a Definitive Agreement, which will require the
approval of the Boards of Directors of Goldcorp and Barrick along
with the project lenders. The Definitive Agreement will also
be subject to approval by the Congress of the Dominican Republic. The SLA will
continue in full force and effect according to its present terms
unless and until the Definitive Agreement is fully executed and
approved.
The Government of the Dominican Republic has also reiterated its
commitment to facilitating the timely granting of permits and other
requirements necessary for ongoing operations at Pueblo Viejo.
Pueblo Viejo is a world-class, low-cost mine and
is expected to contribute an average of between 415,000 to 450,000
ounces of gold per year to Goldcorp's account in its first full
five years of production. For 2013, gold production is expected to
be between 330,000 to 435,000 ounces to Goldcorp's account.
Goldcorp is one of the world's fastest growing
senior gold producers. Its low-cost gold production is
located in safe jurisdictions in the Americas and remains 100%
unhedged.
Cautionary Note Regarding Forward Looking Statements
This press release contains "forward-looking
statements", within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation, concerning the business, operations and
financial performance and condition of Goldcorp Inc. ("Goldcorp").
Forward-looking statements include, but are not limited to,
statements with respect to the future price of gold, silver,
copper, lead and zinc, the estimation of mineral reserves and
resources, the realization of mineral reserve estimates, the timing
and amount of estimated future production, costs of production,
capital expenditures, costs and timing of the development of new
deposits, success of exploration activities, permitting time lines,
hedging practices, currency exchange rate fluctuations,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation
expenses, timing and possible outcome of pending litigation, title
disputes or claims and limitations on insurance coverage.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects",
"is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", "believes" or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved" or the negative connotation thereof.
Forward-looking statements are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performances or achievements of
Goldcorp to be materially different from future results,
performances or achievements expressed or implied by such
statements. Such statements and information are based on
numerous assumptions regarding present and future business
strategies and the environment in which Goldcorp will operate in
the future, including the price of gold, anticipated costs and
ability to achieve goals. Certain important factors that could
cause actual results, performances or achievements to differ
materially from those in the forward-looking statements include,
among others, gold price volatility, discrepancies between actual
and estimated production, mineral reserves and resources and
metallurgical recoveries, mining operational and development risks,
litigation risks, regulatory restrictions (including environmental
regulatory restrictions and liability), activities by governmental
authorities (including changes in taxation), currency fluctuations,
the speculative nature of gold exploration, the global economic
climate, dilution, share price volatility, competition, loss of key
employees, additional funding requirements and defective title to
mineral claims or property. Although Goldcorp has attempted
to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended.
Forward-looking statements are subject to known
and unknown risks, uncertainties and other important factors that
may cause the actual results, level of activity, performance or
achievements of Goldcorp to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to: risks related to the integration of
acquisitions; risks related to international operations, including
economic and political instability in foreign jurisdictions in
which Goldcorp operates; risks related to current global financial
conditions; risks related to joint venture operations; actual
results of current exploration activities; environmental risks;
future prices of gold, silver, copper, lead and zinc; possible
variations in ore reserves, grade or recovery rates; mine
development and operating risks; accidents, labour disputes and
other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities; risks related to
indebtedness and the service of such indebtedness, as well as those
factors discussed in the section entitled "Description of the
Business - Risk Factors" in Goldcorp's annual information form for
the year ended December 31, 2012
available at www.sedar.com. Although Goldcorp has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements.
Forward-looking statements are made as of the date hereof and
accordingly are subject to change after such date. Except as
otherwise indicated by Goldcorp, these statements do not reflect
the potential impact of any non-recurring or other special items or
of any dispositions, monetizations, mergers, acquisitions, other
business combinations or other transactions that may be announced
or that may occur after the date hereof. Forward-looking
statements are provided for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to get a better understanding of our operating
environment. Goldcorp does not undertake to update any
forward-looking statements that are included in this document,
except in accordance with applicable securities laws.
SOURCE Goldcorp Inc.