Barrick strikes deal with Dominican Republic on Peublo Viejo

Mining News  |  2013-05-09 13:42:21   |   By

Barrick Gold Corp says it has reached an agreement with the local government of Dominican Republic to implement necessary alterations to the disputed contract over Peublo Viejo gold mines

SANTO DOMINGO (Scrap Monster) : Barrick Gold Corp says it has reached an agreement with the local government of Dominican Republic to implement necessary alterations to the disputed contract over Peublo Viejo gold mines.

As per the agreement, the Dominican Republic would receive nearly $2.2 billion in tax revenues. I addition, it would receive an additional $1.5 billion over the life of the mine. Barrick announced that several key changes are being made to the lease agreement and the new agreement would fetch more revenues to the government.

Earlier, there were reports of wrangles by the Dominican administration on the contract terms of Peublo Viejo. The Government is reported to be seeking bigger share of profits by renegotiating the contract terms. The Dominican President Danilo Medina had earlier asked the company to review its contract terms to make it ‘more favorable’. He had warned the Toronto based mining major of levying huge windfall tax on profits if not the contract gets modified. There were incidents of customs officials detaining Peublo shipments of the Canada based miner.

Pueblo Viejo is located in the Dominican Republic, approximately 100 kilometers northwest of the capital city of Santo Domingo. Barrick holds a 60% interest and is the operator, with Goldcorp owning the remaining interest.

The mine achieved commercial production in January 2013 and is expected to ramp up to full capacity in the second half of the year.

As at December 31, 2012, Pueblo Viejo had proven and probable gold reserves of 15.0 million ounces (Barrick’s share) and a mine life of 25+ years.