Canadian company Dundee Precious Metals (DPM) has signed an investment protection agreement (IPA) with the Ecuadorian Government pertaining to the Loma Larga copper-gold project.
Under the IPA, DPM has been granted tax stability and certain tax incentives from the Ecuadorian Government.
The government also granted legal protections, including regulatory framework stability and dispute resolution through international arbitration to the company.
The government’s key incentives and protections for DPM include a 5% discount on the income tax rate, fixed at 20%; import duties exemption for key machinery for plant and mine facilities; and tax stability on VAT.
It also includes protections pertaining to the prohibition of all forms of confiscation, non-discriminatory treatment and equal playing field, legal and tax stability, as well as New York-based international arbitration, in case of potential disputes in relation to the project.
DPM president and CEO David Rae said: “This agreement provides further legal protections and tax stability for DPM and our investors.
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“We will continue to take a disciplined approach to future investment and advancement of the project based on the receipt of other key milestones and the overall operating environment in the country.”
As per the IPA terms, DPM is required to invest more than $400m during the project’s construction and production phases.
In a press statement, DPM said: “In line with the company’s approach to disciplined project development, DPM intends to meet certain additional milestones for Loma Larga, including the resolution of the constitutional court case and receipt of the environmental licence, prior to committing significant capital to the project.”
The Loma Larga high-quality copper-gold underground project has the potential to produce an average of approximately 200,000oz of gold annually in the first five years of its operation.
