RNS Number : 0658E Vatukoula Gold Mines PLC 14 December 2009
14 December 2009
AIM: VGM
Vatukoula Gold Mines plc
("Vatukoula" or "the Company")
Signing of the Vatukoula Trust Deed
Vatukoula is pleased to announce that it signed the Vatukoula Trust Deed with the Minister for Lands and Mineral Resources of the Republic of Fiji on the 7 December 2009. The Vatukoula Trust Deed supersedes the original '10 August Deed' (summarised in the re-admission document dated 13 March 2008), signed by the previous operators of Vatukoula Gold Mine.
The Trust Deed formalises a number of key concessions and exemptions to the Company's 100% owned subsidiary Vatukoula Gold Mines Ltd in Fiji, as well as establishing the Social Assistance Trust.
The Social Assistance Trust will support those members of the Vatukoula community who were previously employed at the mine at the time of the mine closure in December 2006, but who have not been able to find employment.. This group will be provided assistance at the Trust's' direction, with retraining, relocation, and any other such requirements that they may have.
Vatukoula Gold Mines Ltd will provide a total of Fijian $6.0 million (US$ 3.23 million), payable over 5 years to the fund, with the first amount of Fijian $1.5 million (US$ 0.78 million) payable on the 8th March 2010, and the balance in equal instalments over 4 years on the anniversary of completion. The fund will be administered by a total of eight trustees, four appointed by Vatukoula Gold Mines Ltd, and two each appointed by the government of Fiji and the former employees made redundant and not re-employed.
The concessions granted to Vatukoula Gold Mines Ltd are as follows;
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a concession on the importation of automotive diesel oil and industrial diesel fuel in relation to the operation of the Mine and all vehicles for the operations at the gazetted rate;
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an exemption on the payment of export tax for a period of 5 years;
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an exemption on the payment of fiscal duties for all plant equipment machinery and motor vehicles and other importations in relation to the mine, for a period of 3 years from 14th May 2009;
- an exemption on the payment of Import Excise Duty for a period of 3 years from the 14th May 2009;
- an exemption on the payment of Corporation tax for a total of 5 years, and
- the acceleration of depreciation provisions.
The completion of the Vatukoula Trust Deed is subject to both;
- The Deed having been formally approved by the cabinet and having had the relevant approval of all the ministers as may be required under any provisions of the law. This is due to occur by the 1 January 2010; and
- The Company having paid the first instalment to the Social Assistance Trust Fund by the 8 March 2010.
The Company will provide further updates as to the status of completion of the Vatukoula Trust Deed.
The concessions and exemptions granted are of importance to the economics of the mine as firstly they provide additional cash flow to reinvest in capital projects and, secondly they reduce the Company's fuel costs. These effects, together with the recent strengthening of the gold price and the deflation of diesel prices provide Vatukoula with a unique opportunity to maximise the revenue from its gold resources.
Commenting on the completion of the Vatukoula Trust Deed, David Paxton, Vatukoula's CEO, said:
"It has taken a substantial amount of time and effort to reach this agreement and, indeed, it would not have been achieved without considerable assistance from the Minister of Lands and Mineral Resources and the office of the Attorney General (Fiji). In recognition of their contribution, we would like to extend our gratitude to all the departments involved in the negotiations and finalisation of this agreement.
The finalisation of the Trust Deed provides us with additional backing in maintaining a close working relationship with a key resource at Vatukoula Gold Mines, the Vatukoula Community, and additional support from the authorities in Fiji.
We look forward to working closely with the Fijian authorities to achieve the full potential of the mine for the benefit of all employees and other stakeholders."
Enquiries:
Vatukoula Gold Mines plc
David Paxton + 44 20 70167861
Kiran Morzaria
Religare Hichens, Harrison plc.
Daniel Briggs + 44 20 74440503
Colin Rowbury + 44 20 74440504
W.H. Ireland Limited
David Porter + 44 20 72201666
James Joyce
Bishopsgate Communications
Michael Kinirons +44 20 7562 3350
This information is provided by RNS
The company news service from the London Stock Exchange END MSCLZLFFKLBFFBD
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