Liberia’s first commercial
gold mine “’ the New
Liberty project “’ is on
course for production
this year
 
Monrovia, Liberia — 26 September 2013 – Aureus Mining is on course to become Liberia’s first gold producer, after having its restated and amended mineral development agreement (MDA) ratified by the government of the west African state.

The changes appear to aid the junior, allowing it to take advantage of the more favourable tax treatments in Liberia’s Consolidated Tax Amendment Act of 2011, reports allAfrica.com.

In the words of chief executive David Reading, the MDA “provides a further strengthened platform for Aureus”.

The nuts and bolts of the deal governing the AIM and TSX-listed group’s ownership of the 457sq k New Liberty project are as follows: the income rate falls five points to 25%; the royalty rate is unchanged at 3%; the government’s free carried interest of 10% is also unchanged; and additionally, there are no taxes on import, though the group will pay customs fees of US$300,000 annually.

The remaining term of the licence is 13 years with the right to extend for another 25 years.

Reading said: “This agreement provides our shareholders with surety and stability in the development of the New Liberty project, and the improved fiscal terms are excellent news for the company at a time of gold price volatility.

“I would like to sincerely thank the government of Liberia for their commitment to the development of the country’s first commercial gold mine and for their support in the completion of this enabling legislation.”

The City broker RFC Ambrian described the changes to the terms of the MDA as "good news" and pointed out the lower tax rate will improve the profitability of the New Liberty Project. As a result it has increased its valuation by 2p to 57p a share, which compares with a current price of 38p.

“As stated previously, we view Liberia as an exciting exploration prospect in west Africa,” RFC Ambrian said in a note to clients.

“The country is clearly ‘open for business and development’. Liberia has a stable government that is supportive of gold mining; the country has a history as an iron ore producer and exporter and thus has a favourable infrastructure for mining and a mining culture.

Source: allAfrica.com. For more information, click here.