Monday, May 29

Minera Panama accepts government proposal to increase royalty payments

Minera Panama announced that it accepts the proposal of the National Government to increase the payment of royalties cWith the purpose of safeguarding the continuity of the operation during the term of the contract, with which the company meets the deadline established by the High-Level Negotiating Commission to respond no later than this Monday, January 17.

The subsidiary of Canadian First Quantium Minerals LT stated that it understands the general terms proposed by the National Government of Panama, while considers reasonable a minimum annual contribution of $375 million from the Cobre Panamá mine.

In a statement, the company stated “We accept the proposal of the National Government, while requesting that the necessary protections be provided in order to safeguard the continuity of the operation during the life of the project.

In addition, he said he felt optimistic “that the achievement of a compromise can be announced that it be mutually consistent with what is stated in the proposal received from the Panamanian government on January 13”

LThe company sent its response to the government through a note sent to the Minister of Commerce and Industry, Ramón Martínez, head of the government’s negotiating team, which bears the signature of Manuel Aizprúa, representing Minera Panamá.

For your part the Ministry of Commerce and Industries (Mici) through a statement confirmed that “we have received a formal notification from the Panama Mining company presented by the High-Level Negotiating Commission appointed by the President of the Republic, Laurentino Cortizo.”

The Mici pointed out that in particular President Cortizo will be addressing the nation this Tuesday, January 18

The Government had given Minera Panama until this Monday, January 17, to respond to this proposal, in which a mobile royalty system is established on the gross profits of Minera Panama that would fluctuate between 12% and 16%. This amount is significantly higher than the 2% that the company currently pays.

In addition, the government proposal establishes that Minera Panama pays the Panamanian State an Income Tax (ISR) of 25%. Another significant increase since currently the company does not pay this tax.

Commerce Minister Ramón Martínez had indicated that these changes would imply an increase in State revenues to approximately $400 million annually, having an annual contribution floor of $375 million, always depending on the price of copper in international markets.

Martinez had explained that both the royalties and the ISR proposed by the Republic of Panama to the company Minera Panamá they adjust to what other countries such as Chile and Peru charge to the mining industry and warned that our country cannot aspire to less.