Kinross believes the agreement positions the Tasiast operation (above) for long-term success.
(Photo: Kinross Gold)

Kinross President and CEO J. Paul Rollinson said, “This balanced agreement will deliver increased stability, position Tasiast for long-term success, and provide enhanced benefits to Mauritania and its people.” The 30-year exploitation license for Tasiast Sud under the 2008 Mining Code and the 2012 Mining Convention will be granted with expedited permitting and the possibility of early mining. The tax exemption on fuel duties will be reinstated and the government will repay the $40 million outstanding VAT refunds with an agreed payment schedule through 2025.

The $10 million payment is related to fuel use and tax exemptions and the $15 million payment was to resolve disputed matters arising out of Kinross’ prior application to convert the Tasiast Sud exploration license into an exploitation license. At Tasiast, Kinross also volunteered to update its existing fixed 3% royalty payable under the 2006 Tasiast Mining Convention. Although it is still in effect, mining laws have evolved, so Kinross decided to pay an escalating royalty tied to the price of gold that aligns with the 2008 Mining Code and the 2012 Mining Convention. Kinross said this is comparable with other royalties in the region.

The government will receive a 15% free carried interest in Tasiast Sud with an option to purchase an additional 10% participating interest after additional feasibility work is completed, according to the company. Mauritanian Minister of Petroleum, Mines and Energy Mohamed Abdel Vetah said, “This agreement is a result of positive efforts between the government of Mauritania and Kinross to amicably resolve our discussions. It also highlights our commitment to providing an attractive investment climate in the country and ensures that the Mauritanian people will receive the appropriate benefits from the Tasiast mine.”

The parties have also agreed to enhanced exploration programs at Tasiast. It will focus on upgrading existing indicated resource estimates. The government can nominate two observers to the board of directors of the Kinross subsidiary operating the Tasiast mine and will also have a right to nominate one representative and one observer to the Board of the Kinross subsidiary that will operate Tasiast Sud.