Latest update January 15th, 2025 1:49 AM
AGM secret contract…Govt., Aurora tied to secrecy for 2 years after operations end
An aerial view of the Aurora Gold Mines operation.
Kaieteur News – The contract that was signed in 2011 between Canadian company Guyana Goldfields Limited and the Guyana government provides that all information and data to be had, in pursuit of the project, would be jointly owned by the parties and would be kept confidential.
This provision not only obtains during the life of the agreement and mines operations, but would hold effect for up to two years after the end of its time in Guyana under the agreement inked.
Should any of the parties wish to share the information with a third party, it would also need the written consent of the other party to the contract before making any disclosures.
The only exception provided is for financial institutions for loans—itself transactions that are also held confidential by commercial banks.
The Guyana Gold Goldfields’ Aurora Gold Mines operation was sold by the Canadians last year to a Chinese company – Zijin Mining Group – which acquired the largest gold mine operation in Guyana for some US$238M along with all of the protections therein.
Under the contract, since leaked to this publication, the company also enjoys paying a partial 10 percent excise duty for the import of petroleum products while local miners plying the trade and subjected to the standard rate of 50 percent.
Guyanese are subjected to a standard excise rate of 50 percent—a rate that was last revised downwards to 35 percent on February 18 in order to cushion against the higher fuel prices on the world market to be reverted again when prices rebound. As such, petroleum products imported by Guyanese attract a rate three and a half times higher than their foreign counterparts. Under the provisions of that contract, the company is provided with the reprieve where it shall “pay a partial Excise tax of 10% on fuel (diesel, gasoline, lubricants and other oils) from the date of the commencement of production by the company.”
Additional provisions provided as incentives for the foreign based company includes waivers on imports for other machinery, equipment and other personal items. This, in addition to there being a sliding scale for the payments to be made—five percent royalty when gold is sold for US$1,000 and below or eight percent, when sold at one cent above that price.
This publication reported this past week that according to the contract, the percentage of applicable royalty charged for gold produced would be applied to the sale price actually realises from a smelter, refinery or other arms-length third party purchaser. Notably, Guyanese miners are required to sell their gold at the Guyana Gold Board where that entity determines the price to be paid and applicable royalty.
That contract also illustrates that when it comes to imports, the company also enjoys a wide range of waivers – under the provisions in the contract, is entitled to import into the country or purchase domestically, free of import duties, Value Added Tax and any other direct or indirect taxes on all equipment, supplies and materials for the project.
It is also provided under the contract that, “for greater certainty,” the company or any local or foreign contractor retained for the project purposes shall not be required to pay any licence fees, duties or other charges related to importing or purchasing materials in Guyana for the purpose of the project.
Additionally, the company shall also be entitled to import free of customs duties, VAT and other direct or indirect taxes on necessary personal items, including electronic and household effects.
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