Boroo agreement holds firm for Centerra

first_imgAfter lengthy negotiations, Centerra Gold and the Government of Mongolia have entered into an amended Boroo Stability Agreement, which reaffirms the company’s rights to exploit the Boroo gold deposit under a stable tax and operational regime in Mongolia.Centerra and the Government agreed that effective from the first of this year, the Boroo project would be subject to the generally applicable 25% corporate income tax rate, which will apply until the termination of the Boroo Stability Agreement in July 2013. Under the previous agreement, Centerra was subject to income tax at the rate of 20% for the three-year period starting March 1, 2007 and 40% thereafter. In addition, effective as of August 3, 2007, the mineral royalty payable will be 5% rather than the 2.5% previously applicable. The company also received a separate letter from the Minister of Finance confirming the Government’s willingness to conclude an investment agreement regarding the Gatsuurt project and to advance the approval and registration of reserves with the applicable Mongolian authorities. The Ministry of Finance acknowledges that the Centerra submitted documentation related to the registration of reserves in 2005. The company anticipates such registration may be completed this fall.Centerra President and CEO Len Homeniuk: “We are very pleased that we have come to a mutually acceptable amended Boroo Stability Agreement. We expect that this development will pave the way to an expedient final resolution on the Gatsuurt investment agreement. An agreement on Gatsuurt will solidify our current position in Mongolia, provide for a stable operational environment, and allow us to review our exploration and growth strategy there.”last_img

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