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After a tax payment destined for the Department of Mineral Production failed to arrive in Brazil for “unknown reasons,” Pacific Potash could lose its Amazonas property.
Pacific Potash (TSXV:PP) is facing the shutdown of its Amazonas potash project after money set aside for taxes failed to make its way to Brazil.
The Vancouver-based company put out a brief press release on Monday announcing that funds wired to Brazil in order to make a tax payment to the National Department of Mineral Production were not received “for an unknown reason.” As a result, the company’s tenements in Brazil may end up being revoked by the department.
Calls to the company seeking comment were not immediately returned.
A statement posted to the website of Brazil’s mining agency rehashes much of the same, but adds that the funds in question were for the payment of the annual fee per hectare.
The company’s share price was pummeled on the back of the news, falling 25 percent on Tuesday, bringing its year-to-date fall to nearly 77 percent.
Pacific Potash has seen some upheaval over the course of the past year with a new management team being installed. Most recently, the company announced that Balbir Johal, who acted as CEO, director and executive co-chairman, as well as Bryce Clark, a director and chief financial officer, have both resigned. However, it has looked to balance that with drill results from Amazonas.
If Pacific Potash were to lose its project, it wouldn’t be the first time a company has lost a property to the Brazilian government. Two years ago, Vale (NYSE:VALE) lost its Bomfim property after it was late filing yearly reports to the Brazilian mining agency. DuSolo Fertilizers (TSXV:DSF) was able to snap up the property and formed a partnership with Quantum Mineração.
Securities Disclosure: I, Nick Wells, hold no direct investment in any of the companies mentioned in this article.