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INV Metals and Ecuadorian Government Agree to Exploitation Contract Terms
May. 30, 2017 09:26AM PST
Gold Investing
INV Metals Inc. (TSX:INV) announced that it has reached an agreement on the terms and form of a mining exploitation contract for its Loma Larga gold project with Ecuador’s Ministry of Mining.
INV Metals Inc. (TSX:INV) announced that it has reached an agreement on the terms and form of a mining exploitation contract for its Loma Larga gold project with Ecuador’s Ministry of Mining. The company expects the contract to be executed after it completes a feasibility study and other key milestones for the project.
The key terms of the mining exploitation contract are as follows:
- INV Minerales Ecuador S.A. INVMINEC (“INV Minerales”), the Company’s wholly owned Ecuadorian subsidiary, has the right to develop and operate Loma Larga for a period of 25 years, subject to renewal.
- INV Minerales will pay a royalty of 5% on the net income (“Royalty” or “Royalties”) of precious metals and related by-product sales.
- INV Minerales will pay US$15 million of the Royalty in advance (“Advanced Royalty”) to primarily support community development and social programs.
- Payments of the Advanced Royalty will be subject to the following schedule and milestones:
- US$5 million on the execution of the Exploitation Contract;
- US$5 million on the first anniversary of the execution of the Exploitation Contract; and
- US$5 million on the second anniversary of the execution of the Exploitation Contract.
- The Advanced Royalty is deductible against future Royalties payable in the amount that is the lesser of 50% of the Royalties payable in a six month period or 20% of the total Advanced Royalty calculated annually.
Candace MacGibbon, CEO of INV Metals, commented:
We are extremely pleased to announce the Company and the Government of Ecuador have agreed on the form and terms of the Exploitation Contract for the Company’s flagship Loma Larga gold project. When executed, the Exploitation Contract will govern certain fiscal and other matters relating to the development and operation of Loma Larga. The Company may now move forward incorporating the fiscal terms of the Exploitation Contract into the FS.
Click here to read the full INV Metals Inc. (TSX:INV) press release.