OceanaGold completes 1st shipment from Didipio

MANILA, Philippines - Australian miner OceanaGold Corp. has completed its first concentrate shipment from its Didipio copper-gold mine in Nueva Vizcaya.

In a statement, the company said 5,000 dry metric tons (DMT) of concentrate is now on its way to Hibi, Japan.

The first cash receipt for the concentrate shipment is due mid- April.

“Commissioning activities continue to progress well at the Didipio mine. To date, we have produced over 15,000 dry tons of copper-gold concentrate and the first shipment of the Didipio concentrate is another significant milestone for the operations team,” said OceanaGold managing director and CEO Mick Wilkes.

He said the ramp up of the mine’s processing plant is continuing and recoveries of copper ore are “approaching steady state expectations.”

“Gold recoveries are also increasing and will be further boosted as the gold head grade increases. As we further optimize the transportation logistics combined with regular outbound shipments to smelters, we expect to be in a position to announce commercial operations during this quarter,” Wilkes added.

Late in February, the company temporarily suspended the transportation of concentrate from its Didipio mine as it clarified tax exemptions rules in accordance with its Financial or Technical Assistance Agreement (FTAA) with the government.

The Didipio mine is the first mine in the Philippines to operate under an FTAA, a mining agreement that allows 100-percent foreign ownership and entails a 50-50 percent revenue sharing with the government.

Under the FTAA, contractors are allowed to recover their pre-operating expenses, which shall be for a period of five years or until the date of actual recovery.

From the approval of the Declaration of Mining Project Feasibility up to the end of the recovery period, an FTAA contractor is exempt from corporate income tax, customs duties and fees on imported capital equipment, value-added tax on imported goods and services, withholding tax on interest payments on foreign loans and on dividends to foreign stockholders, and other national taxes, except excise tax on minerals.

After the recovery period, the contractor is required to pay all applicable taxes, fees, royalties and other related payments to the national and local governments.

The Bureau of Internal Revenue (BIR), however, issued in February a memorandum circular stating that FTAA holders must pay taxes to the government even within the recovery period.

The circular states that FTAA holders must pay the income tax after the income tax holiday granted to them has lapsed.

OceanaGold paid the taxes demanded by the government to be able to resume ore transport mid-March.