RE:RE:RE:Civil Strike Officially OverThe tax reduction was before the agreement. From the MDA
"Under the December 2016 tax reform, the corporate tax rate (including surcharge) in Colombia is 40% in 2017, 37% in 2018 and 33% thereafter."
Since income tax is the largest cash usage, a permanent 7% drop in tax is a good addition to free cash.
In addition, they don't have to pay wealth tax anymore after 2017
" The Company recorded wealth tax expense of $0.9 million in the first half of 2017, down from $2.2 million in the first half of 2016 as the maximum wealth tax rate decreased from 1.00% of gross equity in Colombia (minus allowable debts) held through branches or permanent establishments located in Colombia in 2016 to 0.40% in 2017. Under the December 2016 Colombian tax reform, the wealth tax expires after 2017.."
And it looks like they don't have to pay equity tax anymore.
>> Seems that the costs a rising for GCM (Segovia's total cash costs were $620 per ounce in the second quarter of 2017) <<
2017 AISC is higher because they are spending more on capex to upgrade the mine. The installation of a water treatment plant reduces environmental discharge cost for future years and the increase in plant capacity would both reduce AISC once they are completed. The presentation says "
up to 1,500 tpd". They haven't upgraded to 1500 tpd yet.
The $700 fee to small miners who earn less than 80 ounces per month shouldn't have a large impact because of the relatively small number of oz produced. It is the larger miners that matter and it isn't clear what the final cost will be. Between 10% and 60% is a large variation. In one of the articles, it says the larger miners have their own processing plant that doesn't use mercury. Does GCM get a percentage from the oz produced from those plants (in which case production increases without GCM needing to increase their plant capacity) or do they only get ore shipped to them? Up until now GCM hasn't been paying the sustaining cost, exploration costs, G&A and other costs of the illegal miners. If some plant equipment at the former illegal mine breaks down, does GCM or the artisan miners pay for it? If GCM pays for it, then GCM should get a percent from the oz produced by the illegal processing plant. One of the articles said the government agreed to improve safety of the mines. Does that mean the government is helping to pay that cost or any other cost?
baystock1 wrote: corporate tax rate drops for next 2 years
ts9222, are you saying the agreement to end the strike included a tax reduction ? If so by how much ?