Lundin Gold Inc T.LUG

Royalties at Fruta del Norte

[petersburggray]

Perusing 43-101 gold and silver production has a 6% NSR attached, which is very high imo, of which 5% go to gubmint. There is also a windfall tax should gold and silver prices exceed certain levels but no detail in 43-101 explaining how high gold and silver prices must be to incur ecuador gubmint windfall taxation and how high these windfall taxes potentially are? Also 50% of benfit(read profits) generated from Fruta del Norte go to gubmint of Ecuador once cost of building mine are paid off after 4.5 years of gold production. Paying ecuador gubmint 50% of profits necessarily will drive up AISC by half of profit margin or about $500 per oz, assuming $1850 gold price, starting once mine paid off. It doesnt appear to me that this increase in cost is included in table 1-7 of 43-101 that show mine operating statistics. I guess it was Kinross that negotiated this crappy deal for LUG shareholders which is worse than deals for building mines in west africa. Biggest beneficiaries of fruta del norte are bankers doing mine finance, that get paid first, land handsomely, and ecuador gubmit that get 50% of profits and have no risk in running mine. Shareholders only get half an apple and bear all risk.

[petersburggray]

IMF amd World bank also profit more from Fruta del Norte than LUG shareholders. With ecuador gubmint getting 5% NSR off top and an additional 50% of mine profits once mine finance paid off plus a windfall profit tax on high gold and silver prices resulting from western central bank money printing imf and world bank guaranteed to get paid on their billions of loans to ecuador.

[petersburggray]

I think ecuador Fruta del Norte deal potentially set the standard for broke countries like peru and chile and argentina whose gubmints potentially considering rewriting mining laws so as to increse gubmint revenue on bavk of mining firms. If peru chile argentina got 5% NSR, 50% of profits, and windfall profit tax on high metal prices then these countries would have greater hard currentcy tax

[Pete1986]

You are wrong.  The windfall tax was eliminated by the government of Ecuador. And also the 50% profit share is not in place anymore.  So what taxation do we have in Ecuador: - 5% production taxes (royality) + 1% third party royality - 3% profit sharing (employees, part of the cash costs) - 12% profit sharing (governmen, based on EBIT) - 22% income tax (based on EBIT, 12% profit sharing

[petersburggray]

Thanks for reply Pete. When did Ecuador give up the windfall tax on high gold and silver prices and their 50% share of benfits from mine as outlined in the 43-101? Thanks in advance for your response.

[Pete1986]

Hey Peter, the windfall tax was eliminated by 2019 to attract more (foreign) investements in the mining sector.  However, in terms of the benefit sharing I have to correct myselfe. This is still in place, however, it will take lots of time before sovereign adjustment payments will kick in. The benefit calculation of the government considers and includes all tax payments, royalties, profit

[petersburggray]

Thanks again for your reply Pete which help me a lot. Ecuador gubmint windfall taxes on high gold and silver prices eliminated in 2019...hmmm...i will research that, i am doubting Thomas, got to put my finger in wounds to believe. If you have a link or could point me in right direction, be much appreciated. Ecuador getting 50% of "benefit" from Fruta del Norte be here quickly. 43-101

[RatPatrol]

I believe you and Pete 1986 are scratching on the facts, petersburggray.  And to be sure you are drawing some competent, correct conclusions I'm not sure whether Lundin or Kinross negotiated that onerous tax agreement..... NO MATTER. EVERYBODY now has to work with it. Musing for a moment, such a tax/royalty regime seems to work when the gubmint's share goes DIRECTLY into

[petersburggray]

Rat Patrol imo Lundin involvement big red flag. If mine so great why did Lundins set up seperateoperating company for it insteaf of putting Fruta del Norte in Lundin mining stable? Lundins apatently luke gold mines didnt they recently buy a gold mine from yamana?Swedish red flag and living in Geneva bigger red flag, geneva the belly of the beast literally. The ultra wealthy swedish are globalist

[Pete1986]

Peter, I understand that you wanna get cheaper shares. I would like to buy more cheap shares as well. However, you statements are missleaing. Here you got an link regaring the elemination: https://www.mining-journal.com/politics/news/1356116/ecuador-eases-tax-burden-on-miners And regarding the profit sharing. First of all, the NSR is part of the benefits of the governemnt. So its not 50%+5%. And

[RatPatrol]

The proof of the pudding will be in the tasting, pete 1986. You are CORRECT that there have been a lot of EXPLORATION DOLLARS spent in Ecuador. However, besides LUG, we only see one other MINE developed - a Chinese STATE - RUN operation that Ecuadoreans are not thrilled about, or so I read. Llurimagua and Cascabel - both worldscale deposits - are moving into feasability stage and could be self

[Pete1986]

I guess the profit sharing won't be a topic, since their won't be almost no profits :) It's gonna be interesting what's the share price if Gold reaches 1200 USD again.