Article 77: Industrial exploitation of a deposit which exceeds the limits of small mines is authorized by virtue of an operating permit granted by decree taken by the Council of Ministers.
Article 78: The large mine exploitation permit can only be granted to the holder of a research permit. It can only cover an area within the perimeter of the research permit and the substance for which this title was awarded.
It is legal if the holder fulfills the obligations mentioned in the act establishing the research permit and if it provides proof of an exploitable deposit.
The granting of the exploitation permit automatically cancels the research permit and the Convention therein.
The granting of the exploitation permit automatically cancels the research permit and the Convention therein. After transfer of the operating permit to the newly operating company created for this purpose, the holder of the operating permit obtains from the State, at his request, a new research permit on the remaining area not covered by the operating permit. This request is addressed to the minister in charge of mines within three (03) months. Otherwise, the remaining perimeter not covered by the operating permit is free of all rights.
As soon as the large mine operating permit is granted, the holder begins the procedures in for the creation of a company under Malian law. The granting by the State of the exploitation permit entitles him to a free participation fixed at ten percent (10%) minimum of the capital of the operating company.
This company is created within one hundred and twenty (120) days following the publication of the decree for granting the operating permit. Otherwise, he has the obligation to submit a new feasibility study.
The operating company can only hold the single operating permit for which it has been created.
The State's participation cannot be subject to dilution even in the case of an increase in the capital; and related actions are considered priority actions. The holder of the research permit is required to transfer the operating permit free of charge to the company operating from its creation.
The establishment agreement for the exploitation phase is signed with the company newly created operating company.
Article 79: When, for a year of activity, a net countable profit is recorded by the General Meeting of the operating company, the latter votes the payment of a dividend priority to the State, equal to ten percent (10%) of said profit reduced only by amounts allocated to legal reserves in accordance with applicable law under its free participation provided for in the previous paragraph. However, the State reserves the right to collect all or part of the dividends in kind. In this case, the terms of collection of these dividends are fixed by a decree taken into Council of Ministers.
Article 80: The State has the option to increase its participation in the operating company by the purchase in cash of an additional participation up to twenty percent (20%) called “cash participation”. This option can be exercised through the company of operation of the State or any other public establishment designated by the State within a period of twelve (12) months following the date of issue of the operating permit. This cash participation cannot be foreclosed.
The method of calculating the State's cash participation is set as follows:
The acquisition price of the cash participation is equal to the percentage chosen by the State multiplied by the overall cost of the research work and the Feasibility Study relating to the Deposit, supported by the Research Company before its decision to exploit the said Deposit, plus interest at the BCEAO rate plus two percent (2%) over the duration of the investments. The expenses already borne by the State for research work within the Perimeter also increased by interest at the same rate, deducted from this acquisition price for the cash participation acquired by the State. Expenses tax, or exemptions granted by the State to the holder of the research permit and its subcontractors on the perimeter subject to this operation will also be deducted amounts paid to the operating company for the cash participation of the State).
Under the new code, it looks like the State doesn't even have to pay the market value for the increased 10% share????
LLL Price at posting:
$1.14 Sentiment: Hold Disclosure: Held
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