News: Troy Resources wins tax exemptions for Karouni gold project

Troy Resources (ASX:TRY, TSX:TRY) may trade higher after signing a Mineral Agreement with the Government of Guyana for the Karouni gold project.

The agreement details all fiscal, property, import-export procedures, taxation and other related conditions for the development and operation of Karouni.

It also represents a significant step forward in the development of Karouni and signifies the importance of the project for Guyana.

Terms include a royalty of 5% at a gold price less than US$1,000 per ounce; royalty of 8% at a gold price higher thanUS$1,000 per ounce; a corporate tax rate capped at 30%; the ability to import goods and supplies free of duties and taxes; and an exemption from capital gains taxes.

Troy acquired Karouni from Azimuth Resources last year. There is evidence of large gold systems from artisanal mining production of over 500,000 ounces per annum.

A three year open cut mine producing 101,000 ounces per annum is envisaged, from existing resources at the Smarts deposit of 1.77 million tonnes at 4.7g/t and the Hicks deposit of 840,000 tonnes 2.02g/t gold.

Trow has a $100 million debt facility with Investec Bank with $70 million immediately available and $30 million subject to development milestones.

Site preparation work is ongoing, all mobile equipment is now on site or in country and the project remains on track for first production before the end of Q2 2015.

Troy is valued at $130 million.