EQN 3.39% 28.5¢ equinox resources limited.

Hi all, Craig Williams responded to my email a short time ago...

  1. 297 Posts.
    Hi all, Craig Williams responded to my email a short time ago and his confidence is quite heartening!
    Heres what he had to say:

    "Thanks for your email. I will try to clarify the situation for you.

    Zambia enacted a new tax act on 1 April. This new tax regime increases
    the corporate tax rate from 25% to 30%, the royalty rate from 0.6% ton
    3% and includes a new variable profits tax and windfall profits tax that
    relates to copper prices above $2.50/lb.

    However, Equinox signed in December 2005 a Development Agreement with
    the government that fixes the tax package applicable at that time to
    Lumwana for 10 years. This DA includes among other clauses a windfall
    tax that is not as onerous as the newly introduced tax. The DA is
    enforceable under Zambian and international law and is binding on both
    Equinox and the government. We have had recent independent legal advice
    from counsel in both Zambia and the UK confirming the legality of the
    DA.

    Notwithstanding the above, we have a very good relationship with the
    government and while we have emphasised to them the enforceability of
    the DA, we have also indicated to them a willingness to compromise on
    specific clauses within the DA. Over the coming months we will both
    enforce the DA and work towards this compromise.

    I apologise that this answer to your question is not clear cut, but I am
    confident that we will come to a reasonable resolution of the matter
    with the Zambian government. In recent meetings with various ministers
    in Lusaka, I was assured at every meeting that Lumwana is the most
    important development in the country in a generation and the government
    will not do anything to jeopardise the success of this mine.

    In the meantime we are of course focussing on building Africa's largest
    copper mine to be commissioned in mid-year."

    Regards
    Craig

    Craig R. Williams
    President & CEO
    Equinox Minerals Limited
    50 Kings Park Road, West Perth, WA, 6005, AUSTRALIA
 
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