the aussie pioneers of west africa gold, page-11

gooch

I like some of the west African goldies, but we need to recognise the higher political risk and that the tax regime there may not be as accommodating as we think.

Ghana's new taxes are far to high - went from 25% to 35%. Plus they get free carried for 10% of the project and have the right to acquire another 10% on "fair terms" (whatever that may mean). They also changed the depreciation provisions to make them less attractive and they were talking about introducing a super profits tax (still on the table?).

Burkina Faso seems the best country with its much lower tax rate (17.5%) and great tenements. Senegal is probably the safest, but they do not have a lot of prospective area for gold exploration.

Once the gold industry gets more developed in other west African countries no doubt they will raise their taxes.

South Africa is an avoid in my view.

And then there are lots of issues with land compensation and moving villagers (eg ADU and NMG, if it wants to access the main pit).

The main problem with our goldies is the high cost, which may be contained in a few years time once the mining boom has peaked, but the world financial issues may still be around to make it worthwhile to play in the goldie space.

It looks like gold is selling off as are the junior goldies, including AMX. The Draghi proposal is not all that stimulative (because it would not expand the CB's balance sheet). Perhaps there will be more measures once the German constitutional court rules on what Germany can do.

loki