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LONDON (Alliance News) - Ariana Resources PLC Wednesday said it has received a set of investment incentives from the Turkish government for the Kiziltepe gold-silver mine, as part of its Red Rabbit joint venture in western Turkey with Proccea Construction Co.
The gold exploration and development company said the incentives secured include a 100% exemption from customs duty, a VAT exemption over machinery and equipment, and an 80% reduction in corporation tax up to a limit of 40% of the capital investment.
The company also said it has secured interest repayment support on any Turkish lira or foreign currency loan, along with the government agreeing to pay social insurance contributions for all mine employees for seven years.
Ariana said that it has commissioned an independent analysis of the incentives but noted that over the life of its mine, it expects to make an estimated saving of approximately USD1.2 million in corporation tax and USD1 million in social insurance support due to the incentives.
"These are some of the most attractive investment incentives granted to a development company that I have seen during my mining career," Chairman Michael de Villiers said in a statement. "I believe that this level of support from the Turkish government clearly demonstrates the country's commitment to facilitating mining and development investment in Turkey."
The company added that mine financing plans for the site had been conditional on securing these incentives and that discussions with certain institutions can now be advanced.
The Red Rabbit site is being advanced towards production, following its recent receipt of an Environmental Impact Assessment for the site, and in April the company said a conditional financing arrangement to fund mine construction had been negotiated with a Turkish bank.
Ariana Resources shares were down 8.6% to 0.800 pence, putting it amongst the biggest AIM All-Share fallers during early trading on Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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