Hoy newspaper reports that Mining Director Pedro Vasquez Chavez says the Dominican government has not reached any conclusive decision on the terms of a deal with the Toronto-based Canadian company Unigold. Yesterday, it was reported that the government had offered Unigold the advance sale of revenues derived from the exploitation of the Pueblo Viejo gold mine, one of the world’s largest undeveloped deposits, containing over 30 million ounces of gold. The Pueblo Viejo mine, located in Cotui, is currently under lease to the Placer Dome company of Vancouver, Canada. In August 2002, that company announced the launch of a feasibility study on the deposit, which foresaw annual gold production of 400,000 ounces. DR1 reported yesterday on an announcement made by Unigold on its website whereby the company agreed to acquire revenues from a 3.2% net smelter return on the Pueblo Viejo gold deposit, as per a letter of intent signed with the Dominican government. This agreement would represent US$21.3 million in cash this year for the Dominican government, in addition to a US$2.58-million cash contribution to an entity called Fundacion Cacique Inc, described as a non-profit organization created to support and assist the Dominican people. Unigold was established in 2003 to develop possible gold deposits in the Neita and Sabaneta areas along the Haitian border. The existence of the proposed deal was unknown prior to the information leak to Hoy newspaper yesterday.
Diario Libre reporters highlight today that if the letter of intent announced by Unigold to its shareholders in Canada is for real, then Unigold, which did not participate in the tender for the gold mine, would be given the right to exploit the gold deposits if Placer Dome decides to not go ahead. The Australian company, MIM was the runner-up company in the tender. Diario Libre report indicates that according to the agreement Placer Dome signed with the Dominican government, Article 14.1 establishes that Placer Dome cannot unilaterally negotiate the mine’s benefits. Placer Dome has not issued a statement on the matter.