Wheaton River enters Costa Rican Free zone

The government of Costa Rica has granted Wheaton River Minerals‘ (WRM-T) wholly owned subsidiary, Metales Procesados, which owns and operates the Bellavista open-pit, heap-leach gold mine in that country, “free zone” status.

More than 60 companies currently enjoy free zone status in Costa Rica, but Bellavista is the first mining project to be approved. The status provides Wheaton 100% exemption from:

• import taxes and duties on raw materials, supplies, machinery and equipment;
• income tax for 12 years and a 50% exemption for the following 6 years;
• export taxes;
• local sales, consumption and excise taxes;
• municipal and capital taxes for 10 years and
• withholding taxes on profit repatriation

The status also provides expedited, on-site customs inspection.

The free zones are granted as incentive to attract foreign investment and promote exports in Costa Rica.

At Bellavista, the company’s most advanced project, higher gold prices are still necessary before development can begin. Capital costs for the heap-leach operation should run US$28 million, not including pre-production costs, financing costs and working capital. At full steam, it is expected to churn out 60,000 oz. gold annually at a cash operating cost of US$179 per oz. The mine’s lifespan is pegged at 7.3 years.

Earlier this year, Wheaton received final environmental approval at Bellavista, which is situated 20 km north of the Pacific port city of Puntarenas, the project centres on an epithermal gold-silver deposit with reserves of 11.2 million tonnes grading 1.54 grams gold per tonne.

Wheaton River wants to hedge a significant portion of production at a price of no less than US$350 per oz. Therefore, a spot price of about US$295 per oz. is required before construction can begin.

While Wheaton has a 100% working interest in the property, Vancouver-based junior Canarc Resource (CCM-T) has an 18.3% carried interest and receives annual preproduction payments of US$117,000 from Wheaton.

The project, when completed, will be the largest Canadian investment in Costa Rica. The two governments recently signed a bilateral free trade agreement to accelerate growth in trade investment between the two countries.