a royalty of 3% at gold prices greater than US$400 per
ounce.And An Exploitation Tax, established by Venezuelan mining law and
payable to the Republic of Venezuela, equivalent to 3% of the
value of gold produced
The principal provisions of the MOA include:
o All reserves and production are for the account of Crystallex. However,
the MOA does not transfer any property ownership rights to Crystallex.
o Initial term of 20 years, with two renewal terms, each for ten years.
o Compensation to the CVG consists of the following:
- US$15 million (which was paid by Crystallex in the third quarter
of 2002) for the use of reports, data and existing
infrastructure.
- A royalty based upon the value of monthly gold production as
follows:
i. a royalty of 1% at a gold price less than US$280 per
ounce;
ii. a royalty of 1.5% at gold prices from US$280 to less
than US$350 per ounce;
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iii. a royalty of 2% at gold prices from US$350 to less than
US$400 per ounce; and
iv. a royalty of 3% at gold prices greater than US$400 per
ounce.
- An Exploitation Tax, established by Venezuelan mining law and
payable to the Republic of Venezuela, equivalent to 3% of the
value of gold produced.
o The CVG is responsible for obtaining all environmental and mining
permits, with Crystallex providing any necessary technical information
to support the permit applications. (Application and supporting studies
have been filed by the CVG to obtain environmental and mining permits.
Approvals are pending.)
