about lost revalues

Emperor denies claims about lost revalues

FIJI’S Emperor Gold Mining

Co. (EGM), Ltd denied claims made in the country’s Senate that the Fiji Government lost F$ 3 million (US$ 1.6 million) dollars in gold royalties resulting from the mine’s operations.

Senator Atu Bain claimed in the Upper House early July that both the Government and landowners have become “victims of this dubious tax deal between EGM and the previous Government of Sitiveni Rabuka.”

EGM’s General Manager, Martin Jacobsen, said Senator Bain failed to recognise that during the same year

(1992 -1997), the company invested almost F$ 50 million (US$ 26 million) in capital expenditures on projects designed to improve and modernise the mine.

“In the last five years, it is pertinent to point out that Emperor has not paid out any dividend to its shareholders.

All surplus income was reinvested into the company”, Jacobsen said.

Senator Bain said between 1992 - 1997, gold sales from EGM totaled FJDS36S.I million (U 55186.2 million).

Of that amount, the Fiji Government only received F$ 874, 000 (US$ 445, 000) in gold royalties.

Emperor denied the Senator’s alle gation that the State and landowners are victims of the royalty system.

Jacobsen said Senator Bain also failed to recognise that Emperor paid out in excess of F$ 10.5 million (US$ 5.46 million) in gold export taxes.

“Emperor holds freehold title over a major portion of the mining title, therefore Emperor would be victims of its own action! How Senator Bain can claim the tax deal negotiated between Emperor and the previous Government was ‘dubious’ is beyond me,” Jacobsen said.

He said Fiji’s mining regulation empowers the Director of Mineral Resources, with the approval of the Minister responsible, to reduce the royalty rate of five percent. The Tax agreement allows EGM a royalty rate of 2.5 percent of adjusted chargeable income.

“I wish to assure Senator Bain that all royalty payments are done legally, in accordance with the conditions of the agreement and the mining leas

es,” EGM’s General Manag er said.

In another development, the mine has announced that 2,000 people employed by EGM will not be immediate ly affected by another drop I in the price of gold on the world market. The Bank of England announced that it had sold 25 tons of gold reserves, which caused the price of gold to drop to its lowest amount in 20 years.

The price of gold fell by 30 cents an ounce to F$ 257 (US$ 133.60) an ounce after the Bank of England announcement.

Jacobsen said gold prices

have been on the decline since 1997 and EGM had earlier been forced to reduce its workforce by 500.

EGM is owned by Australian Emperor Mines, Ltd. (PAC

News) ■

A miner at the Emperor Gold Mine, located in the hills of Valukoula, in the north of Fiji's main island, Viti Leva. The company has faced criticism in the country's Senate recently