The open pit copper mine Cobre Panamá, run by Panamanian Mining company Minera Panamá, a subsidiary of Canada's First Quantum Minerals Ltd., is shown in Donoso, Panama, Dec. 6, 2022. First Quantum says it has reached an agreement to settle its dispute with the government of Panama over profit-sharing at the Canadian miner's Cobre Panama mine. THE CANADIAN PRESS/AP/Abraham Teran
TORONTO – First Quantum Minerals Ltd. says it has reached an agreement to settle its dispute with the government of Panama over profit-sharing at the Canadian miner’s Cobre Panama mine.
Under the finalized draft concession agreement, the company will make a payment of US$375 million plus an additional US$20 million to cover taxes and royalties up to the end of 2022.
Starting in 2023, the deal provides for a minimum of US$375 million a year in government income, including corporate taxes, withholding taxes and a profit-based mineral royalty of 12 to 16 per cent, with downside protections.
The company also says the Panama Maritime Authority will issue a resolution that will allow concentrate loading operations to resume at the port for the mine. Ore processing, which had been suspended, is expected to resume and restore the mine to full production levels over the next several days.
The proposed deal is subject to a 30-day public consultation process and requires formal approval.
It will have an initial 20-year term, with a 20-year extension option and additional extensions for the life of mine.
This report by The Canadian Press was first published March 8, 2023.
Companies in this story: (TSX:FM)
