Filed under: Uncategorized | Tags: Clontibret, Clontibret Gold, Conroy Diamonds and Gold, Minerals Exploration, Mining, Mining in Ireland, Monaghan
Today, Irish exploration company Conroy Diamonds and Gold has substantially upgraded its estimate of gold at Clontibret in Co. Monaghan to more than one million ounces.
The mine, discovered by Conroy Diamonds, is believed to be the largest gold mine ever found in Ireland or Britain. Ireland is already the largest zinc producer in Europe and the second largest producer of lead. Ireland now produces 3% of the world’s zinc and 2% of the world’s lead per year. The Exploration and Mining Division of the Department of Communications, Marine and Natural Resources state: “In terms of tonnes of zinc discovered per sq. km, Ireland ranks 1st in the world.”
The company issued a formal announcement to the London Stock Exchange that the area outside Clontibret has more than one million ounces of gold.
The company says it believes that this is the first gold resource of over a million ounces to be reported in Ireland or the UK. The news sent the company’s share price up almost 25% on London’s AIM market.
Professor Richard Conroy, chairman of Conroy Diamonds and Gold, said that in gold business terms a million ounces is a significant amount of gold, and the find puts his company into a new league.
Conroy says that indicated resources for the Co. Monaghan site now stand at 440,000 ounces with an additional inferred resource of 590,000. The latest report relates to an area amounting to only 20% of the Clontibret target.
Professor Conroy said this is a good time to find more gold, as it is now trading at $942 an ounce. He said that the company worked away when the price of gold was below $300 an ounce, believing that the price would come up and also believing that the area of County Monaghan was worth exploring.
‘Virtually everyone else had stopped exploring at that stage but we kept on, in a somewhat lonely furrow at times, but it certainly turned out well,’ he said.
The conditions of mineral resource exploration and development in Ireland are laid out in the successive Minerals Development Acts, 1940-1999. This legislation, considered as a unit, comprises the Minerals Development Act 1940, Petroleum and Other Minerals Development Act 1960, and the Minerals Developments: 1979, 1995, and 1999.
The actual terms under which minerals are explored and exploited in Ireland are set down in the Finance Acts 1922 and 1999 (and the Taxes Consolidation Act 1997 as amended by the latter), and various legislative provisions.
The Finance Act 1999 introduced a sliding scale for corporation tax. The Act mandated a 4% cut every year from 1998 to 2003, in other words, an overall cut from 32% to 12.5%. There is no provision for a review of this low rate, for instance after instance after a prescribed term of years: the Act states that the rate is to remain at 12.5% for ‘each subsequent financial year.’ This suggests a determination in state policy to retain this rate of tax for future years, regardless of the economic conditions.
In the 1999 Act, there are separate sections covering the taxation rate for both oil / gas and mineral resources. There are no state mining companies. Minerals are developed by private enterprise, by means of a license issued under the Minerals Development Acts 1940-1999. These licenses are legally binding contracts.
According to the Department, there is ‘wide discretion’ regarding the type of payment or royalty on a mine. Mining rights can be given free of charge if the Minister deems this to be ‘in the public interest.’ The criteria the Department employs to decide on payments to the state by private mining companies are as follows:
* The likely returns on a company’s investment.
* International royalty rates (no definition of what constitutes ‘international’ is provided; neither are any comparative data).
* The ‘need to continue to attract international exploration funding.’
* The ‘expectations of the State as the mineral owners and the developer’s achieving a fair return,’ having regard to economic conditions, and ‘regarding the need to allow for the many exploration failures.’
These criteria seem less about achieving a fair return to the taxpayer for hte profits gained by mining companies from low-cost resources, than a public relations-based defence of the low terms routinely granted to the mining companies. What constitutes a ‘fair return’ is not defined.
It seems fair to assume that ‘economic conditions’ are not a factor, and that the main consideration is conceding terms overwhelming to the advantage of mining companies.
The compensation payable to the state consists of ‘Dead Rent,’ a yearly payment decoupled from production volume, and royalties on the sale price of the extracted ore. The company’s transport costs are deducted from this compensation. The ‘commonest system’ for industrial minerals, according to the Department, is based on royalty payments per tonnage extracted. Rates are ‘likely’ to be 25 cents to 50 cents per tonne extraced.
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