Robex Resources Inc. (“Robex” or the “Company“) (TSXV: RBX) is pleased to announce it has executed an agreement with the Government of Mali (the “Government” or the “State“) that resolves all tax and customs claims for any period prior to December 31, 2023. The parties will take the necessary steps to execute the agreement within 90 days. All dollar figures are in Canadian dollars unless otherwise indicated.
Robex operates the Nampala Gold Mine in southern Mali, which has produced 230,000oz gold since its first gold pour in January 2017. Robex has announced plans to divest this project as it focuses on developing the Kiniero Gold Project in Guinea, West Africa.
Robex Chief Executive Officer and Managing Director Matthew Wilcox: “Signing a comprehensive agreement concludes extensive discussions with the commission established by the Government of Mali for our operation at Nampala. The agreement settles any and all existing tax assessments, customs disputes, and other assessments currently outstanding for Nampala SA while building a solid partnership with the Government. Nampala is effectively starting from a clean slate which gives the company greater certainty and stability in Mali.”
HIGHLIGHTS OF THE AGREEMENT
BUILDING A NEW ECONOMICAL PARTNERSHIP WITH THE GOVERNMENT OF MALI
- The Government of Mali embarked on a major reform of the mining sector leading to a review of all mining conventions. The initiative culminated in the approval by Decree No. 0399/PT-RM of July 09, 2024, of the “2023 Mining Code” which establishes new standard for mining permits.
- Nampala SA will sign a new mining convention governed by the “2023 Mining Code”. The parties will undertake the necessary steps to execute the agreement within a maximum period of 90 days.
- Under the terms of the agreement, the parties will amend the articles of association to allow the Government to increase its stake in Nampala SA from 10% to 20% in preferred shares interest in line with other mining company in country. Robex will work on a shareholder agreement to ensure the nomination of at least two directors on behalf of the Government on the Board of Directors of Nampala SA.
- The agreement encompasses higher revenue-based taxes and royalties albeit with specific exemptions. In particular, the Government has agreed to a 2% reduction in revenue-based taxes and royalties to be applied to Nampala which is expected to offset the cost of fuel imports that were previously exonerated under the Nampala Mining Convention.
- Importantly, under the terms of the agreement, the Company would benefit of any terms that are more favourable than those agreed to as at the date of the agreement in the event of any future amendment to the “2023 Mining Code” or Implementation Decree.
RESOLVING ALL OUTSTANDING TAX ISSUES FOR NAMPALA SA
- The agreement will settle all income tax assessments alongside all customs disputes and assessments that are currently outstanding for any period prior to December 31, 2023.
- As part of the agreement, Nampala SA will pay 10 billion CFA francs, or approximately $22.3 million from the cash generated by its operations and waive the refund of VAT credits for 5 billion CFA francs, or approximately $11.2 million. Note that on May 10, 2024, the Company received from the Malian tax authorities a final notice of reassessments for the years 2019 to 2021 with a maximum exposure of FCFA 39.7 billion (including interest and penalties), or approximately $88.8 million. The assessment mainly covered corporation tax. As at June 30, 2024, a provision of FCFA 19.3 billion, or approximately $43.1 million, was recorded, representing the most likely cash outflow at that time.
- As a result of the agreement, the Company anticipates a reversal of provision to be recorded its the subsequent quarterly financial statements which will include any impact on the VAT receivables.
SECURING THE FUTURE OF THE NAMPALA MINE
- Robex will provide the Government of Mali an operating plan for the Nampala mine to maintain jobs, make necessary investment to extend the life of the mine and maintain the requirement of the Local Content Act.
- Robex continues to engage with potential acquirers in the context of the contemplated sale of all the Company’s assets in Mali, including the Nampala mine. Management has initiated discussions, but to date no reasonable offer has been received. Any transaction is subject to confirmatory due diligence, TSXV approval, and the usual conditions for this type of transaction, including obtaining all the necessary corporate, shareholder and regulatory approvals. Due to the geopolitical context for investments in Mali, the market of potential buyers is currently very limited. Consequently, the Company cannot guarantee that a definitive agreement will be reached, nor that the conditions for closing the sale of the Malian assets will be met, or when they will be met, if ever.
