Solaris announces investment protection agreement, tax incentives for its Warintza copper project in Ecuador
(Kitco News) – On Thursday, Solaris Resources (TSX: SLS) announced an agreement with the Government of Ecuador in relation to an Investment Protection Agreement (“IPA”) for its Warintza copper project in southeastern Ecuador.
According to the company’s statement, the IPA provides a foundation of certainty with respect to the legal framework governing the project, including stable mining regulations, security of title and investment for the term of the agreement, as well as significant new tax incentives to accelerate development.
Importantly, the company said that specific tax incentives include a 5% reduction of income tax, fixing the income tax rate applicable to the company at 20%, exemption from the capital outflow tax, as well as the exemption of all import duties for the import of goods needed for new investments in the project.
Solaris added that specific protections relate to the prohibition of all forms of confiscation, non-discriminatory treatment and equal playing field, legal security, tax stability and international arbitration if there are any disputes in relation to the project.
The signing ceremony for the IPA is expected to take place with the participation of the Warints and Yawi communities in the village of Warintza in July 2022. The company said it recently amended its Impact and Benefits Agreement with these communities reaffirming community support for the responsible advancement of the project.
Solaris is advancing a portfolio of copper assets in the Americas, focused on its Warintza project in Ecuador that features a broad cluster of outcropping copper porphyry deposits anchored by a large-scale, high-grade open pit resource inventory at Warintza Central.
The company also owns other projects: Capricho and Paco Orco in Peru, Ricardo via joint-venture with Freeport-McMoRan and Tamarugo in Chile, and significant leverage to increasing copper prices through its 60%-interest in the La Verde joint-venture with Teck Resources in Mexico.
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