Solaris Resources (TSX:SLS) (OTCQB:SLSSF) has announced that a major Investment Contract for the Warintza Project has been signed. The contract ratifies the Investment Protection Agreement announced on June 9, 2022. The IPA provides a strong foundation of certainty for the company as it relates to the legal framework governing the project, including stable mining regulations, security of title and investment, and new tax incentives to accelerate development.
It includes specific protections related to the prohibitions of all forms of confiscation, non-discriminatory treatment, legal security, and tax stability. The agreement notes a 5% income tax reduction, fixes the income tax rate at 20% and includes an exemption from capital outflow tax and import duties for the import of goods needed for new investments. It also includes important detailed procedures for the dispute resolution process and stipulations for international arbitration protection.
Mr. Daniel Earle, President & CEO, commented: “We are very grateful to the Government of Ecuador and our host communities for their support in reaching this major milestone. The Investment Contract provides a foundation of certainty, significantly de-risking the Warintza Project by securing a stable regulatory and fiscal framework with international legal protections for the Project while also enhancing its returns through permanent new tax incentives.”
Mr. Julio José Prado, Minister of Production, Foreign Trade, Investment, and Fisheries of the Government of Ecuador, stated, “I want to thank Solaris for the commitment with the country and with Morona Santiago, it is an example of sustainable mining, responsible with the environment and the communities. Since the first contacts in the Ecuador Open for Business event, we have worked for a year and today we signed the Investment Contract. The Warintza Project has a very important influence, and they are working with the community in an exemplary manner; this will allow more development and prosperity for the zone and for Ecuador.”
Mr. Fernando Santos Alvite, Minister of Energy and Mines of the Government of Ecuador, stated, “I wish the best of success to the Warintza Project. This is a very important project for the country in terms of scale and investment. It is also important for what it represents, which is a great commitment and understanding between the communities and the Company.”
Mr. Vicente Tsakimp, Lead Coordinator of the Warintza Project Strategic Alliance, stated, “The Warints and Yawi Shuar Centers are glad that the Warintza Project is advancing and that we are part of it. Our work and coordination with the Company are an example that participatory mining can be done, and we are proud of everything we have achieved.”
Highlights from the agreement are as follows:
The Investment Contract provides for the following protections and incentives for the duration of the title of the Project which extends with renewal to 2066:
- Security of investment
- Stability of mining law
- Stability of taxes at a reduced income tax rate of 20% (25% previously)
- Exemption from capital outflow tax (5% previously)
- Exemption from import duties (up to 5% previously)
- Detailed procedures for dispute resolution and international arbitration protection