Silver Standard Resources Inc. (NASDAQ: SSRI) (TSX: SSO) ("Silver Standard") announced it has entered into the tax moratorium system in Argentina to resolve the dispute regarding the application of export duties on its Pirquitas mine. Under the conditions of the moratorium, which converts the tax liability to Argentine pesos ("ARS"), Pirquitas has agreed to pay approximately ARS 1 billion with 5% paid upon entry and the balance in equal installments over 60 months. Outstanding ARS amounts are subject to interest at a rate of 1.5% per month. Upon completion of these payments all liabilities related to historical export duties and interest will be extinguished.
Paul Benson, President and CEO of Silver Standard said, "Resolving the outstanding export duty dispute with the Argentine tax authorities provides us with the certainty required to exercise our option on the Chinchillas project. We are now moving forward to focus on making Chinchillas a successful mine development that extends the life of our Pirquitas operation well into the next decade and enables us to evaluate the viability of an underground operation at Pirquitas."
Pirquitas entered into a fiscal stability agreement with the Federal Government of Argentina in 1998 for production from the mine. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) ("Customs") levied an export duty of approximately 10% from concentrate for projects with fiscal stability agreements pre-dating 2002 and Customs asserted that the Pirquitas mine was subject to this duty. We challenged the legality of the export duty applied to silver concentrate, thereby accruing a provision for the export duty on silver concentrate of $67.1 million as of December 31, 2016. The entry into the moratorium resolves this long-standing dispute. The Argentine government removed export duties on mineral concentrates in February 2016.
About Silver Standard
Silver Standard is a Canadian-based precious metals producer with three wholly-owned and operated mines, including the Marigold gold mine in Nevada, U.S., the Seabee Gold Operation in Saskatchewan, Canada and the Pirquitas silver mine in Jujuy Province, Argentina. It also has two feasibility stage projects and a portfolio of exploration properties in North and South America. Silver Standard is committed to delivering safe production through relentless emphasis on Operational Excellence. It is also focused on growing production and Mineral Reserves through the exploration and acquisition of assets for accretive growth, while maintaining financial strength.
Source: Silver Standard