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Gold/Mining/Energy : Steppe Gold (SPE:V)
SPE 15.29-0.1%Dec 8 4:00 PM EST
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To: Steve Johnston who wrote (614)2/16/1998 6:18:00 PM
From: John Menzies   of 1248
 
** QUESTION ON ROYALTIES ****
RECEIVED THE FOLLOWING QUESTION VIA EMAIL
Question:

You are right about it being tough reading. My only question is in
regards to the sentence "The Contract must include royalty and/or bonus terms, among others, which are negotiated on a project-by-project basis based upon the individual economics of the project."
What are the royalties Steppe pays and what type of renumeration is paid to either the gov't or gov't officials?

Answer:

Royalties - 3% of gross metal production - typical of most western countries but in this case is offset against exploration expenditure on the project area - so in our operating cost estimates are explroation costs which offset resource replacement royalties totalling from $400,000 to 800,000 per annum.

Other payments to governemnet include taxes of course. We will be employing a lot of locals by design particulalry from our local community at Kainar. During the last couple of years we have also had training programs where we sent various staff overseas for techncial and language courses.

There are mining propoerty rental which is lower than western countries and is quite acceptable. There are also some small local taxes and charges as you would find in Canada.

Hope this answers your query.
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