OPERATIONS

Nicaragua, set between the Pacific Ocean and the Caribbean Sea, is the largest nation in Central America and is known for its dramatic terrain of lakes, volcanoes and beaches. Spanish is the official language, though English is widely spoken.

Nicaragua was one of the largest gold producer in the 1950’s, where gold exports reached $39.9 million in 1980, fell to $15 million in 1982, and were then suspended through 1985, due to the civil war. As a result it has missed all the resource and exploration booms that have occurred over the last 40-50 years. The gold mining industry is the second largest exporter by value for the country and enjoys significant government support where it is actively seeking to develop its extensive gold and silver mineral resources, which include low sulfidation epithermal ore deposits, porphyries and skarns.

At least five deposits containing over 1 million ounces of gold have been discovered in Nicaragua, and the country’s total recorded gold production is over 14 million ounces. Under the current pro-business government there has been a resurgence of gold production over recent years with three mines re-opening. This has resulted in gold becoming the third largest export by value for the country in 2015.

The three key mining operations that re opened were La Libertad (B2Gold), El Limon (B2Gold) and Bonanza (HEMCO/Mineros), nevertheless, the country is having new gold discoveries, and new entities are been attracted to the ‘Mining Triangle’ located on northeastern Nicaragua, where historical production has been over seven million ounces.

Due to the significant government support, the mining sector has some attractive business conditions:

•           Income tax rate of 30%

•           Mining royalty rate of 3%

•           Mining concessions valid for 25 years with possible renewal for another 25 years

Nicaragua has made important progress in the improvement of its investment climate in an effort to continue attracting high-quality foreign direct investments. The main legislation that governs foreign investment consists of Law No. 344 for the Promotion of Foreign Investments which establishes a series of solid legal guarantees for foreign investors, such as:

Full currency convertibility – Freedom to repatriate all capital and profits, dividends or earnings generated in the national territory.

Full foreign ownership permitted – There is no discrimination against foreign investors, whether on total ownership of the company or as shareholders.