St Barbara disputes tax assessment on Simberi operations in PNG

Australian gold miner St Barbara (ASX: SBM) is challenging an assessment by Papua New Guinea’s Internal Revenue Commission (IRC) that imposed 456 million kinas (nearly A$176 million) in additional taxes and penalties on its Simberi mine operations.According to St Barbara, approximately 64 million kinas (A$25 million) were erroneously applied by the IRC in its assessment of revised tax returns for Simberi from 2017 to 2021. After adjustment for the errors, the company says that there is just 88.1 million kinas (A$34 million) applicable to the IRC’s calculations on capital expenditure deductibles.By St Barbara’s own estimates, there should be 102.1 million kinas (A$40 million) in additional assessed income tax plus 14 million kinas (A$5.5 million) in deemed withholding tax actually in dispute by the IRC.In a media release Tuesday, the Australian miner said it remains committed to working with the IRC to resolve this situation as a matter of urgency given the damage caused to the company and its Simberi Gold subsidiary.In addition, St Barbara said it has expressed its concern that the IRC lead officer in the audit investigation team was a former tax manager with responsibility for preparation of tax returns for Simberi Gold immediately prior to his appointment to the IRC. Furthermore, the company said it understands that the lead officer’s work was not subject to review before the assessments were issued.The company noted that the IRC commissioner assured its managing director and CEO Andrew Strelein, in their meeting together in January, that Simberi Gold’s objection would be prioritized for review by IRC officers independent of the audit investigation team.“During recent meetings with all levels of PNG government the support for St Barbara and Simberi Gold has been reassuring and there is alignment on the need to clarify this matter as soon as possible, particularly given the uncertainty the announcement of this assessment caused,” Strelein stated in the press release.He stressed that both St Barbara and Simberi Gold have made “full and true disclosures of all material facts and strongly reject any suggestion of tax evasion, fraud or misleading statements”, adding that it was “inconceivable” for the IRC to claim a lack of transparency regarding the potential for future mining of the Simberi sulphides, as this information had been publicly announced and repeatedly communicated to PNG authorities.Strelein also pointed out that Simberi’s current processing facility is unable to process sulphide ore, and that further investment and permitting would be needed, so the “appropriate mine life for reference on claiming allowable capital expenditure between 2017-2021 is clearly the predicted oxide life.”In late 2024, St Barbara raised A$110 million to fast-track the proposed expansion of its Simberi operation, which involves mining the sulphide material beneath the existing oxide pits. First production is anticipated in the fist half of this year.Once complete, the addition of sulphide mining will extend the Simberi operation by at least 10 years and roughly triple its annual gold production from the current 65,000-75,000 oz. level to 230,000 oz. through 2034.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com