do business in the Dominican Republic - Pellerano & Herrera

Pellerano & HerreraAttorneys at lawValley.This mine's reserves are considered to be “first class”, with an estimatedcapacity of 403,000 ounces of gold, 2.2 million ounces of silver and 90 millionpounds of zinc per year for at least 30 years.However, due to a considerable drop in production and the low gold prices at theinternational markets,the public enterprise did not have the resources required toexploit them properly.Therefore, an international bidding process was carried outin order to choose an international mining company that would act as long-termoperator of Pueblo Viejo.The procedure ended with the selection on June 2001 ofa Canadian capital company, which committed itself to invest US$336 million, andto start operations within 36 months after the execution of the leasing agreementwith the authorities that will have a 25-years duration.Finally, we should note that in November 2004, after ten years, the Program SYS-MIN I came to an end, which produced a wide-ranging study that can serve as aplatform for the geological and mining development of the Dominican Republic.Its general benefits are the following:1. The negative evolution that the sector had at the end of the 80's and duringthe 90's has been reverted by promoting and widening the knowledge of thecountry's subsoil and of mineral resources in particular, the exploitation ofcertain rocks and industrial minerals, and the control of environmentalimpact. In this way private investment has been attracted to this sector, thuscontributing to the vertical and horizontal diversification of the nationaleconomy.2. Contributing to the knowledge of the country's subsoil and of mineral andwater resources in particular, as well as seismic activities. It has also helpedto make better use of certain industrial minerals by rationalizing productionand the control of environmental impact.67OBTAINING MINING CONCESSIONSLaw 146 of 1971 regulates mining activities.The entity charged of supervising thesector is the General Mining Office of the Ministry of Industry and Trade(“Secretaría de Estado de Industria y Comercio-SEIC”).Law 146 allows any national or foreign person or company to register the discoveryof mineral deposits and request a concession in order to explore orexploit such deposits.The exploration concession grants its holder the right to carry out activitiesabove or below the earth surface in order to define the areas containing mineraldeposits by using any technical and scientific methods. For such purposes hemay construct buildings, install machinery, communication lines and any otherequipment that his researches require.The exploitation concession may be requested at any time during the explorationstage, and grants the right to prepare and extract all mineral substances found inthe area, allowing the beneficiary to exploit, melt and use for any business purposethe extracted materials.This concession is granted for a period of 75 years.