Having secured a debt guarantee from VietABank, Phuoc Son Gold returned to operations and has eleven months to repay outstanding tax debts of VND334 million ($15.2 million).
Dak Sa is one of two gold mines in Vietnam applying modern technology in extracting and processing gold. The new investment came from a joint venture between the New Vietnam Mining Company, the Vaco Gold Company, and the Phuoc Son Gold Mining Company.
According to the CEO of Phuoc Son Gold, Mr. Paul Frederick Seto, the restarting of mining will not only create jobs for some 1,000 people and be a revenue source for the company to repay its tax debts but will also curb illegal gold mining activities in the area.
Its Board of Management will quicken the machinery maintenance process and engage staff to bring the mine back to 100 per cent capacity. It also expects operations to be stabilised in the near term as it expands exploration.
According to the Board Member Mr. David Seton, the company has invested millions of dollars in a waste disposal system that meets relevant standards. Phuoc Son Gold will also work with authorities to restrict illegal gold mining activities, helping to control security in the area.
After returning to operations the company will also research and estimate gold reserves to compile a realistic plan. Phuoc Son will repay its tax debts to the State and also the debts of local businesses and residents.
According to the Deputy Chairman of the Quang Nam People’s Committee, Tran Dinh Tung, “the return of Phuoc Son Gold is not only good for the business itself but also for the province. Local authorities will provide favorable conditions for Phuoc Son Gold to return to operations.”
“However, Quang Nam requires the business fully meet its responsibilities to the State and the province while at the same time complying with laws and regulations by publicising the location and time of its trading so that authorities and local residents can participate in supervision,” Tung added.
It was reported in early July that VietABank, which holds 35 per cent of Phuoc Son, had proposed being its tax debt guarantor. A statement sent to the Quang Nam Provincial People’s Committee said the bank would be responsible for tax debts if the gold mining company could not pay.
The Phuoc Son Gold Company and the Bong Mieu Gold Company, under the ownership of the Canadian Group Besra, reportedly owe VND430 billion ($19.5 million) in tax payments, according to the provincial Department of Taxation. Bong Mieu Gold remains inactive.
Dak Sa is the largest gold mine in Vietnam with reserves estimated at some 30 tonnes. Upon the resumption of operations its extracting and processing capacity will reach 18,000 tonnes each month. Phuoc Son Gold’s ability to resolve its tax debts during the eleven month period is therefore entirely feasible.
