Professional Documents
Culture Documents
FOREWORD
ACCEX has been structured to develop and perform the most challenge
and profitable projects in Brazil, aiming at achieving great results in short, medium
and long terms.
INDEX
SECTION I INTRODUCTION
3. FIGUEIRA BRANCA GOLD MINING PROJECTS MAPS, PLANS & IMAGES ......................... 60
4. REFERENCES .................................................................................................................................................. 74
SECTION I INTRODUCTION
1. BUSINESS ACTIVITIES
2. CORPORATE STRUCTURE
3. ENVIRONMENT PROTECTION
In this Business Plan, the focus is gold which is produced in the form
of dor and shipped to refineries for final processing into ingots. ACCEXs strategy is
to increase shareholder value through increases in precious metal reserves, net asset
value, production, long-term cash flow and earnings per share. It also consists of
optimizing the performance, and therefore, the value, of existing operations,
investing in quality exploration and development projects and acquiring new
potentially accretive properties and projects. ACCEXs operations and mineral
resources are impacted by, among other things, changes in the metal prices. The
average price during 2012 was approximately US$ 1,670/t oz/Au (One Thousand
and Six Hundred and Seventy United States Dollars per Troy Ounce of Gold).
ACCEX used the price of US$ 1,200/t oz/Au (One Thousand and Two hundred
per Troy Ounce of Gold) at the end of 2012 to estimate mineral reserves, and from
the first semestre to the 31st of December, 2013, the average price of US$ 1,400/t
oz/Au (One Thousand and Three Hundred per Troy Ounce of Gold).
4. MARKET ANALYSIS
The price of gold is linked historically to the prices in London and New
York, reflecting therefore the expectations of the international market. It suffers,
however, directly influence of the prospects of the internal market and, especially,
the fluctuating dollar rate. Thus the domestic price is calculated directly for the
changes in the market price of the dollar and fluctuating metal prices on the NYSE.
The price of gold in real grams, calculated from the price in dollars per troy ounce
(the U.S. dollar floating) provides a benchmark price. Traditionally, the price of the
BM&F maintains parity with this reference value ranging 2% (Two Percent) on
average.
There are two types of investors in the gold market in Brazil: the
traditional investor - which uses gold as a store of value and speculators who are
looking for immediate gains in relative gold/dollar/stock looking for the best
alternative at the time.
There are three ways to purchase gold on BM&F Bovespa. The most
common is to purchase the metal in the spot market. But investors can also make the
purchase through the futures market and options. The futures market contracts
allow the purchase of gold by a certain fixed price on a set date. But until maturity,
sellers and buyers of contracts should go pay adjustments to each other depending
on the variation of the metal price (appreciation or depreciation).
In option contracts, the investor pays for the right to make the purchase
at a given price on the exercise date. In option contracts, the investor has no
obligation to buy, unlike the futures business.
Contracts available are traded on the spot market. This same standard
lot is futures and options contracts of purchase and sale (for which the investor
acquires the right, but not the obligation, to negotiate the asset at a specified price
fixed in a future period).
Currently, the most traded contract is the 250 grams (two hundred
and fifty grams) available standard in sight. On certain days, the contract represents
100% (one hundred percent) of all deals closed in the Brazilian market.
In the international market, the main trade centers of gold are London and
Zurich where gold is traded in the OTC market and not via stock exchange. Another
major business center is the Commodities Exchange of New York (COMEX) which
only operates in the futures market. There is also in it a strong market for physical
gold. The gold market, like the stock market, is part of the group of so-called risk
markets since their prices vary according to the law of supply and demand.
The following are worldwide known evidences of gold: 375, 500, 583,
585, 750, 958, 996, 999.9 (used in the aerospace industry). It is more often the
mixture (also called alloy) of gold with number 583. The alloys of this test may have
different colors, depending on the amount and composition of metals. The gold proof
number 958 is of three components which contains, besides gold, silver and copper
and is used generally to make wedding rings. This league has a strong yellow color
and is close to the color of pure gold.
Gold is the second most important mineral exported from Brazil and iron
ore is the first one. The countries that import from Brazil are the United Kingdom
(45%), Switzerland (32%), the United Arabic Emirates (12%), the United States
(9%) and Canada (2%). The major gold reserves are located in South Africa (6,000
tonnes), accounting for 14% (Forteen Percent) of the total reserves on Earth.
Exploration and exploitation mining of oil, natural gas and other fluid
hydrocarbon deposits;
The economic activities relating to oil, natural gas and other fluid
hydrocarbon monopoly may be performed by companies founded under the
Brazilian laws, with main office and administration in Brazil, under an agreement
with the Federal Government;
2. MINING CODE
The Mining Code defines and classifies deposits and mines, sets
requirements and conditions for obtaining authorization, license and concession,
explains the rights and duties of the holders of mining rights, regulates cases for
cancellation, forfeiture and repeal of the mineral rights and regulates other aspects
of the mining industry and mining company operations. It also decides upon the
competence of the specific government agency of the Ministry of Mines and
Energy, the National Department of Mineral Production DNPM, in the
management of mineral resources and supervision of the mining activities in Brazil.
2.1 SYSTEMS
REGIONS IN BRAZIL
MINERAL SUBSTANCES LEGAL OTHER
AMAZON1 REGIONS
1The Legal Amazon covers the region including the States of Rondonia, Acre, Amazonas, Roraima, Para, Amapa and
Tocantins, and by some areas of the State of Mato Grosso North Latitude 16, and the State of Maranhao West
Longitude 44.
2 For immediate use in civil construction, preparing aggregates and mortar, providing that they do not undergo
industrial processing.
6Rock trimmed or chiseled for cobbles, crosshead guides, gutters, stays and similar products. Rock crushed for
immediate use in civil construction.
Every and any company incorporated under Brazilian laws, with main
office and administration in Brazil, and whose corporate objective is the survey and
exploitation of mineral resources, is able to obtain a Research Authorization Permit
and an Exploitation Concession.
In addition, the intended area(s) must be free for exploration, that is,
not to be the subject of:
Once the legal and regulation requirements have been met, the
exploration authorization is granted by under an Authorization Permit from the
DNPMs General Director, giving its holder rights and obligations relating to public
authorities and third parties. The rights and obligations involved in the Research
Authorization Permit are as follows:
To perform the work necessary for defining the deposit, within the
term of maximum validity of the Research Authorization Permit, which is 3
(Three) years, and can be extended for no longer than another equal period, at
DNPMs discretion and in full compliance with the conditions stipulated by the
Mining Code. With regard to the mineral substances in an exploration area within a
maximum area of 50 ha (Fifty Hectares), the valid period is 2 (Two) years with the
limited extension of another year over a three-year period, renewable for a further
period, by DNPM criteria, under the conditions stipulated in the Mining Code;
To negotiate the deed, which is personal and has asset value, and the
holder may grant or transfer it before the approval of the final report of the
exploration work, only requiring the DNPM prior consent;
CHARGE VALUE
PERIOD
(UFIR/HA/YEAR)
To pay for the costs of the inspections carried out by the DNPM
during exploration and exploitation work.
When the holder, after having been fined more than twice in one year,
continues to disobey the decisions of the DNPM inspection;
Not paying the annual fee per hectare required by the DNPM.
The area in question must be free for exploration and restricted to the
maximum boundary stipulated for the mineral substance and region under study;
Brazils mineral resources, which then became fell under federal domain. The
Constitution itself acknowledged, however, the right acquired by the owners of
mining deposits, albeit temporarily suspended or stopped, providing that they were
documented and registered at DNPM, within the period and as stipulated by an
infra-constitutional law (1934 Mines Code).
The mining rights of manifest claimstake mines still prevail, and their
holders are liable subject to the same conditions and obligations stipulated by the
Mining Code and its Regulations for assigned mines (Mining Concession System),
concerning in relation to mining, taxation and inspection.
The land owner is guaranteed a share in the mining results under the
Constitution equal to 50% (Fifty Percent) of the total value due to the State,
Federal District, Cities and Federal Government, as financial compensation for
exploiting of mineral resources the so-called Federal Royalty. The payment to the
landowner is made on a monthly basis no later than the last working day of the
month after the generating month, that is, at the time of invoicing (See details of the
calculation basis for financial compensation in the section relating to Fiscal Aspects).
Express Authorization, from the owner of the land where lies the
deposit of the mineral substance to be exploited;
This system was only regulated in February, 2000, and complies with
an old demand, especially of mayors, who can, among other possibilities, have an
element of civil construction added cost ballast to improve negotiations with
construction companies when carrying out works in their respective municipalities.
The public agencies may extract minerals for use in their respective
public works, but cannot market or outsource extraction activities. The application
for registering extraction will be sent on its own form to the General Director of the
DNPM, with the relevant documents required to facilitate the analysis;
Federal Laws:
Law n. 6.938, dated the 31st of August, 1981, and its amendments
(Acts n. 7.804 of the 18th of July, 1989, and 8,028 dated 12th of April, 1990
Provides for the National Environmental Policy, its purposes and mechanisms of
formulation and application;
Law n. 9.605 dated the 12th of February, 1998 Provides for penal
and administrative sanctions derived from conduct and activities harmful to the
environment;
Federal Decrees:
Decree n. 97.632 dated the 10th of April, 1989 Provides for a Plan
for rehabilitating an area degraded by mining;
Decree n. 99.274 dated the 6th of June, 1990 Regulates Law n. 6,938
dated the 31st of August, 1981;
Given the size of Brazil and the particular regional or local features, the
Brazilian environmental policy is executed at three different levels of public
administration Federal, State and City. Coordinating and formulating the Brazilian
Environmental Policy is the responsibility of the Ministry for the Environment. In
connection to it is the CONAMA, the deliberative and consultant board for
environmental policy.
1. MINING TAXATION
The following tables list the most relevant federal and state taxes and
levies which are currently collected from mining companies for mineral products
commercialization:
Due to the size of its total revenue, mining companies in Brazil are
liable for paying income tax through one of the following systems:
Any due income tax is calculated based on the sole rate of 15%
(Fifteen Percent) on the taxable net income, the portion of taxable income of over
R$ 60,000.00 (Sixty Thousand Brazilian Reais), equivalent to US$ 25,000.00
(Twenty-Five Thousand United States Dollars), being charged an extra tax at the
rate of 10% (Ten Percent).
The tax is collected in a single installment by the last working day of the
month following the calculation. The estimated income is calculated on a percentage
basis, fixed by law, on the gross income of the month of calculation, which is 8%
(Eight Percent) for mining companies, plus capital gains, other revenue and taxable
positive results calculated in the month.
The income tax due is calculated based on the sole rate of 15% (Fifteen
Percent) on the estimated monthly income, and an extra tax at the rate of 10% (Ten
Percent) on the portion of income of over R$ 20,000.00 (Twenty Thousand
Brazilian Reais), equivalent to approximately US$ 8,350.00 (Eight Thousand
Three Hundred and Fifty United States Dollars).
To calculate the income tax on the taxable income at the end of the
year, the same 10% (Ten Percent) rate is used, and any portion of income more
then R$ 240,000.00 (Two Hundred and Forty Thousand Brazilian Reais),
Since the 1st of January, 1996, the taxable net profit of companies is
liable for Corporate Income Tax (IRPJ) based on the sole rate of 15% (Fifteen
Percent) and an additional tax of 10% (Ten Percent) on any net profit over R$
240,000.00 (Two Hundred and Forty Thousand Brazilian Reais), equivalent to
approximately US$ 100,000.00 (One Hundred Thousand United States Dollars).
SRF fixes as calculation base for the profit forecast the sum of 30%
(Thirty Percent) of net earnings, on which is collected the tax rate of 15% (Fifteen
Percent). The company is also liable for the additional tax if the real net profit
calculated, at the end of the year, is over R$ 240,000.00 (Two Hundred and Forty
Thousand Brazilian Reais).
consolidated, and an annual base obtained to calculate too many or too few
payments made during the year. In addition to depreciation, amortization of pre-
operating expenses, compensation for losses in previous years, losses in foreign
currency exchange and other deductions foreseen in tax law and applicable to any
industrial activity, in the specific case of mining the following are also considered
deductible when calculating the taxable profit:
Under the tax system, the general rules for calculating and collecting
CSLL are as follows:
SOCIAL CHARGES (INSS & FGTS) Some of the other social expenses
to be paid by a company are as follows:
Interstate 18%
Importation 18%
(*) The calculation base for some goods may be reduced to zero. In the case of iron ore exports, for
instance, this reduction may even be approximately 53%.
In recent years the Federal Government has been making ongoing and
in-depth readjustments in its policy on foreign capital in order to encourage new
direct investments in several segments of the Brazilian economy, now seen, within
the government strategy for economic growth and industrial development.
The foreign investor may remit overseas the return of its investment,
either as dividends or capital gains. Capital gains are from the reduction of capital,
settlement or sale of an investment in Brazil. There is no limit on the value of profits
that may be remitted as dividends overseas, and they are exempt from the 15%
(Fifteen Percent) rate withholding income tax.
Such incentives are only for the Northeast and Amazon regions and are
administered by the Northeast Development Agency (SUDENE) and the Amazon
Development Agency (SUDAM), respectively.
The tax incentive features are the exemption or reduction in income tax
and extra taxes over the profit income from exploiting the project installed in such
region or additional results produced by the project installed in such region which
are granted in the following cases:
50% (Fifty Percent), from the 1st of January, 2004 to the 31st of
December, 2008; and
50% (Fifty Percent), from the 1st of January, 2004 to the 31st of
December, 2008; and
25% (Twenty-Five Percent), from the 1st of January, 2009 to the 31st
of December, 2013.
25% (Twenty-Five Percent), from the 1st of January, 2004 to the 31st
of December, 2008; and
12.5% (Twelve Point Five Percent), from the 1st of January, 2009 to
the 31st of December, 2013.
Companies that, on the 31st of December, 1993, were enjoying the 50%
(Fifty Percent) decrease for continuing to operate projects in the areas with
incentives under the terms of the law prevailing at the time will continue to enjoy the
incentive until the 31st of December, 2001, when the new reduced percentages will
apply. It is worth mentioning that the income tax which was not paid because of tax
incentives will constitute a capital reserve to be used in the actual project itself and
cannot be distributed to shareholders. All current tax incentives for the Northeast
and Amazon regions will be extinguished after the 1st of January, 2014.
Most Brazilian States grant ICMS (Refer to Section II, Item 1.3) tax
incentives to companies which may eventually start up in their territories, by
reducing the calculation base of the tax or defer its collection.
Given the long period which Brazil experienced high inflation rates, the
basic long term financing mechanisms available to companies and the government
itself to maintain and expand national economic activities and development, have
depended on compulsory savings, government resources and foreign savings.
In short, the Brazilian financial market still has a limited capacity for
provideing resources at compatible terms and costs with production and investment
requirements, and it is up to the companies resorting to foreign capital, the National
Bank for Economic and Social Development (BNDES) which is the main
institution that offers long term financing in Brazil or to a few state or regional
development banks.
2. BNDES SYSTEM
Risk Spread rate reflecting the credit risk, and may vary from one
customer and operation to another;
Total Financing Term the maximum total term (grace period plus
amortization) varies according to the paying capacity of the project or company.
3.2 DEBENTURES
foreign institutions commercial and investment banks there are already major
reductions in the spread in the cost of foreign financing and greater availability of
resources.
Lastly, the Cenozoic layers present a potential for bauxite, kaolin and
diversified clay deposits, as well as alluvial ores of gold, gems (including diamonds),
tin, ilmenite, zirconite, rutile, monazite and other heavy minerals. The wide diversity
of lands and geological environments in Brazil are the main characteristics that
provide Brazil the status of possessing one of the largest mineral potentials in the
world, comparable to the United States, Russia, Canada, Australia, China and
South Africa.
The oil and natural gas reserves total 7.3 Billion barrels and 226
Billion m (1.4 Billion of oil equivalent barrels OEB), respectively. Due to the
opening up of the state monopoly to permit private enterprise to undertake the
exploration, development and production of oil and gas, a significant increase in
reserves and production is expected, which will make the country self-sufficient.
The contribution from the mineral sector rises to 8.2% (Eight Point
Two Percent) of the GDP when adding to the extractive industry the transformation
of its primary minerals into metals and alloys, cement, ceramics, fertilizers, glass,
chemical compounds, among other products.
The trade balance has a heavy expenditure with petroleum and its by-
products that, separately, are still responsible for over 50% (Fifty Percent) of the
mineral sectors imports.
In the exports of the Brazilian mineral sector, the contribution from the
mineral extractive industry is quite significant, being responsible for over 58% (fifty-
eight percent) of all mineral goods exported.
Imported Brazilian mineral goods are over US$ 7 Seven Billion United
States Dollars), the largest portion of this total existing petroleum (US$ 4.1
Billion).
1. TECHNOLOGICAL KNOW-HOW
The access to the Figueira Branca Farm is done by dirt road that
works well so terrestrial logistics is very good for machinery, equipment, products,
and personnel transportation and the final gold in bullions can transported in small
aircrafts up the main centers of the country and abroad.
The gold deposit is quite near the farm, located about 50 km from
Terra Nova do Norte downtown. The gold mineralization has been formed in veins
of Proterozoic granites.
The mining area has many clean water sources and the region is
served with three-phase electric light power plant;
The Operation License (LO) has already been issued by the Mato
Grosso State Secretary of Environment (SEMA-MT) for all processes.
NET
PROFESSIONAL/ SALARY WORK/SOCIAL BENEFITS (R$) TOTAL
N.
FUNCTION
(R$) IRPF FGTS INSS (R$)
Attorney 02 169.162,00 52.000,00 20.800,00 18.038,28 260.000,00
Accountant 01 37.780,86 13.000,00 5.200,00 9.019,14 65.000,00
Assistant of B.D. 04 29.952,00 Exempt 3.328,00 8.320,00 41.600,00
Bucket Operator 04 86.027,76 31.200,00 12.480,00 26.292,24 156.000,00
Chef 04 78.991,12 26.000,00 10.400,00 14.608,88 130.000,00
Cook 08 93.600,00 Exempt 10.400,00 26.000,00 130.000,00
Chemist 04 260.000,00 80.860,00 32.340,00 31.200,00 404.400,00
Doctor 04 300.883,34 93.600,00 37.440.00 36.076,66 467.960,00
Drill Operator 04 86.027,76 31.200,00 12.480,00 26.292,24 156.000,00
Excav. Operator 04 86.027,76 31.200,00 12.480,00 26.292,24 156.000,00
Exec. Secretary 07 133.426,02 54.600,00 21.840,00 63.133,98 273.000,00
Gen. Manager 01 56.500,86 18.200,00 7.280,00 9.019,14 91.000,00
Gen. Workers 200 3.250.000,00 Exempt 260.000,00 357.500,00 3.867.500,00
Jr. Geologist 01 56.500,86 18.200,00 7.280,00 9.019,14 91.000,00
Jr. Min. Eng. 01 56.500,86 18.200,00 7.280,00 9.019,14 91.000,00
Labor Sec. Chief 02 34.516,82 10.400,00 4.160,00 2.923,18 52.000,00
Loader Operator 04 86.027,76 31.200,00 12.480,00 26.292,24 156.000,00
Log. Manager 02 43.013,88 15.600,00 6.240,00 13.146,12 78.000,00
Mechanic 02 34.516,82 10.400,00 4.160,00 2.923,18 52.000,00
Nurse 04 86.027,76 31.200,00 12.480,00 26.292,24 156.000,00
Nutritionist 02 69.009,80 24.180,00 9.672,00 18.038,20 120.900,00
Pilot 01 84.580,86 26.000,00 10.400,00 9.019,14 130.000,00
Sr. Min. Eng. 01 75.220,86 23.400,00 9.360,00 9.019,14 117.000,00
Sr. Geologist 01 75.220,86 23.400,00 9.360,00 9.019,14 117.000,00
Warehouse Chief 04 52.417,00 Exempt 5.824,00 14.560,00 72.800,00
Security Guard 12 207.100,00 62.400,00 24.960,00 17.539,00 312.000,00
TOTAL 279 5.465.474,00 726.440,00 570.128,00 928.018,00 7.744.160,00
Source: MTE and Labor Unions
2. FINAL STATEMENTS
4. REFERENCES