Summary
Newmont Mining Corporation (NEM) disclosed in an 8-K filing on March 23, 2006, that its 50%-owned Zarafshan-Newmont Joint Venture (ZNJV) in Uzbekistan received a verbal notification from the Uzbekistan Ministry of Finance expressing a desire to renegotiate or eliminate Decree 151 during 2006. Decree 151 is a crucial government decree that currently shields the ZNJV from adverse changes in tax laws and provides other significant financial and operational benefits. This potential change poses a material risk to Newmont's operations in Uzbekistan. The joint venture agreement stipulates that the benefits of Decree 151 are to remain in effect as long as ZNJV has ongoing operations. While Newmont believes the decree should remain unchanged, the outcome of these discussions is uncertain and could negatively impact the ZNJV's financial and operational results. Investors should monitor developments regarding this renegotiation closely.
Key Highlights
- 1Zarafshan-Newmont Joint Venture (ZNJV), 50% owned by Newmont, was verbally notified of potential renegotiation or elimination of Decree 151.
- 2Decree 151 provides tax protection and financial/operational benefits to ZNJV.
- 3The Uzbekistan Ministry of Finance indicated a desire to alter Decree 151 in 2006.
- 4Newmont believes the decree should remain unchanged.
- 5The outcome of discussions with the Uzbek government is uncertain.
- 6Potential amendment or elimination of Decree 151 could adversely affect ZNJV's results.