(Alliance News) - Highland Gold Mining Ltd said Wednesday that two Russian Far East projects have been included in a special economic zone set up to boost investment.
Highland Gold's Kekura and Klen project are now part of the Chukotka Advanced Spacial Economic Zone, which covers 19 geographical areas in the Russian Far East. Highland Gold's Valunisty mine was already in the zone.
The projects will be subject to either zero or reduced income tax, precious metals royalties, land rental, land tax, and property tax over the first five to ten years of operations.
They will also, Highland Gold continued, pay a unified social tax on payroll of 7.6% versus the normal 30%.
Chief Executive Denis Alexandrov said: "Highland Gold would like to put on record its thanks to the Russian federal government and the Chukotka regional administration for their support of Kekura and Klen, which will bring substantial jobs and tax revenue to Chukotka over the full life of the projects.
"In addition to the ASEZ, the government is building a power line to Kekura as well as a year-round road not far from this remote site. This level of support confirms Chukotka's beneficial investment climate and Kekura's importance to the development of the region."
Kekura is Highland Gold's flagship development project, and the company hopes to start producing there by 2023, producing an average of 172,000 ounces of gold a year initially. In 2018, Highland Gold produced 269,500 ounces, so Kekura will represent a significant increase.
In 2019, the firm expects 290,000 ounces to 300,000 ounces of gold. Current producing mines include Mnogovershinnoye, Novoshirokinskoye, and Belaya Gora, all in Russia.
Shares were up 1.8% on Wednesday morning in London at 203.02 pence each.