Carube Copper Corp. - Copper and Gold Assests: Jamaica and British Columbia

Mining in Jamaica

The mining industry is well developed in Jamaica due to a thriving bauxite industry and along with tourism is one of the two largest contributors to the Jamaican tax base. In 1971, six companies began bauxite mining in Jamaica and today, bauxite mining together with alumina refining, combine to drive the island’s economy. All potential infrastructure, environmental and social issues related to mining have been identified and addressed by the bauxite industry in concert with the government. Mining regulations are well developed, reasonable and are updated in a systematic fashion. The government has a history of consulting the mining industry before implementing changes. A relatively small but expert legal community that specializes in mining laws and regulations is present. A strong history of Canadian based expertise in the industry is based on over four decades of work in Jamaica by the Canadian International Development Agency (CIDA) and the Geological Survey of Canada (GSC).

An electrical power industry is present in Jamaica and services some of the substantial power requirements of the alumina industry. Local infrastructure close to the Bellas Gate and Browns Hall licenses includes power supply from the Jamaica Public Service (JPS). Local rail connections are available to the deep water container port at Kingston and to the bulk handling port facility at Port Esquival, 30 kilometres from Bellas Gate. Narrow, but paved roads link the coastal area with the interior mountains. Skilled and unskilled labor is abundant in Jamaica. English is the national language and the legal system is based on British parliamentary democracy and English common law.

Import-Export rules are not burdensome as the administration is accustomed to the bauxite mining companies importing an abundance of equipment. All forms of heavy equipment are readily available, except for modern core drilling rigs. When required, the importation of drilling equipment is relatively simple and expedient. The corporate income tax rate for large companies is 30% and new mining operations can negotiate a tax holiday to accelerate payback schedules. A general consumption tax (GCT) is a value added tax and the standard rate is 16.5%. Payroll taxes contributed by the employer equal 12.25%.

Mining in Jamaica falls under the authority of the Ministry of Science, Technology, Energy and Mines (MSTEM). The National Environmental Planning Agency (NEPA) has established requirements to bring new development including mining operations into existence. Regulations would require an Environmental Impact Study as part of any mining license application. In 1996, AusJam, a private Australian company, permitted a small open pit gold mine-cyanide mill complex to the west of the Bellas Gate area, known as the Pennants operation. Pennants is an epithermal vein deposit discovered by BHP utilizing the CIDA database and was subsequently sold. The Environmental Impact Assessment for the operations was written by Golder Associates and noted that there were no critical risks to flora or fauna in that portion of the Central Inlier.

Special Exclusive Prospecting Licenses (SEPLs) are granted for mineral exploration and development activities. This includes but is not limited to, drilling, geophysical and geochemical surveys, water rights, and access roads. Surface access notification to local land owners with compensation for disturbance is set forth in the SEPL rules. No Environmental Impact Study (EIS) is required for exploration or development activities; however archeological sites, including old mining sites must get approval before disturbance or removal. An SEPL costs $JM600 per km2 for the application and $JM 400per km2 each year thereafter. Minimum expenditures are approximately $JM5000 per square kilometre per year. Upon completion of exploration, a mining lease costing approximately $JM1200 per km2 is granted. The renewal cost for a lease is $JM600 per km2per year for 25 years.

SEPLs are located by reference to a post or beacon usually set at convenient map coordinates by GPS devices. Boundaries are located from map coordinates by GPS devices or topographical maps. Licenses require twice-annual prospecting reports to be filed Metallic minerals in Jamaica are subject to a royalty of 5% of the commercial value of the metal produced.

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