Financial or Technical Assistance Agreement (FTAA)
The Didipio Mine is governed by the terms of a Financial or Technical Assistance Agreement (FTAA) with the Philippine Government and is operated in accordance with all applicable Philippine laws, rules, regulations and requirements. In addition, OceanaGold’s operations are conducted in accordance with the company’s corporate policies.
The FTAA gives OceanaGold the right and responsibility to explore, develop and operate in the Didipio area, but does not award the company ownership of any mineral resources.
Under the terms of the FTAA, Didipio’s net revenue (as defined in the FTAA) is shared with the Philippine Government. The Government’s share, which includes all taxes and royalties paid, is 60% and OceanaGold is entitled to 40%. In addition, the FTAA includes a defined five-year recovery period during which time OceanaGold is allowed to recoup the capital investment made to develop and construct the mine. During the recovery period and on an ongoing basis, OceanaGold pays taxes, royalties and other fees.
In addition, OceanaGold invests in the Philippines, directly and indirectly supporting jobs and economic activity. For example, in 2017 the Didipio Mine contributed PhP7.32 billion ($US147.5 million) in taxes, salaries, local, regional and national procurement and community investment. The economic participation of our employees within their local and regional communities also creates flow on impacts, raising household incomes and stimulating additional economic growth.
Additional data about our payments and contributions is available in the 2017 Sustainability Report.
The FTAA with the Philippine Government commenced in June 1994 with an initial area of approximately 37,000 hectares in the provinces of Quirino and Nueva Vizcaya.
As required under Philippine Mining Law, OceanaGold has progressively relinquished areas (including the Capisaan Cave) since 1994. The FTAA area is now 11,489 hectares.
Of the11,489 hectares, the approved area approved for mining activity under Didipio’s Environmental Compliance Certificate is 975 hectares, of which we are currently utilizing 333 hectares for mining and associated infrastructure. OceanaGold obtained all the relevant permits prior to the construction of the mine.
The Province of Nueva Vizcaya supported the construction and development of the Didipio Mine when its legislative body (the Sangguniang Panlalawigan) favourably endorsed the Didipio Project in 2005 as required under the Environmental Compliance Certificate.