G Mining gets Brazilian tax cut for gold mine

[Redator]

Authorities in Brazil have granted G Mining Ventures’ (TSX: GMIN) main Tocantinzinho mine a reduced tax rate, a move that the Canadian miner says will “materially enhance” profit and cash flow.

Starting this year, the nominal corporate income tax rate applicable to Tocantinzinho will drop to about 15.3% from 34%, Quebec-based G Mining said late Thursday. The measure will be renewable after the end of the initial 10-year term.

“The update speaks positively to Brazil’s supportive taxation regime which incentivizes industrial development in remote areas,” National Bank Financial mining analyst Rabi Nizami said Friday in a note. Tocantinzinho “is emblematic of a successful project incentivized and built under this system.”

Located in northern Brazil’s Para state, Tocantinzinho began commercial production in September 2024 and now ranks among the country’s largest gold mines. Proven and probable reserves amount to about 51.1 million tonnes grading 1.24 grams gold per tonne for contained metal of about 2 million oz., according to a December 2024 estimate. The mine sits about 1,150 km southwest of state capital Belem.

Feasibility study

A 2021 feasibility study assigned Tocantinzinho – which is nicknamed TZ – an after-tax net asset value of $1 billion and an internal rate of return of 34%. It estimated all-in sustaining costs of $681 an oz. and calculated a payback period of 2.3 years. The mine is engineered to produce about 174,400 oz. a year over its 10.5-year life.

Tocantinzinho’s deposit is open at depth, and the company’s 996-sq.-km land package offers additional exploration potential that could yield satellite mineralized bodies. The site has direct access – via 103 km of all-weather roads – to the national highway that links Belem to the industries of southern Brazil.

The tax break is being awarded to G Mining under a regional program that’s designed to support investment, job creation and sustainable development within the Amazon region.

G Mining paid about $59 million in income taxes during the first half of 2025 for a consolidated tax rate of 45%. It didn’t break out the amount pertaining to Tocantinzinho.

Robust economics

“The approval of this tax incentive further strengthens TZ’s already robust economics and affirms the value of our investment in the Amazon region,” G Mining CEO Louis-Pierre Gignac said in the statement. “By lowering our effective tax rate, we expand margins and increase free cash flow – reinforcing TZ’s role as the engine that funds our disciplined growth pipeline.”

Any future growth investments at the open-pit mine would probably extend its eligibility to the tax incentive beyond 10 years, Nizami said. The program should also be applicable to Gurupi, another Brazilian project that G Mining is studying, he added.

G Mining acquired Tocantinzinho for about $115 million in 2021. More than 1,000 company employees and contractors work at the site. 

Shares of G Mining rose 1.2% to C$28.76 Friday morning in Toronto, boosting the company’s market value to about C$6.5 billion ($4.6 billion). The stock has traded between C$8.92 and C$28.54 in the past year.