Rules and Regulations to Implement Republic Act No. 3089, Otherwise Known as "The Gold Mining Industry Assistance Act of 1961"

1961

CBP CIRCULAR NO. 01-61

RULES AND REGULATIONS TO IMPLEMENT REPUBLIC ACT NO. 3089, OTHERWISE KNOWN AS "THE GOLD MINING INDUSTRY ASSISTANCE ACT OF 1961"

Pursuant to section 12 of Republic Act No. 3089, entitled "AN ACT TO PROVIDE FOR ASSISTANCE TO THE GOLD MINING INDUSTRY", the following rules and regulations are hereby promulgated to implement the provisions of said law and for the guidance of all concerned:

1. Board. — The Board created to implement Republic Act No. 3089, shall be called and addressed as the Gold Mining Industry Assistance Board.

2. Classification of Mines. — The classification of gold-producing mines as marginal or over-marginal shall be determined every semester by the Board, upon recommendation of the Technical Committee created by it. The first semester of each year shall be from January 1st to June 30th, and the second semester shall be from July 1st to December 31st. The classification of a mine for any particular semester shall be based on its operations during the previous semester. LLjur

If a mine's classification in a succeeding semester is not immediately determined, it shall continue to receive assistance under the classification in the previous semester provided that this assistance shall subsequently be adjusted in accordance with the classification in the succeeding semester.

3. Total Remaining Capital Investment. — For purposes of the classification of mines, the total remaining capital investment shall mean the difference between the total capital investment and the sum of the depletion, depreciation and amortization reserves as determined by the Board in accordance with general standard procedure.

4. Gross Receipts. — If the gold production for a particular semester has not all been sold during that semester, the "gross receipt" of mine for that semester shall mean the actual receipts from gold already sold plus the value of the unsold gold computed at either P155.00 or P170.00 per ounce, depending on whether the classification of the mine for the period during which the gold is produced, is over-marginal or marginal respectively.

5. Retarded Sales. — Gold which is sold after the semester when it was produced shall be paid in accordance with the classification of the mine producing it for the period when the gold was produced.

6. Ore Reserves. — The ore reserve of a mine shall include all ore which should be mined in accordance with the general principles of ore conservation and good mining practice. The cut-off value in computing the ore reserve of each mine shall be determined every semester by the Board, upon recommendation of the Technical Committee, taking into account mining and milling costs, the average value of the entire ore reserve, and other pertinent factors.

7. Depletion and/or Amortization. — The formula for depletion is as follows: LLjur

The depletion charge for a semester shall be obtained by dividing the sum of:

(a) The total remaining mine property investment at the beginning of the period and

(b) Capital development expenditures during the period; by the sum of the

(c) Actual tonnage milled during the same period and

(d) The ore revenue at the end of the period multiplied all over by:

(e) The actual tonnage milled during the period.

Example:

 [(a) + (b)] x (c)

 ––––––––––––

 [(c) + (d)]

Mine Property, Mine Development and Rehabilitation
as of January 1, 1955		P3,260,420.50
Less:	Accumulated Depletion Reserve Fund as of
	January 1, 1955		1,320,640.20
			——————
(a)	Depleted total remaining property investment		P1,939,780.30
Plus:
(b)	Capital Development for period from January
	1, 1955 to June 30, 1955		150,490.10
			——————
Remaining Property Investment still undepleted		P2,090,270.40
(c)	Tonnage milled during the period January 1
	to June 30, 1955		420,000 tons
(d)	Ore reserve as of June 30, 1955 including broken
	ore in stope		2,220,632 tons
			——————
Total tonnage against which unremaining property
investment must be charged		2,640,632 tons
Calculation for Depletion Charges:
	[1,939,780.30 + 150,490.10] (420,000)
	————————————	=	P324,631.80
	420,000 + 2,220,632
Depletion charge for period from		P324,631.80
January 1 to June 30, 1955

The following shall constitute the mine property investment which shall be subject to depletion: LLjur

(a) purchase price of the property

(b) capital development (as distinguished from stope development)

(c) mine rehabilitation.

8. Gold mines with By-Products. — If a mine produces gold as its principal product, but it produces other metals or minerals as by-products, only those expenses which are solely attributable to the production of gold shall be considered as its cost of production, for purposes of Republic Act No. 3089; provided, however, that with respect to those expenses which are common to the production of both gold and said by-products, the cost of production of gold shall include only such portion of said expenses as the value of the gold bears to the total value of all metals and/or minerals produced; and provided further, that if the value of such by-product is less than two per cent (2%) of the value of the gold produced, the total cost of production of all products less the aggregate value of such by-products shall be considered as the cost of production of gold.

9. Transportation. — Transportation charges shall include the cost of transportation of bullion or of concentrates containing gold, plus the premiums on any insurance thereon, from the Philippines to a foreign refinery and/or smelter, whether incurred in the Philippines or abroad.

10. Newly Mined Gold. — All gold offered for sale to the Central Bank under the provisions of Republic Act No. 3089 shall be accompanied by a sworn statement by the President or General Manager or any duly authorized officer of the company concerned that gold so offered for sale is "newly mined gold", as defined in the law. Any gold producer who shall sell to the Central Bank gold under the said Act which is not "newly mined" shall be entitled to the assistance provided in said law on such gold.

11. Refined Gold. — For purposes of these regulations, "refined gold" shall mean gold that has been refined or purified to a minimum fineness of .999, and to be certified as to its fineness by an agency which is acceptable to the Central Bank.

12. Manner of Payment. — For bullion to be refined abroad which shall be offered for sale to the Central Bank, the gold producer concerned shall be paid the official price, upon presentation of the certificate of deposit of the gold, issued by the Federal Reserve Bank, for the account of the Central Bank, of the fineness as provided in these regulations. A duplicate original of the corresponding receipt issued by the Central Bank, indicating the number of ounces of gold so sold and paid for, shall be presented to the Board. Upon presentation of this receipt by the gold producer to the Board, the later shall determine the amount of assistance to which the gold producer may be entitled.

For bullion refined locally, the refined gold sold to the Central Bank shall be accompanied by the certificate of the required fineness as herein provided, and the manner of payment of the official price plus assistance to which the seller (gold producer) is entitled shall be in the same manner as outlined above.

13. Quarterly Reports. — All gold producers must regularly submit to the Board, within thirty (30) days from the end of each calendar quarter, reports containing the quarterly or monthly quantity and value of their gold production during the preceding quarter, the tonnage milled, cost of production as defined in said law, amount of direct and estimated indirect taxes paid, information regarding labor turn-over, and such other data and information as may be required by the Board.

All gold producers shall also submit to the Board within the first thirty (30) days of each calendar quarter, a sworn statement of the name, nature of work, educational qualifications, experience, compensation and allowance and other emoluments, and other pertinent data of every foreigner, as well as of every citizen of the Philippines with a college degree, employed by such gold producer. Unless and until such sworn statement is submitted, no assistance shall be granted. LLjur

14. Inspection. — Any member of the Board or any duly authorized representative of the Board, shall have the authority and prerogatives of the Director of Mines and his deputies as to inspection of mines, property and plants, and examination of books of accounts and records of any gold producer receiving assistance whose duty it shall be to give the necessary facilities for such inspection and examination during office hours.

15. Estimated Sale. — Within the first ten (10) days of each calendar quarter, every gold producer shall submit to the Board, through the Technical Committee, an estimate of the quantity of ounces of refined gold that it expects to produce during the quarter.

16. Payment of Bonus Out of Assistance. — Every gold producer shall give a bonus within the thirty (30) days, from the close of every calendar quarter, the total amount of which shall be equivalent to five per cent (5%) of the total assistance it has actually received during that quarter, to be distributed among its employees whose salaries do not exceed P500.00 per month. Seventy-five per cent(75%) of the bonus is to be distributed on per capita basis according to the number of days actually worked. The remaining 25% of the bonus is to be distributed on the basis of basic salary or wages actually received or earned by the employee during the quarter.

Every gold producer shall submit regular quarterly reports to the Board, setting forth the manner by which the said bonus was distributed, the names of the recipients thereof, their designations and salaries, the amount of bonus paid to each one, and such other data as may be required by the Board.

17. Sale through the Blocked Peso. — Sale by a gold producer of a portion of its entire production of newly mined gold to the Central Bank under the provisions of Central Bank Circular No. 73, as amended shall be considered as coming within the purview of section 4 of Republic Act No. 3089, provided the gold producer concerned waives the benefit of the assistance provided in section 5 of the same Act; and provided, further, that with respect to the 5% bonus required to be distributed among the employees of the gold producer concerned under section 5 of Republic Act No. 3089, the gold producer shall set aside for purposes of the said bonus the equivalent of 5% of P65.00 or P50.00, depending upon the classification of the mine, multiplied by the number of ounces sold by the gold producer concerned under the provisions of Central Bank Circular No. 75, as amended.

18. Discrimination against Filipinos. — No gold producer shall be granted assistance under this Act or, if already granted such assistance, shall be granted further assistance thereunder unless it proves to the satisfaction of the Board that it does not discriminate against citizens of the Philippines in employment, promotions, compensation, grant of concession, and other matters, and for that purpose, all producers shall submit to the Board periodically as may be required by the Board a sworn statement of the names, nature of work, educational qualification, experience, compensation and allowances and other emoluments, and other pertinent data of every foreigner, as well as of every citizen of the Philippines with a college degree, employed by such producer: Provided, however, that the mere filing of a complaint for discrimination shall not prevent the Board from granting to a gold producer the assistance provided for in this Act.

19. Penalty Provisions. — All statements, representations, or reports required under this Act shall be under oath, and any person who knowingly makes any false statement, representations or report under oath, shall be liable for perjury under the provisions of the Revised Penal Code.

For the Gold Mining Industry Assistance Board:

(SGD.) ANDRES V. CASTILLO(Actg. Governor, Central Bank of the Philippines)Chairman, Gold Mining Industry Assistance Board