The Osun State Government has disclosed that Thor Exploration Limited, the owner of Segilola Resources Operating Limited (SROL), a gold mining site, has agreed to pay the undisputed portion of the tax assessment worth 1.2 billion Naira, covering Pay As You Earn (PAYE) alone.
The update was provided in a statement by Mallam Olawale Rasheed, Spokesperson for State Governor Ademola Adeleke, on Thursday.
Nairametrics previously reported that the government had disclosed on Tuesday that it had secured shareholding certification and a tax exchange agreement with Thor Exploration Limited, following the federal government’s mediation.
This development occurred during a mediation meeting between the governor and representatives from Segilola Resources Operating Limited (SROL), facilitated by the Minister of Solid Minerals Development, Dr. Dele Alake.
Nairametrics had previously reported that the Federal Ministry of Solid Minerals Development had, on October 5, 2024, cautioned the Osun State Government against jeopardizing the Federal Government’s efforts to attract Foreign Direct Investment by closing down a mining site.
Alake was reacting to claims and counterclaims between the Osun State Government and Thor Exploration Limited, the owner of Segilola Resources Operating Limited (SROL), regarding alleged taxation and operational issues.
What you should know
On September 30, 2024, the Osun State Government reportedly sealed the business premises of SROL, insisting that a court had ordered the state to confiscate the company for “flagrant tax violations” and other operational matters.
The state government had charged the company with unethical business practices and tax evasion amounting to about 1.9 million US dollars.
As noted on the company’s website, it operates a gold project located in Osun State, Nigeria.
The Segilola Gold Mine has reportedly completed two full years of production, with a total gold production of 98,006 ounces in 2022 and 84,609 ounces in the 2023 calendar year. It is targeting 95,000-100,000 ounces of gold in the 2024 calendar year.
Alake vowed to address the dispute and restore industrial harmony by setting up a fact-finding team to make the state government understand that mining falls under the exclusive legislative list, and that the Ministry of Solid Minerals should be consulted before any disruptive actions are taken by any state against an investor.
According to the state government, the parties agreed to jointly work together to address four major areas of disagreement raised by the Osun State Government against Thor Exploration Limited, including the resolution of Osun’s shareholding in the Segilola Mining company, tax payments by the firm, environmental degradation, and disputed mining fields, among others.
More Insights
Providing further details on the agreement reached between the Osun Government and Thor Exploration, Rasheed explained that during the mediation, the Special Adviser to the Governor on Solid Minerals, Prof. Lukuman Adekilekun Jimoda, listed the demands of the state, which included:
- Payment of the undisputed PAYE immediately.
- Setting up an independent tax consultant to address other tax components.
- Formal presentation of the environmental report and request to SROL through the Minister.
- Addressing the additional economic interest due to encroachment on 88 cadastral units.
According to the statement, each of the points raised by the state government was discussed, and conclusions were reached between Osun, Thor Exploration, and the Federal Government.
The agreement, as listed by the Osun Government, is as follows:
- The handing over of the share certificate to Osun State.
- Agreement to pay the undisputed portion of the tax assessment of 1.2 billion Naira (on PAYE alone).
- Review of Osun’s claims on the environmental audit, with Osun submitting a comprehensive environmental audit.
- A decision for the Federal Ministry of Solid Minerals to review claims of encroachment on Osun’s 88 cadastral mining units by Segilola and the associated inconclusive partnership.
According to Rasheed, the meeting further resolved many grey areas, including better communication, serving as a liaison office for correspondences on tax assessments/demand notices for companies operating within Segilola premises, and assurances from the Osun Government to support the seamless operation of Segilola, among other positive developments.
He urged residents to disregard what he termed as “sponsored reports from saboteurs,” which claimed that the deal was based on an investigative report by a 12-man committee.
He maintained that Osun is now an official shareholder in Thor Exploration Limited, adding that Thor Exploration is to enjoy a positive operational environment in the state moving forward.
He described the development as a better deal for the Osun Government, as the state will have more funds for development.
Confirming the mediation via his X page on Tuesday, Alake stressed that a cooperative atmosphere fosters industrial harmony and enhances the business climate, ultimately driving revenue growth and attracting foreign direct investment.