On September 4, the Argentinian Executive Branch issued Executive Order No. 793/2018 establishing an export tax of 12% over all goods exported from Argentina, applicable from September 4, 2018, to December 31, 2020. The tax is capped at AR$4 per U.S. dollar for bullion and unrefined gold, and at AR$3 per U.S. dollar for unrefined silver and zinc, copper and precious metal ores, and their concentrates. This action was part of a larger plan that included other austerity measures and invoking an International Monetary Fund assistance loan.

Yamana Gold said its subsidiaries Minas Argentinas S.A. and Estelar Resources Ltd. S.A. would challenge the constitutionality of the export tax by filing an action for the protection of constitutional rights pursuant to Article 43 of the Argentine Constitution, and an application for an injunction for the Argentine government to refrain from collecting this tax.

The Argentina Constitution prohibits the executive branch from creating taxes, according to Yamana, and establishes that it can only exercise the legislative authority expressly delegated by the Federal Congress. Yamana owns the Gualcamayo and Cerro Moro mines in Argentina and said it believes the export tax is unconstitutional.

Gualcamayo and Cerro Moro are entitled to tax stability pursuant to Argentina’s Mining Investments Law No. 24,196, the company said. “This tax stability entitles Yamana’s subsidiaries to recover taxes in excess of their overall tax burden at the time of the filing of their feasibility studies, in 2007 for Gualcamayo and 2012 for Cerro Moro, Yamana Gold added.