Well, political decision are never based on logic or reason. It all about expediency. This windfall tax could have easily killed the golden goose before it even lay a single golden egg!

I try to run the scenario based on what is reported so far, i.e., the 70% windfall tax is only levied on gold price above the contracted threshold price, say $850 and gold price is now $950. Even with the windfall tax being income tax deductible for that $100 "overage" you are still looking at a net windfall tax bite of $42 (assuming the composite income tax rate is 40% [$70 - ($70 x 40%)] = $42. The 40% tax rate is just a number selected for illustration only. It is loosely based on the Canadian corporate composite tax rate.

I don't know what the a typical mining company's net income per oz. figure is, but this is $42 number sure looks high to me. Would anyone have such a statistic?