Several options are on the table in relation to the Omai mine site with the main one being further underground expansion and in this regard an overseas-based Guyanese has already expressed an interest, Prime Minister Samuel Hinds disclosed yesterday.
He said advertisements will be placed shortly to invite interested persons or companies to look at the data and make a decision as to whether it was worth pursuing.
The Prime Minister, who is also the minister responsible for mining, was speaking at a press conference held at the Guyana Geology and Mines Commission (GGMC) Boardroom yesterday on the Omai closure plan. The relevant parties including the government, the GGMC, the Environmental Protection Agency (EPA) and Omai Gold Mines Limited (OGML)/IAMGOLD had agreed to the plan and this was disclosed last week.
During his remarks, the PM referring to OMGL said, “I don’t think that the operation was in a profit-making situation as far as I am advised.”
The closure plan which had originally contemplated a ‘back to nature’ model with the site being restored to its natural state had been changed at the request of the government to an ‘after use’ model, where existing infrastructure will be left at the site. Commenting on this, Hinds said that since the end of mining operations were approaching in 2005, there were articles in the media calling for a number of things to be done at the Omai site and these calls were taken note of.
He said that among the options being looked at for the site is whether any group is interested in developing a recreational type of resort there. Another is the GGMC developing a “forward base” in the area. However, the option which will be given priority is the underground expansion of the site if interest is expressed in this by investors. If there is none, then the other options will be considered. The Prime Minister said that advertisements will be placed locally and internationally in two to three weeks time for proposals. He said that an overseas-based Guyanese had already approached and indicated his interest.
Meanwhile, it was noted that some of the equipment from the site, including six of eight generating sets which were relocated to Linden, had already been removed as outlined in the original ‘back to nature’ model but a significant portion remained. Hinds said that this was purposely done.
And referring to the aggregate plant he pointed out that were the Linden-Lethem road to be paved it would be economical to move stone from that location.
Asked whether there was a management plan in place to maintain the infrastructure once OMGL leaves the site at the end of September, the Prime Minister said the aim was to have proposals in by mid-August to give the GGMC some time to look at them. “We are aware that we have to do something there but it may depend on the proposals we receive,” he declared.
Human Resources Officer at OMGL, Norman McLean, in brief remarks said that US$253 million was the capital investment in the operation. He said that of the 3.8 million ounces of gold extracted from the operation, two million ounces were sold at a time when the world price was between US$252 to US$300 per ounce. Pointing to the fact that the company had spent 14 years at the site, he said the project was “one hell of a challenge.” Production at the mine had ceased in 2005 and McLean said that there was still gold on the walls of the Fennell pit at this time but it was uneconomical to mine it at the price then.
He expressed the belief that had there been a better price, production would have gone to four million ounces. Since the end of last year the price of gold has risen steadily and topped US$1000 per ounce in March. Gold was over US$900 per ounce in the last week.
The Omai site had been explored by Golden Star Resources Limited led by David Fennell and culminated with Cambior Inc establishing OGML in 1991. The mine was opened on March 11, 1993 by the late president Dr Cheddi Jagan.
The company made international headlines with the rupture of its tailings dam in 1995, which saw the declaration of the Essequibo River as a disaster area. Production ceased in 2005 and the closure plan envisages the completion of all environmental and other activities at the Omai Mine site by the company by the end of September. OGML has given the required notice of its intent to terminate the Mineral Agreement and voluntarily relinquish its mining licence with effect from October this year and at the handing over of the property, slated for October 1, a full and complete certificate of compliance will be issued.
Currently the company is pursuing a prospect at Eagle Mountain and also looking at other prospects.
