$165B gold mine for start up this year

– largest ever in Guyana

Construction of the largest ever gold mine in Guyana with total investment pegged at $165 billion (US$826 million) over the life of the project is set to begin in the latter part of this year.

The Aurora Project by Canada-based Guyana Goldfields Inc will be the first underground gold mine in the Guiana Shield. Production is set to begin in 2014 at the location along the banks of the Cuyuni River in Region Seven. “We believe that this will be the largest foreign investment in Guyana in the mining sector,” said Claude Lemasson, the President and Chief Operating Officer of Guyana Goldfields during a presentation at the Pegasus Hotel last evening.

“We believe that the Aurora Project is progressing very well to become  a large world-class gold mine developed and coming online in the next three years in Guyana,”, he added.

Lemasson told the audience which included Prime Minister Samuel Hinds, Guyana Geology and Mines Commissioner William Woolford, other government officials and members of the private sector that the Aurora project has a total resource count of 6.7 million ounces of gold which is expected to grow as further studies are done.

President and Chief Operating Officer of Guyana Goldfields Claude Lemasson (right) and Guyana Geology and Mines Commissioner William Woolford (left) before the presentation at the Pegasus Hotel last evening.

The company is looking to produce 250,000 ounces of gold per year in a combination open pit and underground mining but expects that this will increase as further studies are done.  “We have a very extensive exploration portfolio,” Lemasson said adding that they have received excellent support from the government as well as the International Finance Corporation (IFC) of the World Bank which has a 5.4% stake in the project.

“We’re looking at investing somewhere in the range of $165 billion Guyanese dollars in this country,” he said adding that direct revenues to the government “depending on the price of gold are estimated in the range of $150 billion Guyanese dollars for the future.”  The project will bring tremendous benefits to the country, he said.

Lemasson said that the  company is well funded and everything is geared towards starting development and construction by the end of this year. He said the company is currently working out the mineral agreement with the government. “It is a critical step and it is on the critical path and we would hope that we are able to secure a mineral agreement with the government in the near future and that would then allow us to move forward and finish our technical studies and also do some other project financing,” he stated.

The company president said the IFC has been providing technical assistance with the Environmental and Social Impact Assessment and has partially financed the hydropower study currently ongoing. “They’re talking to us about potential future assistance both with equity and debt so we continue to work closely with the IFC,” he added.

According to the project summary, the development and operation of the mine site will involve construction and operation of the mine site, construction and operation of a hydropower plant on the Cuyuni River, construction of an access road to the mine site, and construction and operation of a wharf at Buck Hall on the Essequibo River.

Ore recovery will consist of a combination of open pit and underground mining and the combined schedule will result in a mine life of approximately 12 years. Power for the process plant operation and ancillary services, according to the summary, will be provided by a run-of-the-river pondage hydropower plant to be constructed on the Cuyuni River, 8km away from the mine site.

“This is not just an open pit mine. It has an open pit component but it has a significant underground component which will be a first in Guyana,” Lemasson commented last evening. “We are amongst monster deposits and we are one of them and we’ll continue to move and move that forward,” he said.

Guyana Goldfields has been operating here since 1996 and has invested $17 billion in exploration from then up to last year. This year $8 billion have been allocated for further exploration and pre-development. The company has 250 employees and contractors on a full-time basis and during development and construction this is expected to peak at around 700 workers, Lemasson said. He added that during operations about 400 to 500 workers will be employed and they expect to maintain a workforce that is 90 to 95% Guyanese. The company will provide training to its employees he said while adding that indirectly over 10,000 will be employed in some fashion as a result of the project.

Lemasson stressed that the project complies with IFC and other international standards and noted the potential use of hydropower. He said they are looking at a 15 megawatt hydropower facility costing between US$75 million to US$100 million with possible financing from the company, the IFC, other development agencies and other private sector partners.

Lemasson said the project could be the first of several. The company owns several other mining properties in Guyana.