Guyana Goldfields, gov’t finalising mineral pact for US$1B Aurora mine

Canadian company Guyana Goldfields is finalising a mineral agreement with the government as the company moves further along in opening its US$1B mine at Aurora, Cuyuni River.

“Everything is on schedule,” the company’s consultant Eric Phillips told Stabroek News on Wednes-day. He said that the mineral agreement and business plan are being finalised while work is continuing to build a new section of road from Buckhall, on the Essequibo, to the company’s mine. In addition, geological work is being finalised.

All other processes related to the environment and the Guyana Geology and Mines Commission (GGMC) have beencompleted, Phillips noted. The mineral agreement being negotiated with the government covers the fiscal arrangements in terms of how much royalties and taxes the company will have to pay.

Gold prices have risen steadily in the past several years to record highs and the sector here is booming as many miners enter the field. Guyana Goldfields is at the point where it is “transitioning from exploration into the building of a mine” and everything is on track, Phillips said.

The company expects that the feasibility study will be completed in the next quarter while decisions on project financing and development are also expected at the end of the year. The start of detailed engineering, development and construction is also slated to start by year-end.

The Aurora Project by Guyana Goldfields 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. Earlier this year, Claude Lemasson, the President and Chief Operating Officer of the company said that it is looking to produce 250,000 ounces of gold per year in a combination open pit and underground mining and expects that this will increase as further studies are done. He had said that the company is well funded and everything is geared towards starting development and construction by the end of this year.

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.

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 has 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 had 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 had stressed that the project complies with IFC (the private sector arm of the World Bank) 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.

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