Guyana Goldfields pushes back Aurora mine start date

Canadian gold mining company Guyana Goldfields has pushed back the date for the expected start of production at its Aurora mine and also announced several new revisions in its updated feasibility study including a reduction of the cost to build the mine as it scaled back plans.

In a statement yesterday, the company announced that its Aurora Gold project will cost US$205 million to build, less than half an earlier estimate of US$525 million for a mine with a life of 22 years and total production of nearly 4.4 million ounces of gold.

The new mine plan calls for production of 3.29 million ounces of gold overan initial 17-year mine life at an operating cash cost of US$527 an ounce. Average annual gold production over the life of mine is expected to be 194,000 ounces, averaging 231,000 ounces a year over the first 10 years with production peaking at 349,000 ounces in 2020

The company said commercial production is expected to commence in quarter one of 2015.
It had earlier said that commercial production would start in quarter two of 2014. Gold production will be staged, with initial open pit production of 5,000 tonnes per day from the Rory’s Knoll deposit and expanding to 10,000 tonnes per day in early 2018 when underground mining commences.

“The updated feasibility study provides very attractive returns based on a sound execution plan. The project is fully permitted and has the support of the Guyanese government. Our recent senior management hires on the operations side give us the foundation to expand our team as we continue with development and mine construction,” said Patrick Sheridan, the Chief Executive Officer of Guyana Goldfields.

The company said its updated feasibility study (FS) reflects numerous positive changes, in particular, the phased mining and milling approach, reduced footprint of the mine site and facilities, and utilisation of an optimised mobile equipment fleet. “Based on the key findings of the FS, the company will continue to move forward with mine construction and development of the project,” the statement said.

The company said mining operations will commence with open pit production supplying ore to the mill at a rate of 1.75 million tonnes per year or 5,000 tonnes per day, starting with Rory’s Knoll in the first three years where the strip ratio is low. After nine years of operation, open pit mining will be completed at the Rory’s Knoll, Aleck Hill, Walcott Hill and Mad Kiss zones.

The statement said underground mining will commence in early 2018 at the Rory’s Knoll zone as open pit mining operations in this zone would be complete. Rory’s Knoll underground will be mined utilising the open benching and sublevel retreat mining methods via a decline access with truck haulage from a depth of -137 metres down to -1,037 metres, the statement said.

It added that the results from a detailed coupled hydro-geological and geotechnical model support the open benching and sublevel retreat mining method approach. “The study results show underground mining creates minimal surface subsidence and indicate water inflows are manageable.

Concurrent with the commencement of underground mining, the mill capacity will increase to 10,000 tonnes per day with an average rate of 3.5 million tonnes per year over five years. Thereafter, the underground mine will operate at 5,300 tonnes per day for the next nine years,” the statement said.

The company said it will continue to evaluate the integration of additional ounces found below the pit shell at Aleck Hill and at depth at Rory’s Knoll into the ongoing mine plan.

It noted that the project design incorporates all infrastructure requisites of a large-scale mining operation. An access road, linking the project with a port facility at Buckhall on the Essequibo River is already in place. The Buckhall port facility, owned and operated by Guyana Goldfields will be upgraded to permit ocean-going vessels to be docked and will provide facilities for customs clearance, cargo, fuel, and personnel handling during project construction and operations, the statement said.

The company said it is financed to continue development and exploration work. “In order to finance full construction of the project, discussions have been underway with project debt and equity providers. Full ranges of financing options are being explored and decisions will be taken once the financing opportunities have been evaluated,” it said. The company said it has approximately US$33 million in cash and cash equivalent and no debt and there are approximately 95 million shares issued and outstanding

The Aurora Project will be the first underground gold mine in the Guiana Shield. The company had initially 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. It had said that open pit mining is expected to include six pits within a square mile, with bottom depths varying from 70 to 315 metres.

Guyana Goldfields was also examining the feasibility of a hydropower plant but no mention was made of this in yesterday’s press statement. The company has been operating here since 1996.

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