Guyana Goldfields pours first gold bar

After a huge investment here dating back to 1996, Guyana Goldfields Inc (GGI) has poured its first gold bar.

A statement today from the company said that its first gold production at its Aurora gold mine in Region Seven was attained through the gravity and saprolite production circuits which allowed for earlier gold production (pre-commercial production) through the processing plant.

 

The Canada-based gold miner said that initial start-up gold was captured by processing the lowest grade ore available and GGI is now working towards full saprolite circuit operation and will gradually feed the mill with higher grade material. It added that the commissioning and startup of the hard rock crushing circuit is expected to be completed later in the third calendar quarter of 2015.

 

The Company says it expects to produce between 30,000 ounces to 50,000 ounces of gold in 2015, depending on how quickly full ramp-up is achieved, and around 120,000 ounces to 140,000 ounces of gold in 2016. The output of this company and Australian miner, Troy Resources is expected to redress slumping gold production by small miners in recent years.

 

GGI says it expects to issue an updated National Instrument (NI) 43-101 Technical Report Feasibility Study in the first quarter of 2016 for the Project which will reflect an extended open pit mining scenario while delaying the planned underground production until later in the mine life.

 

GGI says it is sufficiently funded to complete construction of the Aurora Gold Mine.

“As of June 30, 2015, the Company had approximately US$20 million of capital expenditures remaining to complete the Aurora Gold Mine. The Company is managing its overall development budget to not exceed US$277 million which includes the initial development costs of US$249 million for the Project and US$28 million in financing costs, pre-operating costs and working capital investment. The Project remains to be tracking on budget with an untouched US$52 million overrun facility available, if needed”, the statement said.

 

GGI expects to report its interim consolidated financial statement results for the second quarter ended June 30, 2015 on or around August 13, 2015.

Scott A. Caldwell, President and CEO, was quoted as saying: “Our first gold pour is an extraordinary achievement in GGI’s transition from an exploration and development company to a high grade, low cost gold producer. We would like to celebrate this significant accomplishment for all that have contributed from the Project’s inception and thank our shareholders and stakeholders in supporting the development of the Project, including our Board of Directors, management team, employees and contractors as well as the lenders for the debt financing syndicate comprised of International Finance Corporation, Export Development Canada, ING Capital LLC, Caterpillar Financial Services Corporation, and The Bank of Nova Scotia. In addition, we wish to thank the Government of Guyana and local communities for their continued support through the development of the Project. The focus at the site now is to increase gold production to our target level of 50,000 ounces during the balance of this year.”

A section of the GGI mining concession
A section of the GGI mining concession

GGI will be the first medium-scale miner to begin producing gold in the aftermath of Omai Gold Mines Limited in 1993. It will come at a time when gold output from local small and medium-scale miners has been falling due to lower international prices for the metal and other issues.

Guyana Goldfields is a Canada-based mineral exploration company which is focusing on the exploration and development of gold deposits in Guyana. The company has been operating in Guyana since 1996.

According to the plan for its Aurora Gold Project, the mine is designed to produce 3.29 million ounces of gold, averaging 194,000 ounces per year, over an initial 17-year mine life.

The company is the second that will begin gold production this year. Australian mining firm Troy Resources Limited is accelerating preparations to start producing and selling gold from its large-scale Karouni Gold Project in Region Seven by July.

For the past few years, gold has been a mainstay of Guyana’s economy and the precious mineral is the largest earner of foreign exchange but declarations from small and medium-scale producers are on the decline after some miners, confronted with a variety of factors including a drop in gold prices, exited the sector.

On October 5, 2011 GGI had announced that it had clinched a Memorandum of Understanding with the government for the Aurora Gold Project which sets mining royalties and paved the way for a mining licence.

The MOU had set out the key terms of the Mineral Agreement, also known as a Fiscal or Stability Agreement.

It said that significant among the terms of the MOU are:

-Mining royalty of 5% on gold sales at a price of gold of US $1,000/oz or less

-Mining royalty of 8% on gold sales at a price of gold over US $1,000/oz

-Corporate income tax rate of 30%