Bonasika bauxite entity gets two-year extension to build proposed mine

Government has granted Canadian firm First Bauxite Corporation a two-year extension to begin construction of its proposed bauxite mine at Bonasika.
Stabroek News had reported recently that difficulties in finding financing had stymied the start of construction of the Bonasika mine and the company had asked for more time. Prior to the extension, the company had up to the end of January next year to begin construction having received two extensions. The project is one of several that have stalled due to difficulties in finding financing.
In a recent statement, the company announced that the Government of Guyana (GoG) has granted a two-year extension to the construction commencement date under the Bonasika Mining Licence from January 31, 2016 to January 31, 2018. In addition, government may grant a further one-year extension to January 31, 2019 if it is satisfied after a review of the performance and financial standing of the company that such an extension has merit.
The statement said that First Bauxite will now discuss with the GoG specific modifications that are required to the Mineral Agreement, the Mining Licence and Environmental Permit to reflect the new project scope.
It said that as part of the discussions with the GoG on the mining licence extension, the company has agreed to allocate some of the proceeds from a US$15 million private placement to initial design, permitting and infrastructure construction activities in Guyana during 2016. It is expected that the activities will focus on preliminary detailed design and engineering, the construction of wharves on either side of the Demerara River and on initial mine development.
The company disclosed that it is also using a portion of the proceeds from the private placement to undertake a bulk sample pit programme to confirm mining and processing assumptions in the project’s feasibility study and to produce commercial volumes of ceramic proppants in a full scale ceramic proppant production facility.
The company also intends to conduct field trials in select deep oil wells, the statement said. It added that mining the bulk sample has commenced and planning work for trial ceramic proppant production is well underway.
According to the company, independent testwork has been conducted by recognised oil and gas industry proppant testing laboratories on upscale samples of First Bauxite’s ceramic proppants. It said that the tests have confirmed the favourable results reported in the feasibility study that, compared to the market leading high strength proppant and ultra high strength proppant products, First Bauxite’s products have superior strength, superior conductivity and specific gravity, and comparable sphericity and roundness.
In its latest interim financial statement, First Bauxite had said that it does not currently have revenue generating properties and has incurred a loss of US$7.1 million for the nine months ended June 30, 2015. As of that date, the company had an accumulated deficit of US$56.7 million.
In 2013, then minister of finance Ashni Singh had announced that First Bauxite was slated to start construction of a US$120 million calcined operation in late 2013 at Bonasika. However, that has not happened as the company faced financing issues.

Around the Web