Guyana Goldfields bullish on US$120m underground mine

-has paid US$26.5m in royalties

Staff of Guyana Goldfields Inc pose with Chief Executive Officer Scott Caldwell (left) and Country Manager Violet Jean-Baptiste (fifth from left) at the Marriott Hotel.

Guyana Goldfields Inc (GGI)  is forging ahead with preparations for a US$120M underground mining project and since the Canadian miner poured its first gold bar here in 2015 it has paid US$26.5m in royalties to the state.

“We are working on that (underground mining) study right now and will publish it at the end of the month. Previous (assessments)  would have been four years from now; 2022 to start. I believe this is going to show us starting sooner than 2022,” Chief Executive Officer of GGI, Scott Caldwell, said yesterday at a media brunch the company held at the Marriott Hotel.

Further, he added, “We are working on the numbers right now but it would be sooner than 2022. I just don’t know the year as yet but it would be sooner than 2022. In less than a month we will know… the risk analysis was done and now is just a matter of when we start and we will know the answer to that in about a month.”

The head of the Canadian gold mining company said that GGI envisions itself as being the “premier underground miner in Guyana and hopefully all of South America” and hopes that the local workforce would be leading the way for others following their training.

The company currently has an open pit gold mining operation here which last year yielded some 160,000 ounces of the precious yellow metal.

And explaining the benefits of having an underground operation, Caldwell said that not only was the process more environmentally friendly but that production yields would also significantly increase.

Caldwell said that another key objective of the company is its having a sound local content policy and that while the more modern form of mining will be new to locals, one of the reasons for the mulling of an earlier start date was to maximise training for local miners.

“Our future is going to be an underground mine here. We have not yet begun work on it but a fesibility study, it should be finished by the end of the month and released and, will determine when we begin our work It will be out there and tell what we plan doing with the underground mine and the timing of it. We were thinking last year of starting out underground in the next four years. We are thinking a bit sooner, move it forward by a couple of years. Gives us more time to train, get our work force up to speed and do that underground mining,” he explained.

“Underground mining is a lot different than open pit mining and there is not much experience in underground mining in Guyana as yet. So we need to get the workforce up to (speed) on that. Start with some ex pat trainers and work upwards… Underground mining is very efficient, very safe, I have worked underground before, Tom [Tom Henderson, General Manager of GGI] has …so it is not like it can’t be done it can be done…It takes a while because you have to be safe and efficient but it can be done and I know our work force can transition to underground. When we start mining underground it would be training, training at a leisurely rate; in other words, train and train slowly as we work our productivity up,” he added, while noting that himself and Henderson have trained locals in many countries who in turn took over those operations .

But even as it prepares to transition to underground mining, measures continue to be put in place to maximise yield from the open pit operations with the company recently purchasing a new US$20M mill.

“We are expanding the mill, it will improve our recovery. The recovery should go up by one or two points,” Caldwell said.

 

Women working heavy equipment

The company has also started a pilot programme that would see 18 women from surrounding villages- Caria Caria, Troolie Island and St Cuthbert’s Mission- being trained to work heavy equipment as it hopes to attract more females to the traditionally male-dominated workforce.

“The goal would be to have the same demographic. There is no set number but as many as possible. Being away from your family is tough, so no set number. As many as we can., Caldwell said as he pointed out that research has found that females, when compared to males, take better care of equipment.

Coordinator of the programme, Denise Jean-Baptiste said that the programme also tackles the social aspect, given that the women would have to be away from their families for long periods, and as such GGI has brought in councillors to work in the villages. The councillors, Jean-Baptiste explained, would meet with residents in the communities and discuss areas of concerns and coping with changes.

“It is not just that we are attracting women but there are a lot of changes. Compared to the traditional way, it is very different. Usually it is the man that leaves. To have the women leave brings different dynamics. We have councillors working with communities talking with persons about the changes. It is very new, very exciting,” she said.

Based on how the pilot project goes the company would continue its quest to build its female workforce. And while Caldwell says that there is a possibility that there may never be an equal ratio of females to males at the mining site, the company “will just continue working on that”.

GGI said over 700 Guyanese are employed with the company and this constitutes 96% of its total employees. In addition to the US$33.7m paid in wages, the company which operates in the Cuyuni/Mazaruni says that US$136,000 has been spent on training for its Guyanese staff.

Since producing its first gold bar in August 2015 the company informed that it has paid US$26.5m in royalties to the state and purchased US$84.1m in goods and services from local businesses. It says it has also spent US$197,000 on community projects and via donations to Guyanese organisations.

Guyana Goldfields’ investment here dates back to 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.

On October 5, 2011 GGI had announced that it had clinched a Memorandum of Understanding with the government for the Aurora Gold Project which set 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%.

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