Guyana Goldfields invested US$150m before finding an ounce of gold

Dear Editor,

It seems the political backlash of a terrible contract with Exxon is now spreading its ugly head on one of Guyana’s best managed, most accountable and transparent companies that provides more revenue to the country than sugar and indeed is the largest contributor to the Government of Guyana in terms of employment, taxes paid (corporate and payroll etc) and duties.  This is independent of the huge investment made by the company for over 10 years before finding an ounce of gold.  This represents a sunk investment of over US$150 million or G$30 billion. Within this time frame, over 30 exploration companies have been registered in Guyana, expended millions of US dollars seeking commercial deposits of resources, found nothing and left the country.  That is the risk a company assumes in the search for natural resources.

I can understand the frustration with the Exxon deal, but what are we really doing?

Surely, our artisanal or small miners need a better concession package.  This was recently done by the Government of Guyana.

But let’s put everything in context.

The Mineral Agreement which governs concessions, investments, royalties, employment, environmental safeguards and duties etc. of Guyana Goldfields, was signed by President Bharrat Jagdeo in 2011.  At the time, it was considered very harsh as the maximum royalty of 8% was higher than in Suriname and other mining jurisdictions.

Guyana Goldfields is a listed company.  The US$150 million to invest in Guyana over a barren 10-year period was funded through the stock exchange and private capital.  After gold was found in the vastness of the Cuyuni area, where transportation and logistics cost are very high and safety issues are dominant, Guyana Goldfields had to find more investors to build the mine and had to bring in overseas firms because the skills and technology did not exist in Guyana even though there has been mining for over 100 years in Guyana.  To build the mine, significant amounts of equipment had to be imported as well as over 800 individuals with the appropriate large scale mining skills.  Also, significant environmental equipment and technology had to be applied to prevent another Omai spill.

The end result was that without the concessions granted by the government, the mine would not have been feasible and there would have been the loss of over 800 jobs and revenues to the government through taxes, the multiplier effect of procurement from local companies, among other revenue streams such as the taxes of employees, NIS payment etc.

Guyana Goldfields has the best CSR Programme in Guyana by far. Its presence in Guyana has made Guyana an investment destination and has helped thousands of families to earn a livelihood in a time of severe job needs.  On the other hand sugar has received billions of dollars from the Government with no returns over the last decade.  Yet no one speaks to this but instead tries to attack Guyana’s leading company because of sour grapes with Exxon.

Yours faithfully,

C. Allen

Employee, Guyana Goldfields

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