After a series of setbacks, Troy Resources Limited is aiming to return to gold mining and production at its Smarts Underground Site in the fourth quarter of 2023 and the company is currently in the preparatory phase of its resumption timeline.
The Australian mining company is also currently revising its business model and at this time is looking at an immediate capital investment of US$10 Million for its operations at Karouni in Region Seven.
“We have given ourselves an aggressive timeline for 2023. By this time next year, we anticipate to be back in production. There are a range of defining aspects required to align with this road map, one being underpinned by financial capability and capacity amongst others which we need to set in place to move forward,” Country Manager, Sven Tegeler, said in an interview with Stabroek News.
Tegeler, who has been in the position for the last ten months, said they have been in preparatory mode at different levels across the entire business. On the operations front, a proactive approach has been taken to ensure all equipment and machinery are in working condition and in a state of readiness for operational commencement.
He stated that under the leadership of new Opera-tions Manager, Michael Rodrigues, they are working to install high level improvements around the plant and operations. From the corporate side of the business, re-capitalisation is complete but work is ongoing to acquire other financial instruments. Tegeler said that they are seeking a capital investment of US$10M. Also, there is a collaborative project with several agencies to return Troy Resources to the Australian Securities Exchange (ASX), Tegeler said.
“We are working through any optimization within the plant to be ready for the operations and then financially structuring ourselves to facilitate all this. But like I said, there are phases, and we see this as phase one, to rebuild the company financially so it’s strong enough to move forward into production, and essentially, relist and emerge,” the country manager detailed. It has been almost a year since the company voluntarily suspended trading its stock on the ASX and entered into mining care and maintenance.
At the time of the suspension, Company Secre-tary, Rebecca Broughton, in a notice to shareholders announced that the company had requested an extension of that suspension. She explained that the voluntary request was necessary for the completion of the company’s recapitalisation.
“Troy anticipates that the voluntary suspension will be lifted on 14 April 2022 or when its full form prospectus is released,” she stated in a correspondence to shareholders that was seen by Stabroek News. However, by April they were unable to return to the eschange.
Troy Resources’ last reported production figure of 2,653 ounces of gold was in February 2021 up from 2,113 ounces in January 2021, putting production for the first two months of the year at 4,766 ounces compared to 4,195 ounces for the last quarter of 2020. By contrast, and prior to encountering major difficulties, Troy Resources produced 58,118 ounces of gold in 2018 and 70,207 ounces [2017].
Troy Resources had commenced operations in 2015 and encountered major difficulties in Octo-ber, 2019 after a geologist, Ryan Taylor died after a cave he was working in collapsed. The then government caused the mine to be closed for an investigation to be done and hundreds of workers had to be laid off. At September that year Troy had had 450 employees. When mining resumed eventually, the operations were affected by the COVID-19 pandemic.
Capital investment
With a timeline in place to return to production, the company has been working to raise capital through international markets and several investors have already given a positive response. Tegeler said that they are also looking at ways in which they can manage their finance through income generating options.
“So we are looking at areas outside of just putting all our eggs in one basket. So we are looking at diversifying through multiple scenarios, whether its gold trading with multiple surrounding other businesses,” he explained. He stated that they have been in discussion with a few businesses to offer their services. Through this venture, they will possibly process the ore of mining companies close by.
Reviewing the company’s goals and timelines, Tegeler said that in this quarter of 2022, they are working on critical equipment. “Within the last few weeks and months we have been looking at equipment, whether it’s through local procurement or international importing, but the majority has been local. And that’s not just through equipment, but that’s also through the local service companies. There is a greater amount of opportunity here for us to utilize local rather than international ones, there’s a cost benefit to support the country as a whole,” he stated.
Between the first and third quarters of 2023, the company will be focused on raising capital and contractor mobilization. “So, because there’ll be that period of q1, q2 to q1 for 2023 our contract mobilization, we are looking at an external contractor and the only reason behind that is the actual capacity within the country. Not everyone knows how to underground (mine) if so, we’ve already spoken, we’re in discussions with the ministries around that,” the country manager underscored.
Smarts Underground
Troy Resources says it intends to re-commence operations in the Smarts underground mine. All of the company’s permits have been approved for the project. In the lead up to the production phase, Tegeler said they will have to conduct their environmental and social impact assessment. He stated that they have delayed this process as they are not returning to production immediately. However, he insists that it will be done as the time for production draws near. This phase of the operation was initially scheduled for July-October 2022. Due to the financial status of the company, coupled with the pandemic, they were forced to adjust the timeline.
According to Tegeler, they will be using a basic design for their tunnels and portals and will place special focus on underground water management. “We will do the port on decline, basic design and construct it by blasting undistributed rock about five to 10 meters; you keep doing that, then you put a support structure,” he added. He stated that they will have to put systems in place to manage sub surface and surface water management. He stated that they will have to install submersible pumps and pressure pumps to ensure they will be able to safely blast during production.
The company has already identified the area where they will define the portal for ventilation for airflow. This is necessary for workers to access airflow while working in the underground mines. “The ventilation portal has to be a certain level certain distance away from things around about five to 10 meters”, he explained.
Ore recovery
The country manager said that they expect to recover some 3,000 ounces of gold from extracted ore during the preparation stage of the mines over time. He went on to explain that they intend to expand on the amount of ounces of gold they can recover. The current reserves are estimated at 125,000 ounces with access to 89,000 ounces. They will reanalyze previous studies to see where alterations can be made to extract higher amounts of gold.
“What we will be doing is trying to expand what we have now to get a greater amount of ounces… I guess it’s really important to understand as well, when we go underground we will still also be doing NPT drilling exploration to build that reserve,” he stated.
The country manager added that they are currently in discussions with Canadian, Peruvian and Argentinian companies to work in the development of the underground mining.
“These countries do have companies that have that specialization in underground mining. It is what we do as a business, attach that to the team. And part of their caveats and their requirements as a contracting company will be up-skilling local individuals,” he stated. He added that they value local content and have been ensuring that is a condition their contractors adopt. Since being in operation for the past seven years, he stated that they had a minimum of 85% local content within the operations.
“At the moment, the model that we’re working on offering is to actually cross pollinate individuals that are still in the business now into areas where they’ve got interest in. All that they need to do is learn what they want or what they’re required to work in that area,” he said as he spoke of the opportunity for growth in the company. “We want to make sure people understand the whole business, not just one area… so we get to the point we got someone’s who’s left and yeah, there’s no succession plan,” he stated.
In October 2020, Troy had announced that it had ‘struck gold’ with a bonanza discovery of a vein at its Smarts underground mining project at its Karouni mining site in Region Seven, showing 131.93 grams of gold per tonne of ore (g/t Au). Troy had been aiming for a seamless transition from its open-mine operations to underground mining but with the COVID-19 pandemic, it was forced to push back timelines and work plans. The company had already received the necessary permits to commence infrastructural works and was working closely with the Guyana Geology and Mines Commission [GGMC] and other government departments to formulate mining regulations for underground mining operations in Guyana.
“The current preferred mine plan involves bulk mining of the deposit to maximize gold production. A two-stage development approach is currently preferred to minimise capital expenditure requirements. This will see initial development of a relatively short drive of approximately 800 metres to the first ore zone of approximately 30,000 ounces, revenue from the sale of which will be used to fund further development,” the company had disclosed.
According to the country manager, the restart of operations will be in conjunction with the Smarts underground mining and recovering from the Hicks open mining pit. “… Ideally, we will mine both areas at once, start retrieving ore from both areas … but our focus is to go underground. Underground is going higher grade… ” he pointed out.
Tegeler said that the magnitude of the investment provides an indication that Troy Resources is here to stay. He pointed out that even if the company has not been producing gold, it remains committed to helping communities in its environs of operations. He stated that their medical centre remains open to the public with 20 to 40 persons visiting to seek medical attention some days.
“A lot of them are illegal miners, but we’re humans, we’re proud of our responsibility. We’re not going to turn people away. We’ve dealt with people with compressed fractures to their spine. We’ve had less serious cases but we’ve even, when we couldn’t get them airlifted, drive them out. So we extend that olive branch, as one would say, to the community to make sure they have access to medical treatment,” he said while indicating the company single-handedly absorbed all the costs.
To advance its preparation for resumption of production, a few additional staff were hired and the number of employees ranges between 35 and 50 persons. Tegeler is the only expatriate in Troy Resources’ employ.
“We have kept all our critical staff that we believe will assist us in moving forward and the models that we are generating to go forward. We have employed some ex-employees to strengthen that vision and strategy going forward to help team,” he related.
