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Govt. seeks investors for billion-dollar operation

Jul 24, 2008 News

The National Industrial and Commercial Investments Limited (NICIL), Government of Guyana (GOG), Guyana Geology and Mines Commission (GGMC) as well as the Privatisation Unit (PU) are currently seeking Expressions of Interest from local or Foreign Investors to tap into to a billion-dollar operation in the wake of the Omai pullout in October.
According to estimates by the Omai Gold Operations, there is currently some two million ounces of raw gold valued at US$1.8 billion still to be retrieved from the site roughly 170 kilometers southwest of the capital in the Essequibo.
The government is expected to rake in five per cent of that figure in royalties.
When contacted for a comment yesterday, Executive Director of GGMC, Edward Shields, said that despite the fact that the government was not looking to conduct the operation itself and was seeking investors, it must be seen as a good thing for the country. According to Shields, despite the royalties that will be collected by the government, some 300-plus jobs would be created.
This would increase the spending power of employees who in turn would play a part in stabilizing the economy.
He added that taxes such as PAYE (Pay As You Earn) and NIS will also be paid.
The expressions of interests being sought after are specifically for leasing deposits and other assets in the Mining Licence Area at Omai, Essequibo, for the purpose of developing an underground extension of the mine.
During Omai Gold Mines operation, mining was conducted from two open pits (Fennell and Wenot Pits) and the Alluvial Area.
Mining in Wenot pit was completed in 2002, Fennell pit in October 2004, and the sporadically mined alluvial area in 2005.
Omai Gold Mines Limited (OGML) mined over 3.7 million ounces of gold from the surface mine of the property between 1993 and 2005.
The company has estimated that there may be about two million ounces of gold in a deposit below the main open pit which may be accessed by an underground extension of the surface mine (to be built by investor).
The property is accessible by air, or by road to the East Bank Essequibo, followed by barge or fast shallow-draft boats on the Essequibo River, then by road to the camp and mine sites on the West Bank.
Among the infrastructure in place at the site that may form part of the Lease arrangement includes Mabura and Ya Ya Roads, several landings, a 180-tonne barge for crossing the Essequibo River, the airstrip and Access Road with a 1000-metre long runway, and a Mill Site among others.
Based on the response to this expression of interest, a request for proposals is expected to be finalised, inviting parties to submit their Technical and Financial Proposals.
“We would consider and evaluate whatever proposals we receive but at this time we are looking to OGML/IAMGOLD completing all that is required for reclamation of the system according to the agreements made in the 1980s,” the Prime Minister said, recently.
He added that Government will be looking to the end of September to determine the interests in pursuing the underground extension of the location. 
In the event that the arrangements do not go according to plan, Prime Minister Hinds said continued prospecting and re-evaluation would continue.
Government’s decision to invite other companies stems from a number of public considerations that were tabled for continued pursuit of the location.

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