Gold reaches 400,000 ounces, and counting

Dec 15, 2012 News

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–         Rakes in whopping US$700M

By Leonard Gildarie

Gold mining this year has continued its shine for the country’s economy and with two weeks left before 2013, declarations could rack up a bountiful US$700M.
Authorities reported that as of yesterday, declarations broke the 400,000-ounce mark, the first time since 2006 when big producer Omai Gold Mines ceased operations.
It means that gold, buoyed by high world prices, would remain king as the largest export earner for the government coffers this year, all thanks to small and medium scale mining.

Figures from the first six months of 2012 indicated that gold earnings were 46 per cent of total exports, earning US$268M.
Last year, miners were smiling all the way to the bank with declarations at December 31, 2011, topping the 350,000-ounce mark and prices at an all time high as the international bankers took to gold as the best bet.
Officially, only the Guyana Gold Board and a few dealers are permitted to buy gold.
The extractive sector had increasingly become so crucial to Guyana that the Donald Ramotar administration established a new ministry, the Ministry of Natural Resources and the Environment, to oversee what is literally turning out to be a gold mine.
The gold rush had come with casualties for other sectors, like forestry, as workers took their chance in the bush.

2,000-plus excavators
This year alone, more than 2,000 excavators were reportedly sold. Despite the $30M-$40M apiece price tag, the banks were only too happy to lend the money as the returns were flowing back in.
Yesterday, the Ministry which has responsibility for the Guyana Geology and Mines Commission (GGMC), that regulates the extractive sector, made it clear that the performance of gold this year is a “moment to be proud of”.
During a press conference at the Ministry’s boardroom in the Office of the President compound, Minister Robert Persaud, said that the performance was significant especially as gold production dipped to 200,000 ounces after Omai left in 2006. Even at the height of Omai, earnings only managed to reach US$123M.
The production now is mainly due to the activities of small and medium scale miners with the dealers responsible for the bulk of the purchases.
Also at the press conference yesterday were President of Guyana Gold and Diamond Miners Association (GGDMA), Patrick Harding, and his deputy, Azeem Baksh; Commissioner (ag) of the GGMC, Rickford Vieira, and General Manager (ag) of the Guyana Gold Board, Anantram Balram.
According to Persaud, the 403,000 ounces yesterday translated to around US$658M in earnings and would represent a milestone for the country and its mining community.
The minister said that GGMC, in its monitoring capacity, is not interested to be perceived as a “big, bad wolf” but was rather concerned over working with players in the sector to develop a vibrant one that would be around for a long time.
Guyana has been battling leakages of gold for years with a significant amount of gold not being declared and smuggled out to escape taxes. Brazil and Suriname are reportedly the destinations.
It is believed that up to 300,000 ounces of gold are not declared annually, taking a huge chunk of royalties and taxes from government coffers.

Mercury goodbye?
But authorities, straining to monitor vast terrains, remained challenged to drastically stamp out the problem. It is no secret that lower royalties and taxes in other jurisdictions like neighbouring Suriname are not helping at all.
According to Minister Persaud, that the long time problem of recovery of gold remains a major problem with the likelihood of every ounce mined, an equal amount is lost. This more has to do with the fact that mining is being done in traditional ways using mercury, a dangerous chemical which is being phased out.
The good news is that some of the more established companies are making inroads into using alternative methods to improve gold recovery by up to 90 per cent, the officials said.
On the issue of mercury being phased out, Harding admitted that the sector is still mulling alternatives as any would prove an expensive venture for any small miner.

Still, there are measures that small miners can do to improve their recovery rates of the gold.
Meanwhile, the officials also admitted that banks may be a little too conservative and could play a greater role in assisting miners by financing equipment to help improve gold recovery. It was noted yesterday that while millions are doled out for expensive excavators, there is hesitancy to lend for new technologies.
Moves will soon be made to have local banks in a meeting to discuss the issue, the officials said.
On the issue of security, with a significant number of murders reported in the gold bush this year, the Minister said that increased patrols and collaborations are constantly being addressed.
While Guyana does not have any large scale mines in operation at the moment, there are several of them prospecting and production could start in 2014, it was disclosed.
Gold prices are expected to continue their upward trend, a cautious Minister Persaud said.

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