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This very large investment has set best global practices for an industry that needs an exemplar

Oct 18, 2014 Letters

DEAR EDITOR,
One of Guyana’s best investments over the last 20 years, both in size and legitimacy, has been anecdotally reviewed by the fictitious non-existing phantom writer, Sultan Mohamed, who pushes, federalism as a means of creating the uneven development of Guyana.
As has been his practise, Sultan Mohamed completely misrepresents Guyana’s best and most transparent private sector investment. The misrepresentations are many and sadly expose the writer’s anti-progress diatribes.
First, the Sultan misrepresents the financial facts presented by Guyana GoldFields, a listed company on the Toronto Stock Exchange among whose shareholders includes the IFC (the financial arm of the World Bank).
A careful study of the financials of the company would reveal that since the company’s inception in 1996 into Guyana it has invested approximately US$192 Million in development and exploration costs in order to get the Aurora Gold Project to Feasibility Study Level. In addition, the capital expenditure in order to achieve commercial production is US$249 Million (of which approximately US$120 Million has already been spent) which produces a grand total of US$441 Million investment from the company since its inception. So far, Guyana Goldfields is yet to sell a single ounce of gold.
The Sultan, by confusing the factual numbers stated by the company hides the fact that the people and Government of Guyana will receive US$960 Million dollars over the life of the project, including the highest royalty rate in the world – 8%.
If the Sultan would take his time to read the details, he would realize the government gets approximately half the total revenues from this mine through high royalties, duties, payroll taxes and a whopping 30% taxes on profits.
The Sultan also fails to highlight that for every one of the 900 jobs during current construction phase and 4000-5000 during the production life of the project, 5 additional jobs are created in the economy – the well-known multiplier effect.
The Sultan, who has been preaching racial superiority since his return to Guyana, attempts to subtly introduce race in his diatribe. But he betrays his own prejudice when he fails to mention that African and Amerindian Guyanese own less than 5% of the economy and much less of the technical product and services in Guyana. Therefore I am sure that a review of Goldfields procurement would show that over 90% of its goods and services sourced in Guyana are from non-African and Amerindian Guyanese companies. All that the Sultan’s letter highlights is that persons of his ilk have no reason or rhyme in their utterances.
The Sultan did not even have the nationalist spirit to indicate this gold investment is the most environmentally safe extractive project in the history of Guyana and one in which the state-of-the-art design features will prevent any Omaiesque cyanide spillover. More so, this project is guided by the Guyana LCDS initiative with minimal deforestation and significant investment cost to ensure the water from the tailing pond can be used for domestic purposes.
It seems there is no limit to the distortion and deception of Sultan Mohamed. As a person who believes in Indian hegemony, the Sultan has exposed how much Guyana still needs to change to bring economic equity to the majority of its people.
The government of Canada has ensured best practices in all extractive ventures that are initiated by Canadian companies and, in this particular case, has supported the government of Guyana with a Mining Kit, support for a Mining School and a portfolio of other financial and operational benefits to our nation.
Guyana should be ecstatic about the very large investment that started under President Jagan and which has set best global practices for an industry that needs an exemplar.
Hollis Lynch

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