Large scale gold mining returns to Guyana

Sep 16, 2015 News

…Canadian company begins production

By Desilon Daniels
The US$250M Aurora Gold Mine (AGM) officially began production yesterday, marking the return of large scale gold mining in Guyana since the departure of OMAI Mines several years ago.
AGM, a project of Canadian-based company Guyana Goldfields Inc. (GGI) marked its entry into the mining sector with its first gold pour held at its Region Seven (Cuyuni-Mazaruni location). It is expected that millions of ounces of gold will be produced in just over a decade.

President David Granger during his remarks

Furthermore, it is hoped that with the re-introduction of large scale gold mining, Guyana will return to the “good times” experienced many years ago, President David Granger said.
During the ceremony, GGI’s newest venture was lauded by all. Its benefits to the Guyana economy were echoed by a number of speakers. According to Scott Caldwell, Chief Executive Officer (CEO) and President of GGI, the mine was constructed with approximately US$250M. He added that the project was completed “on time and on budget”.
It is estimated that the plant, once operating at full capacity, will produce 10,000 to 15,000 ounces of gold monthly. Total gold production has been estimated at 3.29 million ounces in the set 17-year lifespan. However, during his speech Caldwell estimated a much longer lifespan, one ranging from 20 to 35 years.
“It’s going to be around a long, long time, generating some good things for the country,” Caldwell said.
He added that GGI employs safe tactics, not only for its employers but also for the environment. He boasted that since it began work in Guyana in 1996, no employee has died on duty.
Aurora’s long lifespan is also expected to greatly benefit Guyana’s job market, GGI Founder and Executive Chairman Patrick Sheridan said. It is expected “the men and women who work here have good jobs, good salaries, and good benefits,” Sheridan said. “These jobs are going to support a family, pay a mortgage, and develop one’s skills. It is perhaps this legacy that is most important,” he stressed.
Aurora began construction in 2013 and saw local and international contractors engaged in the construction process. GGI officials revealed that a large Peruvian contingency had made up the workforce and had offered their expertise in the area.
Additionally, 1,200 temporary onsite workers were involved in the construction stage during its peak. The majority of these workers – about 700 – were Guyanese, GGI said. About 400 were foreigners while local contractors numbered at about 100.
With operations coming on-stream, around 500 employees are expected to be engaged, GGI said. Additionally, it is estimated that corporate income tax will be in excess of US$500M.
“We want the good times back”
Aurora Mine comes at a time when Guyana is experiencing difficulties in the gold sector. President Granger opined that there is a much-needed upsurge in the industry.
However, he said, this return would not be easy and will be stymied by issues facing the sector, including gold smuggling, underdevelopment of the hinterland region, and crime.
In his remarks, Granger lauded the Canadian-based Guyana Goldfields Inc. (GGI) foray into gold production and said that it came at a time when the gold sector is in much needed development. He shared the need not only for improvements in the sector but a number of proposals to improve the conditions of the hinterland region in general.
Further, he said, these factors are compounded by others which have seen the gold sector suffering over the past few years.
The gold industry, Granger said, has been the country’s largest foreign exchange earner for a number of years with record breaking production in 2013 and a recorded seven percent of the country’s gross domestic product (GDP) in 2014.
However, this situation shifted with a sharp decline in gold prices, which led to a reduction of production and in declarations and earnings. Additionally, the rising costs of gold production also resulted in the closure of several small operations and the loss of hundreds of jobs along with the slowing of the growth of the economy.
Granger explained that the gold industry employs about 15,000 persons directly in small, medium, and large scale production. It also sustains the livelihood of 90,000 persons living in about 18,000 households, he said.
“Challenges being currently experienced in the gold mining industry have already started to have an impact on the national economy,” Granger said. “The national economy would be significantly enhanced and the lives of persons of the hinterland and miners will be greatly enriched if the industry were to be placed on safer administrative and surer economic bases,” he added.
According to Granger, improving the hinterland regions of 1, 7, 8, and 9 will go a far way in improving the gold sector.
According to the Head of State, the hinterland regions comprise 75 percent of Guyana. These regions are rich in gold deposits and therefore contribute meaningfully to the gold sector. However, Granger said, these regions are greatly underdeveloped in a number of areas, including security, health, education, and infrastructure.
He further stressed that a more comprehensive and collaborative approach is needed between the State and the industry. He said too that there is a need to repair the regional and local government system, which he believes has been an impediment to stability in the hinterland regions.
He added that more attention must be paid to strategies and policies.
“We want the good times to come back; this sector is important…we need to do something to put gold production on a more stable footing,” he stressed.
However, while he noted that the government had a large part to play in resuscitating the gold industry, Granger opined that gold producers must also play a role. This role must be an active one, he said, and should focus on adhering to laws such as environmental and safety ones. He stressed that the government will not hesitate to clampdown on those who do not adhere to the law.
GGI first began exploration work in 1996 in Guyana before discovering its first pit, Rory’s Knoll, in 2004 and came shortly after the collapse of the OMAI Gold Mine.