New operator of Omai mines experiencing difficulties

Apr 13, 2016 News

A Canadian company that acquired rights to mine in the Omai property, Region Eight, is apparently in deep trouble, with at least one senior official’s services being terminated this week.

The operator of the Omai goldmine, since acquiring the property a few years ago, has reportedly fallen into financial and other problems.

According to a Marketwire report, Donald Gordon resigned as Interim CEO and a Director of Mahdia Gold Corp, effective today.
Effective Monday last, the services of the Managing Director, Sheik Alan Zaakir, were terminated.
The news report yesterday, speaking of the company’s troubles, said that the Board of Directors since the last Annual General Meeting held in August 2014 has received no compensation or funds by any operations from Guyana or from outside investment.
As of August 2014, the company owed over US$14M to the Government of Guyana and creditors.
“Current payables include $767,319 to former Directors, Officers, Related Parties and Consultants after an amount of $939,928 was deducted from the payables to this group reflecting an assumed reduction in reorganization.”
The report said that current management visited the Omai property in August 2014 and although the company had a physical office and a number of employees there was little activity observed. “Reports from the property ceased such that no information was provided as to whether production was occurring and if so, if sufficient to cover expenses of production and provide any funds to the company.”
As a matter of fact, the company ceased trading on March 13, 2013 for failure to file the annual audited and first quarterly statement. The Cease Trade Order followed management cease trade on the CEO for approximately two months which delayed the full cease trade order and was provided under the expectation that the Guyana information would be received.
“The current board had no means to attend the property themselves but made regular requests for the Guyana Managing Director to provide reports; however the board remained to ensure the company maintained stability in its board for the purpose of renegotiating the payment terms which were in default.”
To restore the company’s trading status it will have to obtain the information from the Guyana operations for the fiscal years ended August 31, 2014, and 2015 along with the intervening quarterly periods as well as file to the most recent quarterly for fiscal 2016.
On completion, the company will have to complete a creditor reorganization, secure its ownership of its property, ensure all its continuous disclosure obligations are met, hold its shareholder meetings for the past two years and ultimately seek a stock exchange listing if it can meet listing requirements.
The management of the company completed a recent visit to Guyana at their own expense and observed evidence of significant work in the intervening period though there had been frequent turnover of operators. The company has no official office and only a few security personnel and the Managing Director.
“The company has not been kept informed as to agreements in place and results of operations by its Guyana operating entity. Management was able to meet with the local accountants who are willing and capable to update the financial reporting and help provide a monthly reporting system of operations, revenues and expenses.”
Following the visit, the company said it has been approached by persons who are proposing to join the board and take control.
The inactivity of the Omai property would raise eyebrows as it has been a number of years now that Mahdia Gold has taken possession.
Omai Gold Mines was most recently held by Iamgold after acquisition from Cambior Resources. At the time it was built, in the early nineties, Omai was the largest gold mine in South America.
In a period spanning 13 years, Omai produced over 3.7 million ounces of gold during a period when the price of gold was approximately US$300 an ounce.
Mahdia Gold believed that historical data suggests that Omai still contains significant gold deposits. By 2006-2007, more that 3.7 million ounces of gold was produced.