Gov’t eyes reduced trading role for Gold Board after $9B deficit

Dec 30, 2016 News

– declarations expected to break record 700,000 ounces today

Gold declarations are continuing their excellent run, expecting to surge pass an unprecedented 700,000 ounces declarations today with 690,000 ounces recorded as of yesterday morning.
According to Minister of Natural Resources, Raphael Trotman, for the year 2016, the Ministry of Finance had projected a gold declaration target of 550,000 ounces, an increase of 21.8% of the previous year’s target.
“However, the Ministry of Natural Resources, the GGMC (Guyana Geology and Mines Commission) and the Guyana Gold Board, privately worked towards a different target which was 650,000,” Trotman said yesterday during his ministry’s end-of-year press conference.
“Today, I am ecstatic to announce that declarations stand at an unprecedented and whopping 690,000 – the highest gold declaration figure in any calendar year in the history of gold mining in Guyana.”
And it is not over yet. With one day left- today- the declarations are expected to push that figure beyond the 700,000 ounces mark.
One major dealer, Mohamed’s Enterprise of Lombard Street, is expected to push in more than 7,000 ounces today with El Dorado Trading and other dealers expected to chip in with the rest.
Mohamed’s Enterprise is running neck to neck with large-scale producer, Guyana Goldfields, with each expected to declare an accumulated 150,000 ounces by the end of today.
With Aussie-owned Troy Resources expected to chalk up 90,000 ounces by the end of today, it would mean that declarations from small and medium scale miners would account for over 60 percent of the declarations– a heartening effort, Trotman said.

Minister Raphael Trotman

“We again wish to recognise the small and medium scale miners who delivered the majority of this gold and as well the two larger companies Guyana Goldfields and Troy Resources, who have demonstrated good stewardship of the resources and 70% of the gold declared.”
Next year, the industry is looking at a similar target- a total declaration of 700,000 ounces.
“I take this opportunity to personally congratulate the miners, the two large companies (Troy and Guyana Goldfields) and the dealers for their good performances,” the minister said.
Meanwhile, with regards to the management and regulation of the gold industry, the minister was clear that changes are necessary to move it forward.
This was after it had been found that the Guyana Gold Board had racked up a treasury deficit of over $9B.
“In 2015, upon assuming office, the coalition government recognised that the Guyana Gold Board had over a number of years amassed a deficit of more than $9B. This was an untenable situation which cannot be allowed to continue.”
According to the minister, a comprehensive review of the 35-year-old organization recommended that the board has to transition into the role of regulator and reduce its role as a purchaser of gold.
“In a few weeks we will be meeting with miners, miners associations, and gold dealers to define the way forward. The Ministry of Natural Resources has fought tirelessly for the continued existence of the Guyana Gold Board because the Ministry believes that there is merit in having the organisation function as a regulator to monitor gold dealers and notes the raised voices of many miners within gold mining districts for an increased presence of the Gold Board in those areas.”
According to Trotman, the government will continue to look at best practices both regionally and further afield, with a view to making the Guyana Gold Board a more vibrant, effective and viable entity vital for national development.
“Early 2017 will see some significant changes in the way the board does business,” he promised.
Gold board is charged with not only buying gold but monitoring and licensing dealers and traders.
Trotman did not rule out the Gold Board still making purchases as there are other considerations too-like the absence of dealers in critical areas, like Lethem, Region Nine.
He said that a number of options for the future of Gold Board is being examined.
After prices fell more than three years ago following record prices on the world market, the Gold Board had been left holding on to huge inventory and losses. It was forced to sell off a little at a time, bring down the deficit to within $2B.
Yesterday, questioned about smuggling of gold, a major issue earlier this year that sparked an inter-agency probe, Trotman said that it would be foolhardy to claim that the problem has been eradicated.
Rather, he credited enhanced monitoring activities with the Ministry of Public Security spearheading the anti-smuggling effort.
With indications that gold was making its way illegally across the border to neighbouring Suriname, Trotman disclosed that next month Guyanese authorities are expected to have discussions with their counterparts there.
The agencies tackling the instance of smuggling include the Ministry of Public Security, police and Special Organised Crime Unit (SOCU).
Meanwhile, a proposal to charge a three percent commission on prices paid to miners to offset losses by dealers and traders, is still very much in the air, the Minister said.
It is the plan to meet with dealers and other stakeholders to decide on the way forward in the New Year.