Jagdeo reveals... Aurora Gold Mine wanted to shortchange Guyana from start

Jagdeo reveals… Aurora Gold Mine wanted to shortchange Guyana from start

May 25, 2018 News

By Abena Rockcliffe-Campbell

Opposition Leader, Bharrat Jagdeo

Former President, Bharrat Jagdeo, revealed that seven years ago he had to stand firm in his position that Guyana needs to get a fair deal; otherwise, Aurora Gold Mine, would have gotten away with paying Guyana less than it should. In fact, the company almost did not sign its agreement with Guyana.
Jagdeo made this revelation yesterday during his weekly Press Conference.
Responding to queries about the gold company, Jagdeo said, “Guyana Goldfields (parent company of Aurora Gold Mine) did not want to sign the agreement with us (the People’s Progressive Party/Civic government) because I argued that they should pay an eight percent royalty.”
Jagdeo said that during the era of the signing of the Aurora contract, the PPP/C government had made a decision to compel all big companies to pay eight percent royalties, representing a three percent increase on what royalties were at the time.
Jagdeo said, “We were changing from five to eight for big companies and they refused to sign the contract for a while and I said well fine, we are not going to sign the contract.”
Jagdeo indicated that after the company realized that he was unwavering, they started to rethink.
“Then I had a meeting (with the company) and I asked, ‘What numbers did you run to get an acceptable rate of return on the project.”
The former President said that it was then that the company revealed that it was using a model that assumed the price of gold was under US$1000 per ounce.
“And I said to them, ‘here it is you do not want to pay an eight percent royalty; but, the eight percent kicks in only if gold is above US$1000. So your financial model was run on a price below US$1000 so you are not losing anything; and eventually they signed.”
Jagdeo said that while there has been much in the news about concessions given to the company versus what Guyana receives from that company in royalties, he would not come down hard on the government.
“Some of the elements of the big outcry of concessions are right but concessions are a part of the daily life of government…I will not beat up on this government for giving concessions to any company once it is done fairly, transparently and administrated by GRA,” said Jagdeo.