Latest update April 13th, 2025 1:30 AM
Latest News
- ‘Blink Beauty by Ary’ always treating you to a glamorous look
- From joblessness to success
- A business inspired by a gift for her teacher
- LOCAL TESTING LABS CAN IMPROVE CONFORMANCE AND CUSTOMER CONFIDENCE WITH ISO STANDARD
- Literacy Must Come First — Why Literacy is the Foundation of Innovation and the Key to Guyana’s Digital Future
Calamity at Guyana Goldfields
DEAR EDITOR,
Having read the comment attributed to the esteemed Minister of Natural Resources in yesterday’s newspaper on what is happening at Guyana Goldfields I cringed. Is this man serious?
What is going on in this company is not about internal squabbles, it is about bad management and endless lies upon lies by the operators. When will this minister wake up and take these to task? This Company is one of the main contributors to the GNP, and if it is failing in this regard, then it is an area of big concern for any government. Workers jobs are at risk. Just yesterday it continued laying off more workers.
“Not surprisingly, management’s missed guidance and underperformance for 2018 is reflected in its financial report. The disappointing revenues and earnings, as reported, heighten concerns about the board’s ability to provide appropriate oversight over the company’s operations team.
The new life-of-mine (LOM) plan for Aurora issued by the company — even though it only issued one last year is troubling — provides for a shorter life, a lower grade, higher costs and a dramatic 43-per-cent reduction in production.
“This much gold just doesn’t disappear. Management has yet to provide a credible explanation of why there’s been a catastrophic reduction in ounces from the resource model that they initiated and signed off on just one year ago. They were either misleading the market then or they are misleading the market now. …
“Over the past year, they’ve blamed everyone and everything, including mine rates, former employees, contractors and the resource model, for their performance.
Of concern is that the company’s 2018 mining reserve update, which was initiated and conducted under the review of Scott Caldwell, chief executive officer, and the technical committee, showed an increase of reserves of 500,000 ounces from 2017. Now, in 2019, the company is claiming 1.7 million ounces of reserves have gone missing.
The out-of-control costs at Aurora will have a very dramatic impact on the open-pit reserves and life. For example, mining costs have been reported at $3.43 per tonne (which the company expects to reduce to $3.01 per tonne through contract mining), yet the 2017 feasibility study had estimated $2.11 per tonne — an overrun of 50 per cent. Similarly, general and administrative expenses have grown from an estimated $8.52 per tonne to now almost $11 per tonne.”
In the two days following the announcement of the new life-of-mine plan, the share price of Guyana Goldfields tumbled by 14.4 per cent to $1.13, a new 52-week low.
Analysts also reacted to the news with disappointment.
“We are disappointed by the significant loss in ore tonnes with no offsetting increase in grade. This could be partly a function of new and more conservative grade-capping parameters, but the details of the mine plan were not provided beyond the summary level. This is the most frustrating aspect of the update,” commented a representative of ScotiaBank.
“We had expected the company to lower its 2019/20 production forecast relative to its 2018 plan; however, the revision to reserves was more severe than we anticipated,” commented a representative of TD Securities Inc.
“Guyana Goldfields is currently in the penalty box with investors for downgrading its 2018 guidance twice throughout the year and now completing a resource review and new LOM plan with large declines in reserves, production and valuation. We are moving our rating and target to ‘under review,'” commented a representative of Paradigm Capital.
E. Naughton
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
The mirage of citizen investment
Peeping Tom… Kaieteur News- The latest song and dance from the corridors of political power in Guyana comes wrapped... more
Weekend Cartoon
