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Guyana Goldfields no longer interested in selling
Canada-owned Guyana Goldfields Inc. (GGI), which operates the country’s biggest mine, has for all intents and purposes abandoned attempts at this time to sell.
Hours after a report by Bloomberg on Tuesday that the company has been engaging market experts for a possible sale, a spokesperson made it clear…that juncture of the company’s history is behind them.
“…We do not really like to comment on rumors … that article is simply speculations… We can confirm that we had engaged both Maxit and RBC to assist and advise during the proxy contest but as you know that is now behind us… and you are aware our Board has made several positive changes aimed at improving the company all around performances and to increase stakeholders returns which has been demonstrated,” a spokesman of AGM Inc., the local operating company of GGI said.
Bloomberg, a respected business news site, reported Tuesday that the Toronto-based company is working with advisers at Royal Bank of Canada and Maxit Capital, an independent financial adviser to mining companies.
While sources said that the matter is private, it was disclosed that the deliberations are in early stages and may not result in a sale of the business.
The gold mining company has faced pressure from investors after a sell-down in the stock saw the company losing more than US$1B in value since June 2016.
Investors, led by former chief executive officer Patrick Sheridan, said publicly at the beginning of the year that they were seeking an overhaul of the board, amid falling production and higher costs.
In April, Guyana Goldfields reached a settlement with a group of dissident shareholders after a proxy fight and agreed to revamp the board and change the CEO.
Guyana Goldfields slumped by almost half in late October after the company lowered its production guidance and raised costs for a second time last year.
The first time it delivered similar bad news in 2018 was in mid-July, when its market value plummeted by more than a fifth.
The company’s shares were down 5.7% at 10:35 a.m, Tuesday, in Toronto, giving it a market value of about C$231 million (US$175 million).
That’s down from about C$1.6 billion in mid 2016.
AGM, in addition to its main operations at Aurora, has annexes at Buck Hall on the Essequibo River and at Liliendaal, Georgetown.
AGM has more than 600 workers and have been producing about 150,000 ounces on average since starting commercial operations in early 2016.
It is the largest private producer for an industry that has been the biggest foreign currency earner for Guyana.
It is moving to build an underground mine.
It is targeting up to 160,000 ounces to be produced this year with 38,300 declared for the second quarter.
Gold prices are on a high currently, topping over US$1,500 per ounce on the world market.
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