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It is time to bring Guyana Goldfields to book!
Dear Editor,
The Kaieteur News of November 17,2019 on page 9 carried an article headlined “Gold Company continues to receive $$ Billions in incentives despite never meeting contractual obligations”. The question that immediately comes to persons who have been following gold stock in Guyana is why the journalists that write on financial matters for our newspapers do not carry a similar headline on Guyana Goldfields which has been lowering its guidance year after year. The Company had stated that it is expected to produce 145,000-60,000 ounces in 2019 and so far it has reported that it has produced 96,000 ozs (Q3).
Are the government persons responsible for these matters asleep or only waiting until it is too late when the mine goes on care and maintenance or lays off its workers (the laying off of contract workers has already started) to have a hurried Cabinet meeting and “blast the company over the dismissal of workers?”
The writing is on the wall, this company figures, and performance has been below par. A quick perusal will show that even with gold trading at nearly $1500/oz, the company’s all in sustaining cost for the third quarter came in over $1,800/oz, with the all in sustaining cost for the first five months of 2019 tracking at $1,465/oz; clearly nearly $500/oz above guidance.
The NPV sits at 500M for the Company net equity of 300M and market cap of 100M.
With the stripping falling behind, some possible extraction areas have been put on hold. The Company is touting underground development. Money has to be raised for that, but the reality is that few reputable banks will finance a money losing business for very long.
It is time that the relevant minster calls in the Guyana Goldfields Management for fitness and ignores the company’s PR Hype.
Regards,
E. Naughton
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