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Aurora Mines paid terminated workers less than estimated
– despite gold production up in second quarter
As world prices venture beyond US$1,950 yesterday, Canadian-owned Guyana Goldfields Inc., which operates the Aurora Mines in Region Seven, is announcing 28,500 ounces in the second quarter of 2020.
Part of the operation centre in the Cuyuni area, Region Seven.
This means that for the first six months, it has produced 57,500 ounces, exceeding projections of 45,000 to 50,000 ounces.
Its revenues were US$53.7 million in the second quarter of 2020 and $92.3 million for the six months ended June 30, 2020.
The cost of sales was $983 per ounce in the second quarter of 2020 and $1,154 per ounce for the first half of the year.
The company operates the biggest gold mine in Guyana.
With regards to plans to move the Cuyuni operations into an underground one, the company pointed to its announcement on May 7, 2020, on developments including both the open pit and underground. It said it would not proceed as set out in the Technical Report dated March 31, 2020, resulting in a period of care and maintenance upon completion of Rory’s Knoll Phase 4, mining of select satellite pits and depletion of low-grade stockpiles.
“This decision was made taking into consideration the funding gap and the ongoing circumstances related to COVID-19. As our open pit mining contractor’s (Stracon) contract came to an end on May 5, 2020, we used our own mining equipment on site to mine the remaining ore until June 9, 2020 when mining operations ceased. We subsequently processed the last batch of ore from stockpile on July 8, 2020 and continued to recover residual gold from in-circuit inventory. The mine site is now in full care and maintenance.”
In the second quarter, as the company ramped down mining activities, it said it started a phased approach of demobilizing employees, spending about G$440M in employee termination benefits.
“This is lower than the previously disclosed estimate of US$3.2 million. Ongoing costs for care and maintenance are estimated to be approximately $1.0 million per month, including all costs at site and associated general and administrative costs to keep the property in good standing, as required by our Mineral Agreement and Mining License, each with the Government of Guyana. In addition, during the period of care and maintenance, we estimate corporate and administrative costs of $0.5 million to $0.8 million per month for overhead for our corporate office.”
It was disclosed that during the period of care and maintenance, the site is to be maintained and environmental risks are to be managed to ensure safety and security of the mine site until operations can be resumed.
“Infrastructure such as camp, water supply, power supply and other systems remain operational at a reduced level. As previously disclosed, a period of care and maintenance of more than a quarter may result in no further gold production in 2020. Any additional gold production in 2020 would be dependent on timing of the closing of the transaction, the length of the period of care and maintenance, and the ramp-up period to restart of operations.”
Guyana Goldfields Inc. is a Canadian based gold producer primarily focused on the exploration, development and operation of gold deposits in Guyana, South America.
After starting on a high note on commercial production back in January 2016, it has run into troubles with shareholders and is currently working to be taken over by Chinese management.
It has laid off scores of workers. In the meantime, the payoffs referred to, pertains to workers.
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