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Troy Resources mines out surface gold reserves then fires locals
…to use expats to focus on underground mining
Kaieteur News – Having mined out the gold from what is considered the minimal subsurface area in the Hicks and Spearpoint pits of the Karouni gold mine, Australian owned Troy Resources has upped the ante with regards the firing of locals, in order to use expatriates to focus on an underground mining operation.
The massive processing plant set up by Troy Resources at Karouni.
This much is evident from a recent circular disseminated to local employees attached to the mines which underscored that the company is currently “evaluating our manpower requirements and preparing the plans for stepping down these members of our staff. The process has already started to occur with the reduction in the size of the mining and processing departments.”
The circular to employees was signed by the mines General Manager, Colin Connors, a week ago, and sought to address the “discussion and uncertainty” about the future of the company and the employees.
According to Connors in his missive, “I also realize that many of you have seen the recent news article about Troy’s downsizing; as of the end of June, mining in both Hicks and Spearpoint has ceased due to reaching the extent of the current designs.”
He said, the operations plan “had us continuing the mining in the Goldstar area from June -August along with low grade stockpiles being used to provide the mill feed; however, sampling of the Hicks low grade stockpile showed the gold grade was not economic to process.”
It was noted too that additionally, the processing of the Goldstar material showed that the amount of gold produced was significantly lower than predicted.
“The combination of these two factors significantly reduced the cash flow of continuing operations” that led to a decision was made by the Senior Management to cease mining/milling operations and move into Care and Maintenance.
Connors noted that as stated in the news reports, “we have notified the Ministry of Labour that we will be laying off a significant portion of our workforce, but the final amount has not been finalised.”
Seeking to underscore that Troy is closing the mine, Connors used the occasion to disclose that “we are working to progress with the development of the SMARTS Underground project and are evaluating an expansion of Hicks pit to access deeper portions of the ore body.”
He said too that “additionally, we are continuing to explore within Troy’s vast concessions and have recently signed an agreement with Barrick Gold for them to explore on part of our concession.”
He posited, “in other words, there is a strong potential sustained mining operations at Karouni; this shutdown is to allow the time to do the exploration and evaluation necessary to support a restart of operations.”
Conceding the news of a shutdown would be met as a surprise, and in fact upsetting for all, Connors sought to explain that “this was not a decision that was made lightly but was a necessary one in light of the current business situation.”
It was in May last that the Australian-owned company announced that it faces temporary closure later in the year as a result of the depleted ore being obtained from its primary mining pits. At the time, it said it was exploring purchasing the feedstock for its mill from third party miners. The information was disclosed to shareholders.
Executives in an update had related to shareholders at the time that the primary source of ore delivered to the mill over the last 15 months has been the Hicks 4 open cut pit, while in recent months, a modest contribution also came from the Spearpoint open cut pit.
These pits, the company said, are likely to be exhausted by mid-June or early July 2021.
“The remaining volumes of ore in both pits,” it noted, “are somewhat lower than had previously been expected with a recent internal review of the calculation of model versus actual grade control data identifying a relatively modest unfavourable discrepancy.”
The company stated that in the interim, Troy is exploring the availability of third-party ore for toll treating or other opportunities and said, “…there is nothing further that can be reported at this stage.”
It reported that gold production for the month of April was 2,140 ounces while the production forecast for the months of May and June are 2,400 and 1,909 ounces.
The company said that its production rate is on track to realise at the end of June 2021, an average 2,200 ounces per month for the year.
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