OMAI sees Guyana US$190M Mabura Road as a big boost to their gold operations

Jul 25, 2023 News

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Kaieteur News – Even as the fiscal terms of large-scale mining contracts in Guyana remain hidden from the public; Canadian gold mining company, Omai Gold Mines has listed the US$190 million Linden to Mabura Road as a benefit to their gold operations here.

Omai is no stranger to Guyana; the company holds a 100% interest in the Omai gold project in Guyana which produced over 3.7 million ounces of gold between 1993 and 2005. About two years ago, Omai re-entered Guyana’s mining industry, occupying the same property which host two gold deposits: the shear-hosted Wenot Deposit and the adjacent intrusive-hosted Gilt Creek Deposit.

Elaine Ellingham, the President and Chief Executive Officer (CEO) of Omai during an interview talking about the management of the company shared that one benefit of their mining project is the road that is being paved.

Ellingham said during the interview that within a year’s time the road that comes within several kilometers of Omai property will be paved. To this she added that the company also has an airstrip on property and an old tailings facility which they believe can be refurbished to be used again.

According to her slideshow presentation about the benefits of the project, it was listed that, “The widening and paving underway as part of Government-funded upgrade of road to Brazil (comes within 12km of Omai property).”

The sod was turned for this project in May 2022, after a contract was awarded to Brazilian firm, Construtora Queiroz Galvao S.A. for the construction of the 121 kilometres road.

In 2020, the Government of Guyana secured a loan for this project. The US$190 million road project comprises a US$112-million loan from the Caribbean Development Bank (CDB), a grant of £50 million (US$66 million) from the Government of the United Kingdom via the CDB- administered United Kingdom Caribbean Infrastructure Fund, along with US$12 million provided by Government.

Kaieteur News had reported that this project will consist of two main highways; the width of each lane is approximately 3.6 metres, some hard shoulders both sides measuring 2.4 metres, cyclist and pedestrian lane of two metres, a utility corridor, about 10 bus stops, and nine rest areas just to mention a few. The Linden to Mabura Hill road project is just the first phase that will ultimately lead to a completed Linden to Lethem road link that will then complete an overland link to Brazil.

On July 17, some three weeks after Omai announced drilling results showing significant gold deposits in their Wenot pit, located in Region Seven (Cuyuni-Mazaruni)–the Canadian company announced “similar excellent drill results.”

It was on June 22 when the company in a press release disclosed that within the first six months of 2023, it has drilled 11 holes which showed significant gold in their Wenot pit.

In their latest statement, Omai CEO said, “similar to our excellent drill results from a couple of weeks ago, these new results again confirm the significant expansion potential for the Wenot deposit, to depth as well as along the flanks.”

The company had disclosed that since their return to Guyana’s gold industry, they have been expanding their search in their pits as well as increasing the depth at which they search for gold. Ellingham had noted that the results so far have proven to be fruitful.

Following the previous announcement, Ellingham had noted that the impressive drill results continue to confirm the magnitude of the Wenot deposits, by demonstrating continuity of significant gold mineralization. She added, “We have not seen any limitations to the Wenot deposit, and as such are confident that additional drilling can further expand the gold resources.”

This publication had reported in January 2022 that the company had struck the jackpot only in its Wenot Gold deposit. It had found the 1.6 million ounces gold some 400 metres south of the Fennell open pit- a pit that has produced some 2.4 million ounces of gold for Omai in the past and it was located at a depth suitable for open pit mining.  Nine months later, Omai was able to increase its gold resource in the Wenot Deposit from the 1.6 million ounces to 1.86 million ounces-a 16 percent increase.

Importantly, Omai’s CEO said that the results to date are already expected to positively impact the resources as they move forward to an updated mineral resource estimate, to be followed by a decision on a preliminary economic assessment (PEA) later this year.

Notably, while foreign companies have been rushing to cash in on the “gold fever” in Guyana, the country has been suffering massive declines in its annual declarations since 2017.

Kaieteur News had made several requests for the Government of Guyana to release the mining contracts, particularly large-scale mining contracts.

In 2019 when Guyana became a member of the Extractive Industries Transparency Initiative (EITI), the country agreed to adhere to several requirements. In this case, EITI requirement 2.4 (a) of the 2019 Standard states that Guyana should publicly disclose all mineral agreements entered into force prior to the reporting period, in this case, 2019. Although the requirements were known to the administration, it continued to make excuses to avoid the release of these contracts.

In this vain, this newspaper reported in December last year that Vice President Bharrat Jagdeo dodged the matter on four different occasions. During a press conference in April however, he publicly committed to releasing the fiscal terms for all mining agreements. This was the second time the Vice President promised to “personally intervene” for the release of the fiscal terms of all large-scale mining contracts.

The Vice President made a similar commitment in August 2022 during an appearance on The Glenn Lall Show aired on Kaieteur Radio. While appearing on that radio programme, he told the Kaieteur News’ publisher, Glenn Lall, “I don’t see the reason why many of these are not in the public domain already. I’ll find out about it.”

When pressed further Jagdeo said, “I can undertake to find out with you there, what provision the GRA [Guyana Revenue Authority] is so cagey about that it doesn’t want to release… I will undertake anything that is non-propriety that you get it released. I will personally now see that this happen.” However, despite the promises by the Vice President, the contracts remain hidden.

Kaieteur News Publisher, Glenn Lall had previously questioned the cost of the road project, as well its economic viability. Lall believes that costal road links are of far greater importance at present, given the increase in road traffic. “Everybody knows that the roads in this country are insufficient to handle and take care of the traffic, everybody knows also that this country has been on a development pathway for the past couple of years. Roads have become one of the major downfall in Guyana. At present, it is causing a tremendous dent towards development, you can’t leave your office to do anything and get back to work in an hour, ½ of a day finish in the traffic alone. It has become a nightmare, it has become a sick everyday right across this land, more so the East Coast, the West Coast, the East Bank and the West Bank of all Essequibo, Berbice and Demerara. Our leaders are clueless as to how to find a solution to this vehicular madness that has taken over this land,” Lall had said previously.

He pointed out that Guyana borrowed US$47M and fixed the West Coast of Demerara road, then a further US$45M to build the East Coast of Demerara highway. It borrowed US$31M for the Sheriff Street and Mandela Avenue road; spent US$13M for the Eccles to Mandela Avenue and maybe another US20M to be borrowed to connect Diamond to Eccles. “So we talking about almost US$160M of borrowed money to fix some roads. Whether we get value for money – that’s another thing, but that’s not what I am talking about here.” He said borrowing US$160M to fix the West Coast, East Coast, Sheriff Street, Diamond to Mandela will ease a great burden on the people of this country who use the roads every day, in and out the city. “I applaud the government for doing things like that, but when you hear your government borrowing US$190M to upgrade Linden to Mabura Road then one has to ask serious questions as to what is going on in this country with our lives,” Lall stated.

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• Chief Executive Officer (CEO), Elaine Ellingham, hidden, Omai, President

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