Guyana’s gold rush entices foreign investors to fast-track Canadian company gold operation

Mar 08, 2024 News

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Kaieteur News – Canadian mining company, Reunion Gold has firmly set its sights on reaching gold production at its Oko West Gold Project located in Guyana’s Region Seven (Cuyuni-Mazaruni) by 2027.

Last November, the company which has an estimated 4.2 million ounces of gold, submitted an application to the Environmental Protection Agency (EPA) seeking permission to conduct gold mining. The company’s President and Chief Executive Officer (CEO), Rick Howes, during an interview disclosed that they are on a fast tracked timeline with its Oko West project.

Since discovery in 2021, Howes noted that the resource estimate continues to grow, and that the deposit offers ample scale to underpin a meaningful mining operation. Last June, the company announced its maiden resource estimate of 2.5 million ounces of gold. In a few months, the company is expected to update its Preliminary Economic Assessment (PEA), as Reunion Gold is now actively considering both open-pit and underground mining.

Reunion’s CEO underscored that what sets the company apart is the meticulous execution of their strategy to advance the project through studies and permitting, to support the aggressive timeline, which was affirmed by overUS$70 million raised last September to fully fund the studies.

Guyana had been praised by foreign mining companies for its established Mining Act, a rich history of economical gold deposits, and favorable mining laws with a pro-mining government. Reunion’s CEO attributes being adequately capitalized to continue without further dilution as a major accomplishment for the company last year. Despite volatile markets, Reunion Gold was able to secure funding from La Mancha Investment Group.

Howes said, “In September yeah we took the opportunity to raise some money and really position ourselves to be able to execute the remaining study phase and the permitting phase of the project…” He also disclosed that the company anticipates up to US$25 million more by July 2024. “So that sets us up really well…” the company’s CEO stated.

Notably, the interviewer asked how the company was able to secure funding since a lot of companies were not getting funded. To this, Howes responded, “You’re absolutely right, difficult market and you know I think there is a bit of a differentiator in the market for quality of project and also jurisdiction in terms of how that affects timeline and so on.” He continued, “So for us we are very fortunate, we have a great mining jurisdiction which supports mining and has a fairly well define permitting; and (a) process that allows you to move quickly and in many cases parallel activities. So we are taking advantage of that.”

The CEO noted that the opportunity in Guyana to move from discovery to production in a very short timeframe is the reason why the company needed to raise money. He explained, “So with permits in hand, with feasibility study complete, that’s happening within a year, so that’s a pretty tight timeline so in order to be able to do that we needed the funds…So we looked at it from that point of view…Obviously we needed to raise that quantum of funds in this market (s0) we needed a large investor to take an interest, so we were fortunate that La Mancha came in as a major investor…”

To this end, the interviewer asked what allowed La Mancha to invest that amount of money, when the project is in such an early stage. The CEO explained that La Mancha is familiar with the project as they have been in dialogue with Reunion for quite some time and had done their own due diligence.

Howes noted, “In this day and age, the issues with mining company if they are too slow, if they take from discovery to production (about) 15/20 years that’s a long time to have investors waiting…” In Reunion’s case, he explained, “This is just lucky for us, a great discovery that we quickly brought from zero ounces to 4/5 million ounces very quickly so it’s really a case that we have a project for sure of that quality and grade and scale so take advantage of it.”

The CEO added that being able to turn the value of money around on investment in one-third of the time is worth a lot to investors. Howes also stated, “We (Reunion) weren’t constraint by the ability to advance the project at all in terms of financing, which is because probably because of the statement of the country and the value of the asset but were probably in a handful of companies that can do that…”

Moreover, Howes disclosed that Reunion will continue to explore for more gold while advancing the Oko West project. He noted 2024 as a crucial year towards production milestones. In conjunction with the PEA, Reunion is in discussions with the Government of Guyana (GoG) for a minerals agreement to outline project fiscal terms and economics.

Also, the feasibility study is slated to commence this year. Howes underscored the importance of exercising caution in defining project parameters and costs during this phase. By adhering to realistic assumptions and detailed engineering, he expressed confidence in staying within Oko West’s budget and timeline.

Notably, baseline environmental field studies are set to conclude soon in preparation for the submission of a formal Environmental Impact Assessment (EIA) report.   Additionally, key permits are anticipated to be obtained by the end of 2024, this timeline, Howes said positions Reunion to make an official construction decision by next year.

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• gold, investors, Mining, Reunion Gold, Rick Howes

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