Canadian firm to produce 353,000 ounces of gold annually from Reg. 7 project over 13 years – PEA reveals

Sep 11, 2024 News

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By Renay Sambach

Kaieteur News – On Monday, the new owner of the Oko West project located in Region Seven (Cuyuni-Mazaruni) G Mining Ventures (GMIN), a Canadian firm, announced the results of the Preliminary Economic Assessment (PEA) for the project.

The assessment projects an average annual gold production of 353,000 ounces of gold over a 12.7-year mine life, with a total gold output pegged at 4.5 million ounces. The report also highlights an average gold grade of 2.00 grams per tonne (g/t) and a high metallurgical recovery rate of 92.8%.

The company stated that the PEA confirms strong economics for a low-cost, large-scale mining operation using both conventional open pit (OP) and underground (UG) methods.

According to GMIN, with operating costs well below industry averages and a high rate of return, the project is ideally positioned to benefit from favourable macro-economic conditions, including strong gold prices, low inflation, and Guyana’s rapidly developing economy.

The open pit mine is projected to have a life of 15 years, which includes 2 years of pre-stripping and involves four pit phases. In contrast, the underground mine is expected to operate for 13 years, including 2 years of development, across three zones.

The milling operation is planned to run for 13 years. It was explained that during the first three years of commercial production, the processing feed will be provided entirely by the open pit. From the fourth year onward, underground mining will begin supplying a significant portion of the mineralized material.

Notably, the Oko West project payback period is estimated at 3.8 years, based on a gold price of US$1,950 per ounce.

Louis-Pierre Gignac, President & Chief Executive Officer (CEO) of GMIN, commented on the PEA results stating, “The Oko PEA, based on the long-term consensus gold price of US$1,950 per ounce, outlines a high-production, long-life, high-margin operation with an after-tax NPV5% (net present value) of US$1.4 billion and IRR (internal rate of return) of 21%.”

Gignac stated that the Oko West project is ideally positioned to leverage GMIN’s regional footprint, development expertise, and anticipated free cash flow from their in-production Tocantinzinho Gold Mine in Brazil, along with historically high gold prices. He noted that GMIN had recently announced the start of commercial production at Tocantinzinho, which was delivered on time and budget. He noted that the company aims to replicate this success with the Oko project, using essentially the same team.

“I am excited that this exceptionally positive PEA only captures a snapshot of the potential value of Oko, as we continue to explore the prospective land package and evaluate value-enhancement opportunities for improved economics in a feasibility study planned for the first quarter of 2025. I look forward to the tremendous shared-value creation for our stakeholders, including the country of Guyana,” Gignac added.

Moreover, a few months ago, GMIN acquired Reunion Gold Corporation, taking over the Oko West project, as a result of an all-share deal valued at C$875 million (US$638 million).

According to the PEA document, on September 23, 2022, a Prospecting Licence (PL) was granted to Reunion Gold, a 100%-owned subsidiary of GMIN. This license, which covers approximately 10,890 acres (4,407 hectares), is valid for three years and can be renewed for an additional two years.

“In March 2024, an option agreement was entered into for the Northwest extension mining permits, consisting of three medium-scale mining permits (MPMS) adjacent to the PL. That agreement is valid for five years with a possible two-year extension. In August 2024, another agreement was concluded to purchase additional MPMS from a private group of individuals for the Eastern and Southern extensions to the PL,” it was disclosed.

Back in April 2024, the Government of Guyana (GoG) through the Guyana Geology and Mines Commission (GGMC) inked a mineral agreement with Reunion Gold. The intention of the agreement is to establish stable fiscal and operating conditions for the Oko West gold project.

While Guyana’s gold declaration has been on the decline since 2016. Currently, there is only one large-scale mining company, China’s Aurora Gold Mine (AGM). GMIN is one of several Canadian mining companies that are expected to start gold production in the coming years.

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• Canadian, firm, PEA, produce, Projects

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