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Guyana ‘might’ receive taxes from Canadian mining company if gold price remains high – CEO
The Oko West Mine (Guyana ‘might’ receive taxes from Canadian mining company if gold price remains high )
Kaieteur News- As long as gold prices remain high when the Oko West Mine starts producing gold in 2028, the Government of Guyana (GoG) might receive corporate income taxes from Canadian mining company, G Mining Ventures (GMIN), the new owner of the project.
In April 2024, GMIN bought Reunion Gold, another Canadian company for some US$638 million – through this transaction GMIN acquired Reunion’s flagship Oko West Mine which is located in Region Seven (Cuyuni/Mazaruni).
Last Wednesday, GMIN held an educational forum in Georgetown, on the Oko West project. During this event, the company’s President and CEO Louis-Pierre Gignac, in his response to a question on whether the company will be paying corporate taxes emphasized that GMIN intends to honour the existing contract it inherited after acquiring Reunion Gold.
Gignac said, “Typically, the agreement is one that we inherit through the acquisition of Reunion Gold so it is not an agreement that is open for renegotiation.”
However, he expressed optimism about paying corporate taxes to the Guyanese government as its newly acquired Oko West project is poised to generate profits, contingent on high gold prices.
GMIN falls under the Gignac Family-owned G Mining Services (GMS). One of GMS principals is Louis Gignac, who was the head of Cambior Inc. a major shareholder in the former Omai Gold Mines Limited (OGML) which operated in Guyana’s mining industry.
GMIN President and CEO Louis-Pierre Gignac
Louis-Pierre Gignac said unlike his father’s previous involvement with Omai’s gold project, where the company did not pay corporate taxes to Guyana due to low gold prices at that time – he is confident that the Oko West will benefit from the current high gold prices.
“Like everything else, you need to be hitting the window at the right moment for profits to be made and [for] corporate income taxes to be paid,” he stated.
Gignac further added that, with the price of gold over US$2,000 per ounce, the Oko West Mine is positioned to yield profits, allowing for tax payments to the government.
“We hope to pay those obviously, because we do feel that it’s a different gold price environment that we’re in and look forward to building this mine to produce in that environment,” Gignac added.
In addition to potential corporate tax payments, Gignac highlighted that Guyana will benefit from royalty payments.
He explained that with an average 6.5 percent royalty structure, Guyana will generate income through a combination of 8 percent royalty from open-pit mining and 3 percent from underground mining.
“I think the royalty structure is such that there is always going to be income for the government,” he said.
Moreover, Gignac had underscored the value of the Oko West calling it a “world class project.” He disclosed that the company is currently working on the feasibility study for the project and noted that the Environmental and Social Impact Assessment (ESIA) will be submitted to Guyana’s Environmental Protection Agency (EPA) by the third week in November.
According to Gignac, in early 2025, the company will make separate requests to initiate early works. By the third quarter of 2025, the company is hoping to start construction and by 2028 commence gold production from the open pit.
The Oko West Mine is set to be a large-scale gold project and is expected to produce 353,000 ounces of gold annually over its 12.7-year mine life, with a total output of 4.5 million ounces.
The Oko West Preliminary Economic Assessment (PEA) highlights an average gold grade of 2.00 grams per tonne (g/t) and a high metallurgical recovery rate of 92.8%. The company had said that the PEA confirms strong economics for a low-cost, large-scale mining operation using both conventional open pit and underground 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 macroeconomic conditions, including strong gold prices, low inflation, and Guyana’s rapidly developing economy.
Notably, the Oko West project payback period is estimated at 3.8 years, based on a gold price of US$1,950 per ounce.
(Guyana ‘might’ receive taxes from Canadian mining company if gold price remains high – CEO)
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