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Gold permits – what is Guyana getting?
Editorial…
Kaieteur News- Canada’s Gold Port Corporation has positioned itself to capitalize on soaring gold prices. Last year, Gold Port obtained approval from the Guyana Geology and Mines Commission (GGMC) to explore and exploit the mineral riches in the Groete Gold Project in the Essequibo Region.
The numbers in the GGMC’s permits are huge: five years duration, 1384 hectares or 3418 acres for exploration, a reasonable (inferred) estimate of 1.57 million of gold-copper equivalent ounces. Gold Port executives have to be drooling in anticipation of harvesting enormous profits from Guyana’s rich mineral fields. Gold prices are around US$2470 per ounce, but Gold Port has hedged against falling prices by factoring in a calculation of US$1275 per ounce in its estimates. There can be no question that the Canadian mining company has set itself up well, is sitting on top of one of Guyana’s largest treasure troves. The question is what has Guyana gotten for itself for its warm reception to Gold Port?
There is the high likelihood of gold being found in heavy commercial quantities in the Groete project. A bonanza is in the making for Gold Port, and its investment is welcomed, its confidence in Guyana’s potential for company profits as high as it could get. But what is Guyana getting in return for royalties? What is the rate of taxes Gold Port is going to pay on its income to the Guyana Revenue Authority? Are Guyanese professionals going to be holders of the good jobs that should come with the massive Groete Gold Project? Not laborers and truck drivers only, the bottom of the ladder stuff that has no appeal to the foreigners, but which politicians all over the world like to celebrate. We are talking about jobs as accountants, auditors, computer specialists, Human Resource Managers, and others in those niches.
“The Company is interviewing additions to management to facilitate a drill program to enhance and potentially expand the current known resource.” It would be interesting to know who numbers among the candidates being interviewed for those vacant management positions. We say this unambiguously: Guyanese must feature and feature prominently in the final selections for managers. It cannot be a token local face in one section, and another in some other department. With an inferred estimate of one and a half million ounces of minerals (gold-copper equivalent), from a project of this magnitude, Guyanese workers, from unskilled to skilled, manual to technical, must be a part of Gold Port’s staff complement. The Guyanese worker must be on the same pay scales as their foreign counterparts in the same jobs.
In terms of dollars, we hope that the Government of Guyana was wise and firm in the royalty percentage negotiated. Guyana has handed on a platter to Gold Port that five-year approval for an area that promises so much. It is one that is almost guaranteed to perform, an investment with extremely rich returns for the company. It is hoped that the PPPC Government got more for Guyana in 2024, as compared to those prior gold deals finalized and approved. Gold Port has provided the clearest indication of how much this Groete project means to it, how lucrative it could be, almost sure to be. For when the company could be so bold as to price the mineral at close to less than half of what it is trading on the world’s gold markets, it confirms how certain Gold Port is that it will reap handsome profits and then still some more. To put it differently, even if gold prices were to fall precipitously, Gold Port is still excited about the project, is set to make good money.
The numbers were before the government, from estimated ounces, the probability of success with rich finds, and gold prices at current and other levels. Notwithstanding sensible consideration of the cyclically depressed prices that are an inseparable aspect of gold markets, there are still profits to be made. All of this should mean something better for what Guyanese get as their share of this gold bargain. Jobs are fine, but that cannot be all. Royalties and taxes will only mean something, if they are at rates that are favorable to this country. Time will provide confirmation.
(Gold permits – what is Guyana getting?)
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- Canada’s Gold Port Corporation, Editorial, Gold prices, Guyana Geology and Mines Commission, profits
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