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Cheap gold
Editorial…
Kaieteur News- “The Oko West Feasibility Study marks a major milestone in realizing the value of what we consider one of the world’s most exciting undeveloped gold projects. It confirms a long-life, high-margin operation with strong economics, supported by a proven resource and solid infrastructure.” More and more, the language of Louis-Pierre Gignac, Chief Executive Officer of Canadian mining enterprise G Mining Ventures Corp (GMIN), is becoming regular news, the story of mineral rich Guyana. El Dorado, once the stuff of legend is now reality, taking the world by storm. All Guyanese should be as excited as the GMIN CEO, for the more his company chalks up big profits, the more the big dreams for a better life are in the hands of citizens.
From gold alone, this mining venture by itself, there is so much to expect. The price per ounce of the metal is around US$3000, and executives of GMIN are beside themselves over current estimates that stand at 4.3 million ounces. The startup investment is a billion US (US$972M), with an additional $650M needed over the life of the project. The rate of return is put at 27%, and the payback period under three years. In every one of those numbers, GMIN has done the incredible. It has taken over from Midas, breathing, sleeping, and floating in a golden limousine. Life is good, cannot be surpassed, for GMIN. What is there in this fabulous Oko West gold project in the mineral rich Cuyuni-Mazaruni fields for Guyanese?
Guyanese get to celebrate what politicians love to sell to prove their worth, 1270 permanent jobs. This is a constant mantra of politicians, with jobs highlighted, and which have their merits about them. But when CEOs put aside their usual corporate blandness, and speak about “one of the world’s most exciting undeveloped gold projects” at Oko West, it cannot be the old, stale, story. The same stale tale of one government after another working smartly behind closed doors for royalty rates in the low to mid-single digits, and taxes that are so low as not to be worth the breath used in such disclosure.
We would be surprised if the royalties and taxes finalized for Guyana by the Government of Guyana are not another sellout, another one-sided deal following in the old pattern. There are these rich and rewarding gold projects in the deep interior, and all that citizens hear of are jobs, and infrastructure. The low-level, backbreaking jobs are what Guyanese have to show for the 4.3 million ounces of gold to be mined. The infrastructure to be carved out in the middle of the jungle is for the efficient operations of GMIN and to accelerate the movement of the precious metal to its foreign markets. When the PPPC Government cannot face Guyanese and proudly say that this is the package for 4.3 million ounces of gold, it is sufficient to reinforce beliefs that another cheap deal was signed. When things have to be hidden, there is some level of shame at the embedded weaknesses.
It is part of an ongoing leadership crisis in Guyana that begins with the governments in charge. Foreign investors can inspire their stakeholders with numbers that blow the mind, and narratives that have certain common ingredients, such as ‘world class’ and ‘one of the most exciting.’ But there are the Guyana Governments that cannot open their mouths and share with Guyanese how their treasures are managed. GMIN’s CEO Louis-Pierre Gignac can speak excitedly and at high volume about Guyana’s rich natural resources’ prospects, but he is not the first. There was ExxonMobil’s CEO, Darren Woods, and its Guyana Country Overseer, Alistair Routledge, who talk like champions. “Crown jewel” and “world class” and among ‘the most amazing deep water deposits’ in the context of oil in the Stabroek Basin speak of the supremely confident, one-in-a-lifetime winners. Before GMIN and gold, there was ExxonMobil and oil.
The people associated with both companies are dreaming big dreams. The tragedy is that those who own the wealth, Guyanese, have stopped dreaming. What is there to dream about, jobs and not the real money that these treasures represent? Investors are winners from cheap contracts, Guyanese keep on existing in the ranks of losers.
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