Dear Editor,
I refer to Mr Fidel A Captain’s letter in your December 30, 2009 edition (‘Is the Guyana Gold Board the largest, most profitable government agency outside the GRA?’) and offer the following clarifications:
1) A revolving credit system is in place, where the Guyana Gold Board (GGB) take advances from the Ministry of Finance to purchase gold; and these advances are cleared with the proceeds from overseas sales. No interest is charged on these advances.
2) The GGB purchases gold at the London Daily Fix (ie, the am and pm fix). A deduction of $4.25 is made from the exchange rate, which is the average exchange rate of the six commercial banks. The GGB’s benefit from this deduction is dependant on the rate of exchange at the buying of gold and the rate received from the Central Bank on its proceeds from sales. For 2009 this benefit was between $1.13 and $1.94 instead of $4.25.
3) The GGB is mandated to purchase all gold offered in Guyana. The GGB inherits with the metal, all associated risks including price changes, the cost of the physical shipment and other costs. The GGB has not been empowered to engage in any extravagant investment of the metals (including playing the market).
4) While the 300,000 oz target set by the miners through the Guyana Gold and Diamond Association (GGDMA), is a noted achievement for small and medium-scale mining, gold declarations have been growing steadily since 2005; so did the profitability of the GGB. Reference could be made to the GGB annual reports 2005-2009 which are public documents.
We are happy that Mr Captain’s letter serves to help us explain the major part of what the Guyana Gold Board does.
Yours faithfully,
A Balaram
General Manager (ag)
Guyana Gold Board
