Canada-based Guyana Goldfields Inc has agreed to sell two of its mining properties here as well as its interest in another property for over US$6M as it focuses on its flagship Aurora Gold Project.
These transactions are in line with Guyana Goldfields’ policy to divest non-core assets in order to focus resources on the exploration and development of its key mining and mineral exploration properties, the Aurora Gold Project and the Aranka Properties, the company said in a statement on Tuesday.
Guyana Goldfields announced last month that it plans to open the largest gold mine in Guyana, with total investment pegged at $165 billion (US$826 million) over the life of the project in the latter part of this year. The Aurora Project along the banks of the Cuyuni River in Region Seven will be the first underground gold mine in the Guiana Shield. Production is set to begin in 2014 at the location. “Priority is being given to exploration targets that are viewed as possible satellite operations to Aurora. We have confidence in our baseline models and in the work that identified these exploration targets and we are excited to be able to drill test these prospects. We hope to discover additional and entirely new gold mineralisation outside of the Aurora and Sulphur Rose resources,” Claude Lemasson, President and Chief Operating Officer of Guyana Goldfields said in the statement.
It said that beginning in June, 12 drill rigs will be dedicated to the exploration of eight gold targets identified at Aurora and Aranka. These defined drill targets have been derived from 2-3 years of baseline exploration work consisting of radiometric, geophysical, soil and sediment sampling, trenching, and augering work.
Meanwhile, in the statement the company said that it has entered into an agreement with Guyana Precious Metals Inc. (GPM) for the sale of its Peters Mine and Aremu Properties in Guyana for a purchase price of US$2.4M payable in cash at closing. In a separate transaction, GPM has agreed to purchase GGI’s 70.1% participating interest in the Arakaka property, also located in Guyana, for a purchase price of US$3.7M payable in cash at closing and a 1% net smelter royalty in favour of GGI on the participating interest.
The statement said that closing of the Arakaka sale to GPM is subject to 30 day rights to acquire in favour of the current and former venture partners in the Arakaka property. Closing of the transactions is also subject to the receipt of all the applicable regulatory requirements, including receipt by GPM of the approval on the TSX Venture Exchange and the approval of GPM’s disinterested shareholders.
GPM is a Canadian based exploration and development company. The statement noted that Guyana Goldfields currently holds for investment purposes approximately 8% of the issued shares of GPM.
It was noted that the Peters Mine totals 8,358 acres and the Aremu Property totals 9,134 acres. The Arakaka property totals 79,074 acres.
Guyana Goldfields has been operating here since 1996. It is currently undertaking drilling and studies to advance and develop the Aurora Gold Project with a current measured and indicated resource of 5.34 million ounces of gold. An updated resource estimate will be released in August, followed by a Feasibility Study in the fourth quarter of this year.
At the Aranka Properties, currently in advanced staged exploration, drilling of highly prospective targets is ongoing. The Company discovered a gold deposit at Sulphur Rose containing an initial inferred resource of 460,400 ounces and plans to release an updated resource estimate in August 2011.
