The company has reported that it has hired St. John Lees, former area manager infrastructure for Rio Tinto’s massive Simandou iron ore project in Guinea, West Africa, as vice president for projects. A report on mining.com said that despite the hiring of Lees-who was described as a “heavy hitter” – and rumours of being a possible takeover target of IAMGOLD, Guyana Goldfields stock remained in a slump. On the whole the mining sector was generally weak last week, the report said.
Meanwhile, last Wednesday, Guyana Goldfields announced that it raised CDN$31.7 million through a private placement deal. The company issued 10.9 million common shares at a price of C$2.91 per share. The Baupost Group LLC, a Boston, Massachusetts-based institutional investor, purchased 7.9 million shares for approximately CDN$22.9 million in aggregate proceeds. Baupost now holds approximately 18.5% of the outstanding shares, and has the right to appoint an independent director to the Company’s Board of Directors.
In addition, the statement said, funds managed by Franklin Advisors Inc. purchased 2.5 million shares and Patrick Sheridan who serves as the Chief Executive Officer and interim President and Chief Operating Officer of Guyana Goldfields purchased 500,000 shares.
Following the closing, Franklin and Sheridan held approximately 11.2% and 5.8% of all of the issued and outstanding shares, respectively, the statement said.
The company said that the proceeds will be used towards the strategic plans for 2012 and to continue exploration of its portfolio of gold exploration properties here. The Offering remains subject to the final approval of the Toronto Stock Exchange.
The company’s Aurora Project here will be the first underground gold mine in the Guiana Shield. Production is set to begin in 2014 at the location along the banks of the Cuyuni River in Region Seven.
The company has said that it is looking to produce 250,000 ounces of gold per year in a combination open pit and underground mining and expects that this will increase as further studies are done.
Initially, surface and open pit development is expected to commence in quarter two of 2012 for 24 months while open pit production is expected to begin in quarter two 2014 and carry on for eight years. Open Pit Mining is expected to include six pits within a square mile, with bottom depths varying from 70 to 315 metres.
Underground development is scheduled to commence in 2015 with commercial production expected to commence in 2019 and will carry on for 16 years. Average annual gold production for years two to nine is expected to be about 250,000 ounces.
Guyana Goldfields has been operating here since 1996 and has invested $17 billion in exploration from then up to 2010.
