The Canada-based Mahdia Gold Corp (MGC) says its local subsidiary has executed a term sheet with Republic Bank here for the equivalent of US$3 million in gold-mining equipment to be used at its Omai site.
The term sheet is expected to see the purchase, delivery and commissioning of equipment to be used in the mining of alluvial gold at Mahdia Gold Corporation (Guyana) Inc’s Omai property in central Guyana, a statement from the company said.
MGC has agreed to act as guarantor.
The statement noted that as announced in January, the company entered into an agreement with Roraima Investment & Consulting Services (Guyana) Inc to facilitate the expeditious process of alluvial gold recovery.
“Processing the alluvial gold is the first step toward the company’s longer term goal of placing a large gold recovery plant back on the existing foundations at the Omai mine site,” Andre J Douchane, President and CEO of MGC was quoted as saying.
“The signing of this term sheet is an extremely positive event; however, we continue to seek additional funding in an effort to advance the timeline on the feasibility work,” he added.
The company said preliminary engineering work is underway on a 250 tonnes per hour alluvial gold recovery plant.
“The plant is being designed based on recent alluvial test work completed on the majority of a previously identified 578 acre mineralized alluvial deposit. Both gold and diamonds were recovered during the test work; however, the diamond deposition is not yet understood,” it said.
The statement said the company’s ultimate goals are to become self-funding, complete a feasibility for rebuilding a large mill similar to what Cambior operated at Omai, and begin development of the deep higher grade mineralization.
“Management continues to look at all alternatives to finance and advance the general purposes of the company, and to further enable ongoing needed economic studies. Mahdia has received a number of financing proposals which management is currently reviewing.
The financing alternatives presented are in the form of debt, joint ventures, and equity solutions,” the statement said.
It also noted that the Board has accepted the resignation of Alan (Sheik) Zaakir as a Director and Officer of Mahdia Gold Corp. Douchane has been appointed a director of MGC, Mahdia Gold Corporation (Guyana) Inc and Mahdia Gold Services Corporation (Guyana) Inc.
In 2011, the Canadian company acquired the Omai gold mine for US$11.5 million to be paid over two years to the government.
The Omai mine was most recently held by IAMGOLD who acquired it from Cambior Resources.
At the time it was built, in the early 90s, Omai was the largest goldmine in South America.
In a period spanning 13 years, Omai produced some 3.7 million ounces of gold.
