Aussie mining firm Troy Resources Limited is accelerating preparations to start producing and selling gold from its large-scale Karouni Gold Project, Region Seven by July.
“The actual sale of gold is likely to start sometime in July with buildup of internal stock starting sometime in June, all contingent on the weather and the timely release of imported goods,” Ken Nilsson, the firm’s Executive Director – Project Development told Stabroek News.
He said that the company is accelerating assembly and construction of infrastructure and the processing plant. “The new camp is all but completed except for the installation of some kitchen and medical goods. Most material for the plant structural assembly is released and either on site or in transit,” the executive disclosed while adding that Troy currently has three assembly crews operating with a number of cranes and other support equipment.
Nilsson disclosed too that the gold stripping plant – a US$ 3 million part of the total circuit – is installed and being connected internally and contractor Raffik and Sons are completing the civil works while Wazim Contractors are completing the main administration, chemical assay laboratory and various smaller buildings.
He said the company’s plan to begin gold production by mid-year remains the same with sale of gold likely to start in July.
In terms of the current instability in the gold market and its impact on the company, Nilsson noted that the gold market is a major factor in terms of profitability and the ability to raise funds.
The increasing strength of the US dollar is a cause for major concern for those countries/operations which are tied to the US dollar, he pointed out, and citing Australia as an example, said that in terms of markets there, the increased strength in the US dollar has seen a corresponding weakening in the Australian dollar which balances out the negative effect of the gold price drop.
“For Troy the main issue has been the inability of the other Troy operations to support the Karouni project to the level planned and thus forced an increase in loan funding,” the Troy executive said while noting that the gold market is very volatile and small events such as activities in the Middle East like the beginning of air strikes by Saudi Arabia and its allies in Yemen last week trigger a quick price response. “These types of events are probably the only catalysts in today’s market,” he said.
In terms of challenges, Nilsson stated that there are numerous challenges operating in any country and in terms of Guyana, one of the areas which is difficult is the legislative framework dealing with the mining sector.
“I presume that the framework has always been focused on the small-scale mining sector, plus there is also a large amount of overlap between sections which is of some concern. I think the current administration is working well in terms of trying to overcome some of the problems but I suspect there is a need for some kind of legislative overhaul to streamline the processes,” he asserted.
In terms of employment, the Troy executive said that at the moment, the company has approximately 300 employees on site with additional contractors, this will increase over the next month as assembly increases, he added.
Troy has proposed a medium-scale gold mine designed to produce up to 110,000 ounces of gold per annum based on an average overall recovery of 92% at the Black Water Creek, Kaburi Area, in Region Seven. The mine will be focused on the recovery of ore for processing from Smarts and Hicks gold deposits. The project components include an open cut mine, processing plant, tailings storage facility, mine site accommodation and additional infrastructure required to recover and to process ore for the recovery of gold.
For the past few years, gold has been a mainstay of Guyana’s economy and the precious mineral is the largest earner of foreign exchange but declarations from small and medium scale producers are on the decline after miners, confronted with a variety of factors including a drop in gold prices, exited the sector.
Gold declarations for the first two months of this year have plunged by almost 40%, according to data from the Guyana Gold Board and with less gold being exported earnings have also dropped significantly. Gold declarations and earnings have been on a downward spiral since last year following a record high in 2013.
However, two large scale gold operators –Troy and Guyana Goldfields – are set to begin gold-recovery operations this year and this could likely mitigate the impact of the drop in declarations from small and medium-scale producers.
