Guyana Goldfields Inc (GGI) yesterday announced that its mill commissioning for the Aurora Gold Project in Cuyuni/ Mazaruni has started and it remains on track for initial gold production in mid-2015.
Project construction overall is approximately 85% complete and the company said in a statement that it is focusing on operational readiness training and commissioning. GGI says it has begun the commissioning of the following areas:
* SAG Mill
* Power Plant
Generators
* Water and Air Support
Systems
GGI will be the first large scale miner to begin producing gold in the aftermath of Omai Gold Mines Limited in 1993. It will come at a time when gold output from local small and medium-scale miners has been falling due to lower international prices for the metal and other issues.
The commissioning phase will continue during the second quarter of this year and the company says it is in the process of completing the remaining piping, electrical and surface conveyor construction. GGI said it is also on track to start up the gravity gold and saprolite production circuits for mid-2015 which would allow for earlier gold production (pre-commercial production) through the processing plant. The commissioning and start-up of the hard rock crushing circuit is projected to be finished in the third calendar quarter of 2015.
The company said that the mining fleet is fully operational and all materials required for construction are on site.
“All surface and on-site construction and bulk earthworks are completed except for the river dike and runway expansion. The Company is currently operating at peak construction and manpower levels with over 1,000 personnel at site. The operational readiness team has been hired and undergoing initial training”, company stated.
Initial open pit mining at Rory’s Knoll has scoped the pit outline and there has been excavation below the Cuyuni river level with no in-flow of water, as expected.
The Company reiterated that it expects to produce between 30,000 ounces to 50,000 ounces of gold in 2015 and approximately 120,000 ounces to 140,000 ounces of gold next year.
GGI says it has approximately US$44 million as at March 31, 2015 of capital expenditures remaining to projected initial production. It said that the total initial development costs for all facilities as well as mining equipment, owner’s costs, indirect costs, etc., remains projected to be US$249 million. GGI said that the project is tracking on budget with US$52 million available as an overrun facility, if required.
Scott A. Caldwell, President & CEO, commented, “The commissioning of the mill circuit is a major milestone which we’ve been able to deliver on schedule and brings us one step closer to initial production.
I am proud of what our team has accomplished in just a little over a year. The energy at site is vibrant and I would like to thank all our employees and contractors for their dedication and excellent work… Our next focus is producing ounces at or above our target for 2015 gold production and join the ranks of producers.”
In March, the company had said that as of December 31 last year, it had incurred US$172 million of the approved budget of US$249 million, with US$77 million remaining in capital expenditures in order to reach commercial production.
Guyana Goldfields is a Canada-based mineral exploration company which is focusing on the exploration and development of gold deposits in Guyana. The company has been operating in Guyana since 1996.
According to the plan for its Aurora Gold Project, the mine is designed to produce 3.29 million ounces of gold, averaging 194,000 ounces per year, over an initial 17-year mine life.
The company is the second that will begin large-scale gold production this year.
Australian mining firm Troy Resources Limited is accelerating preparations to start producing and selling gold from its large-scale Karouni Gold Project in Region Seven by July.
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 some 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.
On October 5, 2011 GGI had announced that it had clinched a Memorandum of Understanding with the government for the Aurora Gold Project which sets mining royalties and paved the way for a mining licence.
The MOU had set out the key terms of the Mineral Agreement, also known as a Fiscal or Stability Agreement.
It said that significant among the terms of the MOU are:
-Mining royalty of 5% on gold sales at a price of gold of US $1,000/oz or less
-Mining royalty of 8% on gold sales at a price of gold over US $1,000/oz
-Corporate income tax rate of 30%
