Addressing concerns of possible environmental impacts, President of Guyana Goldfields Inc (GGI) Scott Caldwell on Tuesday reiterated an earlier company promise that he would drink a Glass of treated tailings water from its Cuyuni mine to show that there was no threat.
He renewed the promise at a public forum held by the Canadian company at Herdmanston Lodge in Queenstown.
GGI in September inaugurated its gold mine and up to last week it had already surpassed 21,000 ounces of gold using a purification process that utilises cyanide.
Use of cyanide is especially sensitive here following Omai Gold Mines Limited’s 1995 tailings dam collapse which resulted in a huge amount of cyanide-tainted water spilling into the Essequibo River.
In recent weeks, a tailings dam collapsed in neighbouring Brazil leaving a number of persons dead and others missing and a trail of pollution which has triggered a fine from the Brazilian government and a lawsuit.
Caldwell on Tuesday called the cyanide use at the site “safe”, noting that the degradation of the chemical meant that the traces were kept to a minimum.
He said that the various environmental assessments and studies that have been conducted in the 16 years that Guyana Goldfields has shown an interest here have revealed that although the Aurora Gold Mine is along the Cuyuni River there is no connection with the river. Caldwell explained that “in engineering terms it is a very clean deposit”.
GGI’s President noted that an environmental baseline study was conducted and regular tests are compared to the baseline.
“One of the challenges working far off into the bush is managing all the hazardous material trying to bring them in, managing on site and taking them out”, GGI Vice President of Sustainability, Health and Safety, Reed Huppman acknowledged.
He stated that the company’s process in ensuring that cyanide contamination is improbable includes making certain that small traces of cyanide after detoxification comply with the specification for diversity of wildlife.
He said that Omai’s failures were over 20 years ago and the systems in place now are more rigorous. Huppman stated that GGI is different mainly in the fact that they treat the cyanide in the tailing pond and environmental assessments have revealed that the saprolite clay has made lining of the pond unnecessary due to the nonporous nature of the clay.
Huppman told those in attendance that the Environmental Protection Agency (EPA) goes into the site semi-annually to take their own samples and to check the dam. He said that while the EPA goes every six months the company itself monitors surface water and for leachates.
Adding to the safety precautions taken in dealing with the cyanide on site, Leigh Lackey, GGI’s Health and Safety Manager said that the mine has its own fire tender. He said that the containers used to bring in the cyanide adhere to all international requirements and the chemical is treated so it remains stable.
The company showcased its commitment to job creation noting that of its 676 employees, 649 were Guyanese nationals. With a 96% local workforce, company representatives noted that for the duration of the mine’s lifespan which is estimated at 20 years the company hopes to increase that percentage to 99.
The company poured its first gold bar in August and representatives said during the public forum that while the number of permanent jobs will likely decrease the job creation through corporate social responsibility will make a greater impact during and after the 20-year mine life.
For now the company’s president said that gold prices were on the decline noting that for 2015 GGI will not pay the 30% Corporate Income Tax. He noted that the initial investment so far was roughly US$300M.
Caldwell said that while corporate tax was not being paid this year, the company was still responsible for the 8% royalty per ounce paid out to the Government of Guyana while the price of gold remains higher than US$1,000 per ounce. He noted that should the gold price drop below that figure the royalty percentage drops to 5%, but royalties always have to be paid out along with VAT, payroll tax and excise tax on petroleum.
Providing a projected breakdown for the lifecycle of the mine, Caldwell said that potentially US$960M will be generated in revenue to Guyana of which US$341M could come from gold royalties.
GGI is on its way to achieving its 2015 production target of 30,000 ounces of gold. As of November 30, GGI has produced 21,093 ounces of which 14,091 ounces were sold at an average prove of US$1,084 resulting in US$15.3M pre-tax revenue. He noted that this has allowed the company to achieved positive cash flow. The mine projected initially that gold production can be anywhere between 30,000 and 50,000 ounces for 2015 and 130,000 to 150,000 ounces for 2016.
