For last year, Mohamed’s Enterprise was the dealer who declared the highest amount of gold of 155 800 ounces, according to the Guyana Gold Board’s General Manager’s report which says that the agency will have audits of licensed gold dealers and traders.
Total gold declarations for 2015 were 450, 873 ounces and of this figure, the ten active licensed gold dealers declared 289,385 ounces. Mohamed’s Enterprise led and was followed by El Dorado Trading, Pure Diamond Inc and Osaka Resources Inc which declared 99,777, 12,385, and 7,940 ounces respectively.
The report also outlined the agency’s work programme, with the highest cost being the procurement of a vehicle for the general manager Lisaveta Ramotar at $28 million.
In terms of other elements of the work plan, the report said that it is important that there be enhanced efficiency at the laboratory. It noted that the lab is central to the overall operations of the GGB because it is where the metal is bought, sampled, smelted and then shipped.
It highlighted the need for maintenance of the Mercury Abatement System (MAS) at a cost of $3.3 million. “For the health of staff and the general public that live or work in close proximity to the GGB, it is important that the MAS be maintained. Maintenance work has been sporadic. A full maintenance is required of the system,” the report said,
It also pointed out that the lab needed to be refurbished at a cost of $2.7 million. “The burning rooms and roof of the laboratory requires refurbishment and rehabilitation. Further there is a need to further modernise the laboratory work environment,” the report said.
It noted the need for formal training for lab technicians. “Currently the lab technicians do not undergo any formal training, instead they learn through interactions with other colleagues. At this time it is proposed that head of lab and assistant head of lab conduct one-on-one training based on the requirements of the Standard Operating Procedures (SOPs),” the report said while adding that the cost would be minimal to zero.
It also highlighted the need to digitize density computation. “Currently the density is computed using dry and wet measurements. The scale that computes the density only reads to 2 decimal places which is not effective for smaller weights. Additionally, the current process of inputting density information …allows for human error since one technician has to call out weights for another to input. It is proposed that firstly scales be procured that allows for readings to more than 2 decimal places and that the recording of the weights be computerized,” the report said. It noted that the expected cost for this retooling is $3.2 million.
Security system
Further, it called for improvement of the security system for the lab. “It is being proposed that the entire security system for the lab be revised allowing for an additional layer of security – a computerised system that allows for alerts for unauthorised entry,” the report said while adding that the total cost is estimated at $2 million.
As it relates to finance, the report said that the finance function of the GGB needs to be streamlined. It disclosed that for the upcoming period the Finance department will improve its operational efficiency by segregating the finance and operational function and a Gold Purchase Management System (GPMS) will be introduced. “The GGB has started a process of revising the GPMS system, allowing for enhanced security and audit of the system as well additional reporting requirements. It is expected that this new system (will) be installed by the end of the first quarter of 2016,” the report said.
It also noted that the GGB wishes to move towards being fully International Financial Reporting Standard (IFRS) compliant and this is estimated to cost $2 million for the necessary manuals.
Further, the report said that there is need for procurement of equipment for improvement of the GGB’s investment function. “Part of the GGB’s Mandate is to conduct investment activities – among the most basic, trade gold for the CRG. Currently many trading and investment decisions are ineffective because they are only based on publicly available information which generally are already generally built into the current market price. The GGB must make more effective trading decisions. As such, it is proposed that the organisation procures Bloomberg Professional Service, allowing the GGB to trading decisions based on real time information,” the report said. It cited a cost of $4.2 million in this regard.
Among other costs, it cited the procurement of furniture and fixtures namely three chairs and the installation of lockers for accounts staff at a cost of $1.9 million, a fax machine for the Bartica Office at a cost of $75 000 and the procurement of a vehicle for the General Manager at a cost of $28 million.
Internal audit
In terms of its internal audit functions, the report said that this must be strengthened. “Internal Audit believes that the Standard Operating Procedures needs to be a living document – compared against actual operations and updated and strengthened to prevent loopholes. As such, it will make quarterly pronouncements on the SOPs to the Board,” the report said. It also noted that in order for this to be achieved, the audit department plans to move to a full activity based audit reporting.
The report also said that in order to strengthen the Audit unit, the GGB plans to retain a senior internal Auditor – Finance. Further, there will be a separation of the operations and the financial aspects of auditing. It noted that there will be quarterly financial auditing of licensed dealers.
The agency also plans to strengthen its functions and plans to conduct training of staff and dealers. “The Anti-Money Laundering Act has given the GGB supervisory authority over dealers. To this end the compliance department plans to conduct training for staff as well as dealers of the requirements under the act and activities and reporting standards that would be required for them (dealers) to undertake to be compliant with the Act,” the report said.
It also noted that the GGB was appointed as the supervisory authority for the gold trading industry. This would mean that compliance activities needs to be extended to those with the GGMC Gold trading licence and it said there will be audits of licenced gold traders.
The report also noted that there is no formalised procurement process and the GGB plans to develop a procurement manual (to be approved by the board). The manual will be strongly influenced by the current procurement Act.
It also noted the agency’s intention to collaborate with the Guyana Geology and Mines Commission (GGMC). “In order to reduce under-declaration it is important to understand the potential of mines/dredges as well as the efficiency with which they operate. GGMC would have this information; as such GGB plans to work closely with the (GGMC) to ensure that gold mined is declared,” the report said.
The government has said that there is rampant smuggling of gold – as much as 15,000 ounces per week.
Purchases of gold by the GGB declined by a whopping 20.5% last year over 2014, according to information contained in the Report. The Report says that last year the GGB purchased 146,158.3 ounces of gold compared with 186,894.1 ounces in 2014.
