Approximately 300 employees of Troy Resources Guyana Inc. were notified of their dismissals yesterday following a decision by the board of the Australian company as it seeks to find a way to restart operations.
A memorandum issued from Managing Director and Chief Executive Officer Ken Nilsson said the board has decided that all personnel currently stood down will be terminated as from this week.
“This decision was made with reluctance…,” Nilsson said, while noting that the company will assist employees by providing a termination pay out, which is expected to be paid by November 22nd.
“It is expected that Troy will go back to re-hiring employees as needed for a start up in the near future and Troy hopes most current employees will be available and willing to return to work,” Nilsson added.
In September, the company had 450 employees. It suspended more than 300 on October 15th, while keeping 137 on for exploratory operations.
Under local laws, a company is permitted to stand down the workforce without pay for up to six weeks by invoking force majeure, which Troy has done, but those six weeks would have ended next Monday.
According to the memo, the lack of income over the last six weeks has “clearly damaged the company,” which is looking to “secure financial support” as a return to profitability is paramount.
Operations at the company came to a halt after it was issued with a cease order on October 10th by Minister in the Ministry of Social Protection with responsibility for Labour Keith Scott following the death of geologist Ryan Taylor.
Taylor died on October 8th while working on the construction of a “bench” in a mining pit. A slippage occurred, which led to him falling and being covered by the rubble. The report on that death has not yet been concluded by the government and the company has said that while it has done its own, it will await the government’s findings.
On October 15th, Minister of Social Protection Amna Ally rescinded the order but Troy suspended operations after what it said was the knee-jerk reaction by Scott.
In a statement on the same day, the company had said that the cease order came as a surprise since the ban included all mining areas rather than isolating the area where the incident occurred.
It argued that the stop order was inconsistent with normal protocol in such situations. Normal protocol, it argued, is to cordon off the area of the incident, being the Hicks 1 Extension Trench, a process the company had already undertaken immediately after the death. Having taken this action, Troy expressed surprise at the cease order, which covered all mining areas, including the Smarts 3 and Larkin Pits, which are not where the fatal accident occurred.
Sources told Stabroek News that the company petitioned government for a reprieve after explaining that a cease order would mean that its entire operations had to be halted.
Last week during a tour of its Karouni mine in Cuyuni/Mazaruni, Nilsson, told reporters that the company would end the status quo following a board meeting on Sunday.
“Doing nothing is not a particularly good… because where we are is costing us about US$40,000 per day and no one can survive spending that money every day without getting an income and obviously we can’t afford that, so a decision is critical,” he added.
Nilsson said that to get back to all three stages of operations would require input of “about ideally US$5 million but we work with about US$4 million per month.”
However, he explained that it was not sustainable and a plan had to be worked out to look at the business interests of the company, lest it starts falling into deficits and becomes unsustainable for future operations.
According to him, while the cease order did not help matters, the company had been struggling for months.
“Over the last six months the company has struggled because of very poor developments and we need to get some of our resources back into production. If I was the way most people are, I would have terminated about 100 persons about three months ago. I chose to keep them on and paid the penalty; paying wages to people who were not really working. Everybody that works here knows this. Everybody was expecting to get laid off but I didn’t do that,” he said.
“We have had more people than we need but we need those people to do our other creek [and other operations] so that is where the juggling comes in. If you have a business and it shuts down, you have to have a good business plan to open back up. That is what we have been working on for the past three weeks for the Board. I think we have a business plan to make sense and that is what we are putting for the Board to approve,” Nilsson added.
In 2013 the company bought the Karouni project from another Australian company, Azimuth Resources Ltd, and had been operating it since.
Troy’s third quarter 2019 gold production figure was the lowest in recent quarters, according to the company’s report. The output for the June 2019 quarter was 11,567 ounces, for the March, 2019 quarter 13,333 ounces and 14,227 for the quarter ended December, 2018. The third quarter of 2019 gold output was 10,042 ounces.
Gold sold for the last quarter was also sharply down. The Troy figures showed that gold sold by the company amounted to 8,783 ounces compared to 12,545 ounces in the preceding quarter. For the quarter just ended, Troy’s All-In Sustaining Cost (AISC) was US$1,374 per ounce while the gold price realized was US$1,465 per ounce.
While he would not go into detail, Nilsson said that a local group here has seen it being put under pressure. “The problem is we have had a lot of pressure on Troy from certain interest groups that had been attacking from every conceivable quarter, and that is as much I would like to say. That put us under a lot of pressure and they also have a lot of good connections within government,” he said.
