Canadian-owned Guyana Goldfields Inc yesterday announced its fourth quarter and full year 2019 production figures showing total output lower than that of 2018.
The company which had last year seen a battle for control of the board, a plunging share price and a strike by workers, also said there will be an ore-supply gap of four to six months and it needs further financing for additional waste stripping at its open pit and for underground development.
According to a Guyana Goldfields release, gold production at the company’s Aurora Mine totaled 28,300 ounces in the fourth quarter of 2019, up 28% from 22,100 ounces in the third quarter of 2019 but down 28% from 39,100 ounces in the fourth quarter of 2018. For the full year of 2019, gold production totaled 124,200 ounces, down 17% from 150,400 ounces a year earlier.
Gold production includes 1,500 ounces for the fourth quarter and 1,600 ounces produced for the full year from the company’s underground project development which is considered pre-commercial production ounces.
The Aurora Mine mill’s throughput averaged 7,200 tonnes per day (tpd) in the fourth quarter of 2019, up 4.3% from 6,900 tpd in the third quarter of 2019 and up 1.4% from 7,100 tpd in the fourth quarter of 2018. For the full year, the mill’s throughput averaged 7,300 tpd, up 4.3% from 7,000 tpd in 2018.
Financing
The company also disclosed that while it previously anticipated generating sufficient working capital and cash flow to cover operating requirements through 2020, it acknowledges that this objective is no longer achievable and there will be a need for additional financing for the cost of additional waste stripping for the open pit and the development of the underground mine.
As such, management is actively exploring financing alternatives to provide additional balance sheet flexibility. While the evaluation of financing alternatives continues, the Company is concurrently conducting a review of strategic alternatives and has engaged RBC Capital Markets as its advisor for the review of strategic and financing alternatives.
“Gold output has been, and will continue to be, affected by an inability to achieve the aggressive waste stripping rates originally proposed in early 2019 as a result of very narrow pushbacks constraining and leading to small, congested mining areas,” said Alan Pangbourne, who became President and CEO on January 1, 2020. He added, “We continue to move toward the transition to underground mining, but we will need additional financing to cover a shortfall in cash flow from open pit gold production.”
The release said that the “Company has concluded that waste stripping needs to be suspended temporarily to allow ore production from the bottom of the current pit. Going forward, the Company now expects that ore production from the open pit mining will be interrupted for between four and six months, starting in the second quarter of 2020 and resuming at the end of the third quarter of 2020, as we focus on waste stripping”.
Underground mining
Underground exploration decline construction was advanced to 512 metres at year end, under the current construction permit issued by the Environmental Protection Agency (EPA). The company has submitted an updated Environmental and Social Impact Assessment to the EPA for the entire underground project as required and is confident it will receive the required environmental approvals from the EPA.
Guyana Goldfields also commenced trial mining of a test stope in its underground mine as allowed by its construction permit and expects to batch process this ore through the plant in the coming months.
The company assures that it has obtained the necessary governmental approvals to blast underground without restrictions, which once implemented should allow an acceleration in underground development, the release added.
The Company said that it remains on track for disclosure before the end of March 2020 of the results of its comprehensive mine, production and cost review. Roscoe Postle Associates Inc. is assisting with the review.
Having poured its first gold bar in August 2015, Guyana Goldfields’ investment here dates back to 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.
