Canadian-owned Guyana Goldfields Inc (GGI) on Tuesday terminated the services of over 160 employees and plans to continue to reduce its approximately 530-member workforce over the next few days as it prepares for a takeover by Canadian silver miner Silvercorp.
“It was a sad day yesterday because about 160 persons received their termination letters and at a time like this with COVID-19, it is even sadder,” a source told the Stabroek News.
Last week, this newspaper reported that the company had informed the employees of the Aurora Gold Mines (AGM) that a significant number will be made redundant since the size of the workforce will be reduced over the next month to facilitate a transition from open pit to underground mining.
While the exact number of workers affected is still not known, sources familiar with the company have estimated the number to be in the hundreds.
“It could be as many as 85 per cent of all employees and we have about 530 employees most of whom are Guyanese. We do not have the final number, so it could be lower or higher,” Senior Vice President of Strategy and Corporate Affairs, Perry Holloway, had told this newspaper.
The company had also indicated earlier this month that it will advise on the timing and positions impacted but explained that the reduction in workforce is expected to take place between mid-May and the end of June.
According to sources, while employees had anticipated the termination and had accepted severance packages months ago, being given the letters made for a solemn atmosphere with many contemplating their next move given the current impact of COVID-19 on employment locally.
“Some persons cried and it was just a sad atmosphere. Most persons were left questioning what they will do now because there are not many job opportunities and that is further complicated by this COVID,” one source said.
The novel coronavirus has hit the company’s operations adversely since the workforce for this year had been sustaining itself on open pit mining while it waited to transition to underground mining.
But when COVID-19 restrictions were announced in March, the majority of the company’s expatriate management opted to return home. This meant that the entire operation had to be closed and locals forced to also go home and await a decision.
In a memorandum signed by Chief Executive Officer Alan Pangbourne, GGI had stated that as part of its transition from open pit mining to underground mining there will be an interruption in operations at the Aurora Mine site in the Cuyuni/Mazaruni and a reduction in the workforce.
“This reduction in the workforce will take place at all levels including both national and expatriate employees as the company will transition its mining operation into a state of Care and Maintenance for an undetermined period,” the memo states.
It says that the “undetermined” timeline results from multiple factors including financial conditions, COVID-19 issues, travel restrictions, and pending approval from Guyana’s Environmental Protection Agency of their Revised Environmental and Social Impact Assess-ment permit for underground mining.
Pangbourne has also stated that these reasons have made it impossible to ensure business continuity explaining that the company has reached the point where it needs to institute manpower adjustments.
He explained that the company will follow the Termination of Employment and Severance Pay Act and will make those positions which are no longer needed redundant.
“Those of you affected will be paid their statutory notice period and severance entitlements in keeping with the Act. This will include recognition of your years of service with AGM, as applicable. We will ensure that each of you will be treated in a respectful and thoughtful manner,” he promised.
According to Holloway, the company is running out of gold in the open pit mine making the operation unprofitable.
‘We need to go to underground mining [a transition which] depends on financing and COVID-19,” he said, adding that because of the pandemic the underground exploration was halted in March.
This aspect of the statement has found favour with the National Mining Workers’ Union (NMWU) which holds a certificate of recognition from AGM.
According to President of the Union, Sherwyn Downer, if AGM does properly compensate the workers, NMWU will be satisfied for now.
“We accept this as opposed to having workers’ years of service with AGM roll over to Silver-corp metal without a guarantee or mechanism to protect the employees’ years of service. We however would like to see them given first preference for re-employment in the new mine,” he explained.
This announcement that AGM is moving into “care and maintenance” comes a mere two weeks after the disclosure on April 26 that Canadian silver miner Silvercorp Metals Inc was moving to buy GGI.
According to a press statement from the two companies, they have entered into a CDN$105 million definitive agreement whereby Silvercorp – with China-based silver mining operations – will acquire all of the issued and outstanding shares of Canadian gold miner, Guyana Goldfields, by way of a plan of arrangement under the Canada Business Corporations Act.
