Troy Resources has assets in Georgetown and government is looking to find those to levy on them, as it explores all avenues to recover the over $2.6 billion in debt the company owes this country, Vice President Bharrat Jagdeo yesterday said.
“We took charge of the area. Troy issues, there are lots. We hear they have assets in Georgetown here and we are looking for those assets…,” Jagdeo yesterday told a press conference, as he pointed out that Minister of Natural Resources Vickram Bharrat should ensure his ministry answers the media on questions pertaining to his sector.
On Monday night, government announced that the agreement with the Australian gold mining company had been cancelled with swift action taken to secure the Region Seven mining site.
The announcement followed a report the day before in the Stabroek News that Troy Resources appeared to have abandoned its Guyana operations without abiding by the terms of its agreement and for the reclamation of the area which was mined at Karouni since 2015.
This newspaper has been seeking responses from the Minister of Natural Resources, on not only this issue but others, to no avail.
In a statement at around 10 on Monday, the Ministry of Natural Resources stated that in light of Troy Resources Guyana Inc’s failure to remedy its default concerning several matters, inclusive of the outstanding royalties, rental fees, non-compliance with the work programme, and matters relating to environmental management, the government has taken necessary actions.
“The Karouni Mineral Agreement issued to Troy Resources Guyana Inc. (TRGI), Troy Resources Limited and Pharsalus Gold Inc., and the Mining Licence are now both cancelled and Terminated,” the statement said.
It gave a timeline for the key facts surrounding Troy’s presence here
● On October 16, 2014, the GoG entered into a Mineral Agreement with TRGI and other stakeholders, which centered on the development and operation of a mining project at the Karouni property.
● TRGI commenced operations with the first gold poured in November 2015.
● After a few years of mining operations TRGI reportedly encountered “operational issues and required organisational restructuring.”
● TRGI went into “care and maintenance” in early 2021 and despite commitments to resume its operations, the company failed to do so and even approached the government with proposals to liquidate its assets. This was rejected for several reasons including the fact that the payment of outstanding sums was not being addressed promptly under the proposal. However, the GoG remained engaged with a view to have mining restarted and outstanding debts settled.
● TRGI owes the government in excess of $2.6 billion for unpaid royalties. This substantial financial liability, coupled with other concerns, has led to the cancellation of the licence. The Office of the Attorney General has taken the necessary steps to have these sums paid.
● It is important to note that despite the Guyana Gold Board’s (GGB) disapproval and the suspension of TRGI’s exports due to outstanding royalties owed, the Ministry of Finance in 2019, under the former APNU+AFC administration took the decision to override the GGB export restrictions and thus TRGI was allowed to resume exports, hence the royalties owed to the GoG.
● Furthermore, the GoG learnt that Troy Resources had reportedly entered into receivership and initiated the process of liquidating its assets and holdings.
● The lack of management and abandonment of the site by TRGI led to the raiding of the mining lands, larceny of items, destruction of key assets, and a series of other illegal activities.
● A significant number of companies and sub-contractors are reported to be owed millions of dollars for goods and services provided and were awaiting payment from TRGI. We have seen reports of workers who were not paid for extended periods, these matters are engaging the Ministry of Labour.
● Cognisant of the above-mentioned information, the Government of Guyana has cancelled and terminated the Mineral Agreement and Mining License. Further, the Government has taken possession of the mining site and all remaining materials.
To date, the statement said that the government has taken proactive measures to ensure the Karouni mining site remains viable and does not fall into ruin. The GGMC, Corp of Wardens, Guyana Revenue Authority (GRA) and the Guyana Police Force (GPF) are all involved in the monitoring and enforcement patrols at the Karouni site, the statement said.
The collapse of this gold mining operation would be a major embarrassment to this administration as well as the preceding two. In 2014, the Ramotar administration had inked the deal with great expectations.
Troy Resources had commenced operations in Guyana in 2015 under the Granger administration in a blaze of high expectations and encountered major difficulties in October, 2019 after geologist, Ryan Taylor, died when the wall of the mining pit that he was working in collapsed. The then APNU+AFC government caused the mine to be closed for an investigation and hundreds of workers were laid off. The virtual abandonment of the operations under this government will raise numerous questions.
In November of last year, Troy Resources had announced plans to return to gold mining and production at its Smarts Underground Site in the fourth quarter of 2023 and had said that it was in the preparatory phase of its resumption timeline. The Australian mining company had also notified that it was revising its business model and was looking at an immediate capital investment of US$10 Million for its Karouni operations.
This was not to be and the company then advertised that it was liquidating its assets which prompted an August 11, 2023 report by Stabroek News that the company was closing its gold mining operations in Guyana as it did not find the market feasible anymore. It is unclear what action the Irfaan Ali government took between that report and yesterday to ensure that the company’s debt to the state was taken care or in the absence of that, legal action instituted.
President Irfaan Ali had told this newspaper that Guyana “will pursue all legal avenues,” when he had been asked about this matter last month.
But how government oversight agencies intend to tackle the contractual agreements relating to the environment and the statutory mine closure plan, remains unclear.
Government had said that it would not spare penalties in matters of pollution or destruction to the environment and as such the mining company would also face the full brunt of the law.
