Having taken control of the lands and assets of the Australian company which left its Region Seven mining site without notice and owing royalties to the state, the Government of Guyana yesterday said it has begun distributing small claims to local miners.
Minister of Natural Re-sources Vickram Bharrat yesterday announced that so far some 50 local miners have been given small claims on the site with others pending soon.
In addition, sources say that the power generation plants on the Troy Resources Inc facility at Karouni will now be moved to the Onverwagt Power Station for use while other assets such as the gold processing mill and machinery remaining will be sold to recoup some of the funds owned.
“We were expecting Troy Resources to restart production and to offset liabilities to the government, however, we know what would have happened to the company. What we are doing as a government is, we have identified areas in the former Troy Resources property and we are allocating claims to some Guyanese small miners. To date, we have awarded 50 claims to local miners,” Bharrat yesterday told a press conference.
He said that the “process is being done by way of a lottery so it is a fair process. Many of them have already moved into the area and mobilized.”
The Minister informed that it is planned that the Guyana Gold Board will establish a presence there so that the miners can easily sell their gold to the GGB.
“In terms of the value of the property and what we would have acquired. Again, it is a multi-agency approach. The GRA (Guy-ana Revenue Authority) is involved in it. We know that the GRA would have secured a number of assets on site and in containers. The GGMC has taken over the site with the processing plant,” Bharrat said.
Vice President Bharrat Jagdeo has said that his government accepts that it is partially to be blamed for waiting to collect on royalties from the company. But he was quick to point out that the company had the bulk of the royalties that was owed during the 2016 to 2020 period when his government was not in office, coupled with the facts that the company had already ceased mining.
“I am accepting that we probably dropped the ball too,” Jagdeo told a press conference on Thursday.
Up to 2018, he said that the royalties owed had totalled $1.5 billion and that 2019 and 2020 had to be added to that sum. “So that is the bulk of the money already made there in unpaid royalties in 2018”, he contended.
And when the PPP/C took office, he said that it had faced issues such as COVID-19 and finding health solutions which were paramount at that time.
Currently, Jagdeo said that government was searching for assets owned by the company.
A high-value asset of the company is a US$5 million grinding mill the company had bought in 2014. When it was bought the company called it a milestone achievement, both for itself and the development in Guyana.
The Natural Resources Minister had told this newspaper last month that “The government of Guyana has taken possession of the entire property, including the processing mill/plant, camp site… et cetera.”
However, he pointed out that the property was vandalised after Troy’s unpaid security had abandoned the site.
On October 16th, 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.
Aside from royalties, Troy has also departed without fulfilling its mine site obligations and reclamation of the area. These also have a significant cost attached.
At the height of its operations, Troy employed hundreds of workers and produced thousands of ounces of gold per annum.
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 after a cave 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.
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.
