In addition to part of the former Troy Resources mine going to some 50 small miners, the government is in the process of having a local consortium formed to work the main mining pit, President Irfaan Ali announced as he urged local businesses not to be afraid of forming partnerships.
“Recently, when we were faced with the challenges of Troy Resources, everybody came and complained. I said, ‘Where is the opportunity in it? Why don’t we get all the small and medium sized miners together. Let’s form a company and let us do this now, with the resources and technical capacity that we have’,” the President told the Private Sector Annual Dinner and Awards last Tuesday.
“We have now put together a group and they are working on it,” he added.
Asked to expound on the President’s announcement, Minister of Natural Resources Vickram Bharrat told the Stabroek News that the plan was to have two separate groups work the Region Seven area that the Australian company once occupied.
“It’s 50 small miners at Troy working independently and also a consortium is being established to work the main pit at Troy,” he explained. The President was referring to the latter.
He further explained that the 50 small and medium-scale miners would “form a consortium.”
On October 16, the government announced that the agreement with the Australian gold mining company had been cancelled, with 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 (including payment of royalties) and reclamation of the area which was mined at Karouni since 2015. These have a significant cost attached.
At the height of its operations, Troy Resources employed hundreds of workers and produced thousands of ounces of gold per annum.
Troy Resources had commenced operations in Guyana in 2015 in a blaze of high expectations. It encountered major difficulties in October 2019 after geologist Ryan Taylor died when the cave 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 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. On August 11, 2023 this newspaper reported that the company was closing its gold mining operations in Guyana as it did not find the market feasible anymore.
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 has been distributing small claims to local miners.
In addition, sources said 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 owed.
“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…,” Bharrat told a recent 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 mobilised.”
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.
“In terms of the value of the property and what we would have acquired. Again, it is a multi-agency approach. The GRA [Guyana 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 [Guyana Geology and Mines Commission] has taken over the site with the processing plant,” Bharrat said.
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.
Bharrat had told this newspaper, in October, “The government of Guyana has taken possession of the entire property, including the processing mill/plant, camp site… etcetera.”
However, he pointed out that the property was vandalised after Troy’s unpaid security had abandoned the site. It is unclear if that mill will be a part of the deal with the local consortium. Also unclear is if the group will partner with foreign investors to work in the main pit.
During his address, the President underscored the importance of partnerships in building businesses and investments.
He advised local business persons to not be scared to form consortiums and take the risks to invest, as a country like Guyana where the economy is continuously growing and investors are flocking, they are sure to have positive results.
“Scale is important in business. Scale is very important and sometimes you believe that you are giving up when you are partnering but you are not really giving up; you are expanding your own scale. And when you expand your own scale you are expanding your own business model and market and it allows for a number of benefits,” the President said.
He pointed to successful mega investments with consortiums and their results as he urged locals to take advantage of the opportunities. The Tacama soya bean project, Vreed-en Hoop Shorebase and Offshore catering services were the examples cited.
