The Republic of Guyana, a South American nation based on the northern coast of the continent, is not, for want of a better term, a household name. But then again, nor are many of the world’s best kept secrets.
A former British colony for a little over two centuries until it achieved independence in 1966, Guyana’s landscape and spectacular bio-diversity – its otherworldly beaches and sweeping savannahs, and the peaks and plateaus of the Guiana Shield that thrust out into the sky above the canopy of the lush rainforest that blankets the land around it – showcase the beauty of nature at its finest and most unspoiled. Guyana’s natural gifts have provided the foundations upon which a thriving eco-tourism sector is emerging, but as the miners who have entered the country in recent years have found to their delight, Guyana’s natural gifts are as bountiful below-ground as they are above.
Guyana Goldfields, one of Canada’s most promising up-and-coming junior miners, has discovered first-hand just how extraordinarily mineral-rich the Guiana Shield region is – an area stretching across tracts of territory in Guyana, Suriname, Venezuela, and Brazil. It is here that the company’s flagship project, the Aurora Gold Mine, is based, and make no mistake about it – in finding, and then developing the site over the years since, Guyana Goldfields have struck gold.
“We announced commercial production Jan 2016, and last year (2016) represented our first full year of production with just over 151koz of gold. It’s been a great accomplishment and we’re pleased with the progress we’ve made thus far,” said Scott Caldwell, Guyana Goldfield’s President & CEO. He continued: “We also started 2017 off strong by producing just over 40koz in Q1’17 while maintaining an excellent health, safety and environmental track record with over 3,000,000 hours accumulated without a lost time incident.”
Such considerable output from what is a truly world-class gold asset signals Guyana’s return to the top table of global gold mining. With estimated reserves in excess of 3.2 million ounces to be mined over an initial 15-year lifespan, Aurora presently yields in the region of 150,000 ounces of gold per year on average. However, these figures, impressive as they might be, don’t tell the full story for one simple reason: they are conservative in nature, and don’t take into consideration vast, as of yet untapped ore reserves onsite, nor an expansion of Aurora’s processing facilities that upon completion will greatly increase production capacity.
“We have ore reserves of 3.2 million ounces of gold, all very high-grade at approx. 3 grams. Then there’s additional resources that could potentially ramp up reserves to around 8 million ounces – we have a further 5 million ounces where we need to do more drilling and technical work to expand accessible ore reserves. But right now we have a 15-year mine life, although in reality, its lifetime could last a lot longer than that. We’re expanding the plant at a phenomenal rate from around 150-160,000 ounces to about 220,000+ ounces per year – we’ve just started that expansion, which will be a $42 million project and completed by early 2018.
Constructed on-time and on-budget at a cost of US$250 million, Aurora Gold Mine’s credentials place it firmly in the world-class category, and signals Guyana’s return to the top table of big-ticket gold producers. However, as Caldwell mentioned, what’s most exciting to Guyana Goldfields along with its investors is that this already top-tier asset hasn’t yet come close to realising its potential. Indeed, realising this potential is the company’s foremost goal, and Guyana Goldfields is set to commit to a $6-8 million per annum spend on exploration and drill work which will not only incorporate brownfield work on the Aurora site but true grassroots greenfield exploration amongst other targets within their vast portfolio of assets in Guyana. Such a considerable outlay, along with the $42 million that has been set aside for the mill expansion, is a statement of intent on the part of Guyana Goldfields.
Technically speaking, Guyana Goldfields is, for all its strengths, a junior miner, but Scott and the rest of the team have far greater aspirations. And critically, the means are there to achieve organic growth through the drill-bit, mill expansion, and exploration, which will in-turn deliver a sufficient enough production increase to see Guyana Goldfields rise to the next level.
On this, Scott told us: “We believe, or at least hope that we’re going to find another deposit that will require us to build a new, second mill, and the goal is to organically grow from 220,000 ounces to maybe 300-400,000 ounces. But we’ve got to get drilling, then we’ll know if we’re going to be truly successful. There’s a lot of targets, we know there’s a lot of gold in the region, the question is can we find it and put it into production? If we do and we continue achieving organic growth, we can go to the next level and become the next mid-tier producer.”
In terms of capability and expertise, there is little doubt that the Guyana Goldfields team have the means and resources to achieve this. However, what is undoubtedly one of the most fascinating and reassuring attributes of the company is that there is a commitment to getting to the top the right way, and to becoming one of the sector’s premiere mining companies without compromising the environmental integrity of Guyana in any way. Once upon a time, the gold mining sector had a poor reputation that, due to incompetence and malpractice, was well-deserved in many instances. Times have changed, however, and such negligence on the part of the mining sector is for the most part now an unpleasant chapter in history, but understandably a distrust of the sector lingers, especially in the minds of the Guyanese who remember the Omai disaster in 1995. With this in mind, Guyana Goldfields has set-out to make itself a valuable and conscientious component of the Guyanese economy that not only contributes wealth to the country’s national coffers, but also invests in sustainable objectives that increase the quality of living for the Guyanese people as a whole.
In every fibre and sinew of the company can be found an overarching commitment to going about mining operations in a socially and environmentally responsible manner, as Scott was keen to iterate: “Our focus and efforts on CSR and sustainability is engrained. The company’s CSR Strategy, Community and National Initiatives target areas locally within our communities, and also on a national level that promote sustainable development in Guyana. We do a lot of work with children, in terms of investing in and supporting educational efforts, and we also work with a number of indigenous communities on various initiatives. We invest in and support schools and offer transportation to help kids get to school, which can involve helping them travel by bus or by boat. Offering opportunity to children with a view to building a better future has been a central focus of ours.”
Through building relationships with local communities and taking great stride in operating in a conscientious manner to eliminate any negative social or environmental impacts, Guyana Goldfields is winning hearts and minds. As they have shown, it is possible to marry commercial success with a socially and environmentally responsible approach to doing business. Business is booming, and with gold prices continuing to rise it would be safe to say that over the short to medium-term, at least, the marketplace looks buoyant.
When asked about what’s next for the company, Scott concluded: “We’re very happy working in the country, and we’ve got a great working relationship with the government and the local communities there. It’s a very friendly and supportive country to do business. On the operations side – the mine is performing well, as is the mill and the processing plant. Our next focus is on the mill expansion which will bring our overall annual production from 150koz of gold to over 200koz. Alongside that, we’re also focused on organic growth through the drill bit and ramping up our exploration efforts to hopefully find that second mine”.
We also have a strategic investment in a company called Solgold PLC, a team that is based out in Brisbane, Australia. It looks like they’ve found a huge porphyry copper-gold system in Ecuador that looks very promising. Following our investment, we at Guyana Goldfields own about 7.2% of the company – clearly as far as strategic investments go, it’s done quite well. All in all everything’s looking pretty good. Things are going great at Aurora and our strategic investments are looking pretty good for us.”
Having worked with Guyana Goldfields over the years and having observed the company’s growth and development, it is hard for us not to share Scott’s optimism.
