Blog Post

12 Mar
By: MOF Communications Unit 0

International mining companies to invest millions more in Guyana

Several Canadian mining companies operating in Guyana have pledged to invest tens of millions of US dollars in expansion projects here. This announcement was made at the just concluded Prospectors and Developers Association of Canada Convention (PDAC) held in Toronto from 4-7 March, 2018.

The annual PDAC Convention is regarded as the premier international event for Canada’s mineral exploration and development industry.

Scott Caldwell, Chief Executive Officer of Guyana Goldfields Inc., the largest foreign gold mining company in Guyana, announced that the company plans to boost annual gold production to 300,000 ounces by 2022 with the introduction of underground mining. He highlighted his company’s corporate social responsibility record which includes on-going training and development of the Guyanese workforce.
Caldwell pointed out that the Government of Guyana receives eight per cent royalty of all the gold mined and added that the company’s on-going expansion augurs well for Guyana, its shareholders and stakeholders.

Guyana Goldfields Inc. has spent approximately US$50M in the local economy over the years in the areas goods and in services such as hauling of freight, engineering, and contract mining.

Rich Munson, Chief Executive Officer of Sandsprings/ETK, which has acquired the Toroparu Gold Project,said that this undertaking is the number two ranked undeveloped project in South America. The Toroparu Gold Project is described as a world class asset with a 10 million-ounce potential gold reserve.

He explained that Noting Sandsprings/ETK will in the future face a demand for about 35 megawatts of electricity when the operation is up and running and is therefore developing a hydro-electric station known as the Kurupung River Hydroelectric Project (KRHP). This station will use run-of-river technology which requires no damming. He added that his company is mindful of Guyana’s interest in hydro-electricity, and has designed the KRHP to be expanded incrementally from 50 megawatts to 100 megawatts with the aim of supplying external clients. Yannis Tsitos, President and Director of Goldsource/Kilroy Mining, indicated that his company has spent more than US$22M in exploration and development in Guyana which he described as, “an extremely good jurisdiction.” The company intends to eventually produce around one million ounces of gold, averaging between 55,000 and 75,000 ounces a year.

The Goldsource/Kilroy Mining executive who has a background in bauxite mining also spoke to investors and other mining operatives about Guyana’s high-quality bauxite which he explained yields about 62 per cent alumina when processed. “I would hope that one day Guyana can come out of the loop of being an exporter of raw bauxite by self-producing, and eventually building an alumina or even an aluminum plant,” he urged.

Minister of Finance, Hon. Winston Jordan was the featured speaker at the prestigious event. During his address, he outlined the Government of the Cooperative Republic of Guyana’s Vision and projections for the extractive sector. He also called attention to ‘the United Nations Sustainable Development Goals, which were adopted by the UN General Assembly, that acknowledged inter alia, the need for environmentally sustainable economic development and stressed that the mining industry has a pivotal role to play in the attainment of these goals, by ensuring that its operations leave a positive footprint on the environment, even as it generates profits, creates employment and promotes economic growth.’

Minister Jordan assured the more than twenty five thousand investors, analysts, mining executives, prospectors, geologists, indigenous peoples, government officials, and students from over 125 countries participating in the Convention that ‘Guyana’s economy has achieved relatively stable economic growth consistent with the global trends’ and its ‘fiscal position has remained strong, with growing current account surpluses,’ and an ‘overall deficit (that) has been kept within sustainable levels.

He said that the ‘financial system is robust, with banks and other non- bank financial institutions being sound and adequately capitalized, Public debt levels are prudently managed while annual inflation hovers around 2 percent.’ He further said that with foreign reserves that are over 3.5 months of import cover, and no exchange controls, Guyana’s environment makes for hassle-free repatriation of profits and dividends.’
Minister Jordan lauded Guyana’s mining sector as a significant pillar of the country’s economy and the main contributor to the Gross Domestic Product (GDP) for the past three years as well as a major source of Foreign Direct Investment.

He noted though, that while mining in Guyana is successful, it is ‘unable to unleash its full potential’ because it is challenged by the ‘unavailability of requisite capital to local investors.’To address this challenge, he said, ‘Government is encouraging local miners to establish linkages with foreign investors and members of the Diaspora to access the necessary financing and technology while at the same time providing fiscal incentives in the form of concessions on machinery, equipment and fuel, and waiver and remission of taxes on motor vehicles, based on the value of gold declaration.

He added that mining operators are permitted to hold foreign exchange retention accounts while larger operators are subjected to an Investment Development Agreement that allows for duty and tax concessions for specified periods in the life of the investment.

Minister Jordan also underscored that the‘Guyana Office for Investment is ready and ably equipped to facilitate investors and to help them navigate any bureaucracy and assured that investors are guaranteed the safety of their investment and the ease of doing business. He pointed out that Government is cognizant that a strong legal and regulatory framework is a prerequisite for the orderly and safe development of the sectorand that it has undertaken revisions to the Mining Act and Regulations which are expected to be completed and laid in the National Assembly by the end of 2018.

The Finance Minister in his address announced too, that with the recent discovery of in excess of 3.7 billion barrels of recoverable oilin the country’s offshore basin, production of first oil is expected in the first quarter of 2020, with 120,000 barrels per day being targeted which could eventually reach 500,000 barrels per day by 2025, and up to 1,000,000 barrels per day by the late 2020s. He highlighted that the revenues that Guyana will earn from this discovery will have a transformative effect on the country. He further added that the Government is keen to avoid the ‘oil curse’ and thus is ‘presently fashioning a constructive and enlightened Sovereign Wealth Fund, to provide for inter-generational equity. The Fund’s legislation is expected to reach Parliament in the last quarter of 2018.’

Member of Parliament in the Canadian House of Commons who is also the Parliamentary Secretary to the Minister of International Trade, Pamela Goldsmith-Jones, pointed to Canada’s renowned capabilities in off-shore oil and gas, and acknowledged that Guyana is a key market for Canada.

“In 2016, Guyana became Canada’s largest merchandised trading market within CARICOM because of a significant increase in gold imports to Canada…our government is committed to further strengthening our relationship with our friends and partners in Guyana,” Goldsmith Jones said.

Noting Guyana and Canada’s longstanding trade relationship, the Member of Parliament emphasised, “there’s no question that Guyana holds a promise for Canadian companies in the extractive sector, especially in mining and oil and gas, which we recognize as important to Guyana’s economy.”

Guyana’s High Commissioner to Canada, Clarissa Riehl and Canadian High Commissioner to Guyana, Lilian Chatterjee also made brief remarks.

Minister Jordan and the GO-Invest team met with the Premier and Deputy Minister of Natural Resources for Newfoundland and Labrador to discuss opportunities in mining, Oil and Gas and the Natural Resources sector in General.

Chief Executive Officer of Go-Invest Owen Verwey, following the event, said he was heartened by the tremendous interest shown in Guyana Mining Day 2018 in Toronto, noting that “Guyana is indeed being recognized as a world-class investment option for mining and natural resources.”

The event was chaired by newly appointed Guyana Consul General to Toronto, Ann Choo.Also presenting at the forum were Metallica Commodities Corporation, Goldstrike/Romanex, Guyana Women’s Mining Organization and Guyana Geology and Mines Commission.

Guyana Office for Investment