Jun 05, 2011 News
… Canadian company acquires prospecting rights
In a release from the Mahdia Gold Corp on Monday last, the Canadian company revealed that they have been “awarded the world class Omai goldmine by the Guyana Government.”
The release states that “Mahdia Gold Corporation has officially acquired the renowned Omai gold property”.
The release added that the concession covers “highly valuable ground” and that there may be “possible additional deposits according to reports and data collected during the previous operation of the mine.”
“Mahdia Gold Corporation will be working very closely with the Guyana Government to interpret the data and better understand the science so as to develop a successful and productive forward plan for further exploration and development of the OMAI concession.”
The release goes on to say that there is historical data which suggests that there are still significant gold deposits on the site. Further exploratory drilling into the bottom of the open Fennell pit suggested that there could be an additional deposit of 1.4 million ounces of gold still available for mining by the company; data which was derived from just one pit while the other areas on the mining concession still remain to be evaluated.
The company stated that they will be partnering with a “world class mining engineering company” to undertake the evaluation of the remaining deposit. Over a period of 13 years the mine had produced some 3.7 million ounces of gold when the gold prices were approximately USD$300 per ounce.
With the price of gold skyrocketing to almost five times that value today the opportunities for the Mahdia Gold Corp are very lucrative.
On the other side of the coin, Prime Minister Samuel Hinds who has responsibility for this sector, told Kaieteur News yesterday that he didn’t know about an actual sale per se. He said that the Government had received a number of proposals to look at the possibilities of further mining on the site since it was already well known that there were still untapped deposits in the area. The proposal from Mahdia Gold Corp was accepted and the company has committed to a “flow of payments over a given time frame” based on the findings of their prospecting and design of their extraction plan granted that the project remains feasible.
The Prime Minister stated that he expected additional prospecting to be undertaken and that an underground mining operation would eventually be developed in time since according to the release, the exploratory drilling through the Fennell pit floor went to a depth of 967 meters.
Hinds stated that there has been no discussion on the issue of royalties or any such negotiations however an announcement by the Government of the particulars of the deal may be forthcoming.
Meanwhile, industry insiders have said that there is enormous potential for gold in the Omai mine however the task of removing it is fraught with risk.
It has been noted, however, that the record high prices of gold on the current market have begun to make the effort of retrieving the gold very attractive which is why MGC is so enthusiastic to invest at this point in time.
OMAI Gold Mines have had a colourful history. Commissioned in 1993, OMAI Gold Mines Limited was a consortium between a Canadian company and the government of Guyana. They carried out operations at the OMAI Gold Mine with funding from the World Bank and International Monetary Fund.
Located in the Essequibo region, OMAI was one of the largest open pit gold mines in the world. In 1995, waste from the mine overflowed the retention dam, and over five days released four million cubic meters of cyanide-bearing tailings into the river that eventually ended up in the Essequibo River.
During that crisis President Cheddi Jagan declared a stretch of 50 contaminated miles of the Essequibo River as an environmental disaster zone. While concentrations of cyanide of two ppm (parts per million) are fatal, the slag along the Omai River values reached 28 ppm during that disaster.
The mining company eventually shut down its operations in 2005 and its holdings passed from Cambior Resources to IAMGOLD before they made it into the hands of MGC.
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