Apr 24, 2016 News
– GGMC demands outstanding US$10M
In early 2011, Canada-owned exploration company, Mahdia Gold Corp. acquired what was once Guyana’s
biggest gold mine- the Omai gold mines property in Region Eight.
Approved via a Cabinet decision by the Bharrat Jagdeo administration, the Canadian company was supposed to develop the area, and pay the Government of Guyana a total of US$11.5M ($2.3B) over a two-year period.
However, despite being given extensions until February 2015, the company has not only defaulted on its commitments but it appears that nothing was done by the then Government of Guyana to monitor the activities of the company to ensure compliance.
In the last fortnight, the company sacked its Managing Director, Sheik Alan Zaakir. Donald Gordon, the Interim Chief Executive Officer (CEO) and a Director of Mahdia Gold Corp, tendered his resignation. New management has since been announced.
The company, from all indications, was given a free rein to operate the Omai property, an area that is over 28,000 acres.
It would tell the story of how one company was left unregulated with a huge piece of mining property and took advantage.
Mahdia Gold, according to GGMC and Government officials, instead of finding financing on the stock exchange where it is listed, concentrated on renting out parts of the property to small local operations.
Clash with Miners
There are several operations ongoing in the Omai site at the moment and it appears that new management of the
Mahdia Gold is clashing with them.
Zaakir, the fired chief of Mahdia Gold, had another company formed called Roraima Investment and Consulting Services.
Zaakir was the Secretary and Director while the other directors are Kris Sammy and former Opposition Leader, Robert Corbin. It was this company that signed agreements with a number of local miners to allow them to operate on the property.
It is unclear whether GGMC was aware that these mining operations were taking place.
Several of the miners say they have legal documents but Mahdia Gold last week in a public notice published in Kaieteur News made it clear that it had terminated the services of Zaakir.
Mahdia Gold also said that Zaakir had no right to collect funds or conduct any business with regarding the contracting of mining in the area.
The company warned that Zaakir cannot represent the company to government agencies like the Guyana Geology and Mines Commission, the Guyana Gold Board, the Guyana Revenue Authority and the Ministry of the Natural Resources.
The situation at Mahdia Gold would raise several questions, according to officials close to the company.
For one, Mahdia Gold’s permit was to conduct exploratory work. Was GGMC notified that several local
mining operations were in progress?
Make Omai available to locals
“It is clear that a lack of monitoring of Mahdia’s operations caused the company to owe Guyana over $2B over time. This is totally unacceptable. The company failed in its commitments to develop the place and provide jobs. Miners have been complaining about more lands. We know that there is gold there. The Omai area should be opened up to small miners,” a senior GGMC official said last week.
It would seem also that Mahdia Gold was connected to the previous administration.
A property in Kingston belonging to a former PPP/C Minister was rented to the company as its headquarters.
A number of miners have complained to Kaieteur News of producing gold which was handed over to the company but was never declared. The miners say that they are still being owed for it.
Several workers were laid off and some have complained of being owed wages.
What has also made the Mahdia saga even stranger is that in 2012, GGMC and the Ministry of Natural Resources approved more lands, more than 7,200 acres, which meant that the company was in control of over 28,000 acres.
Last week, a GGMC official said the entity had written former Minister of Natural Resources, Robert Persaud, asking for advice on the monies owed by Mahdia Gold, but no action was taken.
Mahdia Gold in a recent statement acknowledging its problems, promised to do what is needed to regain its trading status which it had lost.
“With a world class asset, our goal is to secure and manage our cash flow
from on-site partnering operations, while rebuilding the confidence once invested in the company by the government and people of Guyana — as well as our valued shareholders.”
Mahdia Gold said that it will work closely with GGMC to ensure that obligations are met for the future.
That company had said that as of August 2014, the company had owed over US$14M to the Government of Guyana and creditors.
A report from the company last week said that current management visited the Omai property in August 2014 and although the company had a physical office and a number of employees there was little activity observed.
As a matter of fact, the company ceased trading on March 13, 2013 for failure to file the annual audited and first quarterly statement. The Cease Trade Order followed management cease trade on the CEO for approximately two months which delayed the full cease trade order and was provided under the expectation that the Guyana information would be received.
The inactivity of the Omai property would raise eyebrows as it has been a number of years now since Mahdia Gold has taken possession.
Omai Gold Mines was most recently held by Iamgold after acquisition from Cambior Resources. At the time it was built, in the early nineties, Omai was the largest gold mine in South America.
In a period spanning 13 years, Omai produced over 3.7 million ounces of gold when the price of gold was approximately US$300 an ounce.
Mahdia Gold believed that historical data suggests that Omai still contains significant gold deposits.
Local miners have been complaining and asking for more lands with the new administration announcing recently that it will make some available.
Last week, GGMC wrote Mahdia Gold noting that the company has failed to honor its licence commitment. The regulator made the US$10M demand, asking that the company treat it as an urgent matter.
Jun 24, 2021Kaieteur News – The domestic-based contingent of Guyana’s Senior Men’s National Team along with some of their overseas based counterparts arrived in the USA last evening ahead of final...
Jun 24, 2021
Jun 24, 2021
Jun 23, 2021
Jun 23, 2021
Jun 23, 2021
Kaieteur News – Anyone who has read my analyses the past 32 years would know that I have literally begged people to... more
Kaieteur News – Cubans should not be penalised because of the alleged discovery of a human trafficking ring involving... more
By Sir Ronald Sanders More commonality was shown by CARICOM countries in a vote on Tuesday June 15 at the Organisation of... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]