Nov 28, 2017 News
Eleven years after Guyana’s biggest gold mine closed its operations, amidst low prices, that Region Seven location is gearing for another major investment.
A new developer, Mahdia Gold Guyana Inc. (MGG), a few weeks ago, signed a Memorandum of Agreement (MoA) with the Guyana Geology and Mines Commission (GGMC).
The company is banking heavily on millions of ounces it says is still there.
The Omai Gold Mine was the largest gold mine in South America when it first opened. The mine was previously operated by Cambior Resources and subsequently IAMGOLD of Canada. During its 13 years in operations, the mine produced 3.7 million ounces of gold.
Historic data suggest that a multi-million-ounce resource remains. Compliant exploration work is required to confirm the historic data.
The Canadian gold company was first granted an exploratory licence for the more than 7200 acres property. However, it had expired. The re-application process for the company had been ongoing over the last year under tough negotiations with the Ministry of Natural Resources and the Guyana Geology and Mines Commission (GGMC).
According to officials, under the new agreement, the land would be a few hundred acres less.
Recently, Mahdia Gold in a statement indicated that that the issuance of a new Prospecting Licence for Omai, located in the Potaro, Essequibo River, will facilitate the company’s next phase in development in Guyana.
Under the agreement, Mahdia Gold will pay US$4M to GGMC in four payments over the next four years.
The recent developments, according to Michael Smith, Chief Executive Officer of Mahdia Gold, would not have happened without the support of the Government of Guyana. The government offered its support in finalising the MOA.
Helping to close the deal was Guyanese-born, Kris Sammy, a former stockbroker and portfolio manager, who lived in Canada but played a lead role in negotiating the new deal for Omai.
He now sits as a director on Mahdia Gold Corps (Guyana) Inc. and is the company’s advisor on Guyana affairs.
Officials said that attention now will be to assess what exactly the gold-rich property has while finalising its restructuring and funding to get the company shares trading again on Canadian Stock Exchange where it has a very diverse shareholder base of private and institutional investors.
Also sitting on the team with Sammy is Kester DaCosta, Chief Financial Officer, who is an accountant with extensive mining and management background.
The team also comprises Major General (ret’d) Norman McLean, who during the mine operations up to 2006 under Cambior Resource and IamGold, held the office of Human Resource Manager for Omai Gold Mine Limited from its inception and participated in the management group for exploration, mine site build out and mining operations.
He has extensive knowledge of the Omai property.
McLean is also a consultant to Reunion Manganese, Sandspring Resources and Company, and Secretary for Bosai Mineral Group in Guyana.
The company’s Canadian Board includes Adam Szwearas, a partner with law firm Folger, Rubinoff LLP in Toronto, Canada and Frederick Mraz, president of FPM Investments, LLC in New York, an Investment fund that focuses on the mining of rare earth and precious metals in South America and emerging technologies.
According to GGMC officials, the company’s exploration plans will focus on moving Omai resource definition from an inferred deposit to a proven resource over a three-year period with updated NI 43-101 Technical Report.
It is the plan to return Omai to a large scale hard-rock mining operation while attracting direct investments into Guyana that exceeds US$500M during the course of exploration, re-development and operations.
Mahdia’s anticipated re-development plans will create new employment for over 300 persons in the first three years, and a further 1,200 jobs created during the construction of the mill with 650 permanent jobs resulting from mine operations.
In recent years, with gold prices rising, standing now at almost US$1,300 per ounce, there has been increasing interest in the gold fields.
There are several explorations underway with two large-scale operations in place, Canada-controlled Guyana Goldfields and Aussie-owned Troy Resources.
Gold has been accounting for the country’s biggest earner of foreign exchange in the last decade, as world prices continued to remain above the US$1,000 mark per ounce.
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