A Toronto, Canada law firm with offices in Detroit, Michigan, US, says it has been hired to investigate the Guyana Goldfields Inc. to determine possible misrepresentation in a recent report to shareholders.
According to a statement issued and distributed by www.businesswire.com, Morganti & Co. disclosed that it has been contacted by investors to investigate Guyana Goldfields, Inc. “whether it released misrepresentations about its operations at the Aurora Gold Mine in order to artificially inflate its perceived investment quality and corresponding share price.”
The Aurora Mine is in Region Seven, near the Cuyuni River, and is the country’s largest gold operations.
It is being operated by mainly Canadian investors with several hundred workers.
Single-handedly, it has been producing the biggest quantity of gold, and has become the largest declarant since its start of commercial operations in 2016.
However, the company has been under scrutiny with questions over its adherence to its concession agreement and commitment to local content.
The company is now moving to underground mining, the first time for Guyana.
According to Morganti &Co., on July 16, 2018, Guyana Goldfields Inc. released a statement “reducing its annual 2018 guidance numbers blaming the late arrival of haulage trucks. The price of shares dropped approximately 22% in value.”
The law firm said that investors that have “realized or unrealized financial losses” as a result of acquiring Guyana Goldfield Inc.’s securities after February 20, 2018, are welcome to contact Morganti & Co. to further discuss their options”.
The firm said that confidentiality of investors and whistleblowers will be respected.
“You may contact us at (647) 344-1900 or by email at [email protected] for further information.”
Morganti & Co. said it is a law firm that investigates, litigates and resolves economic and financial disputes on a success-fee basis.
“You will not pay our legal fees or reimburse us for the disbursements unless we obtain a recovery.”
In that July 16 statement, the gold company said that gold production from mining operations at its Aurora Gold Mine totalled approximately 28,250 ounces for the second quarter ended June 30, 2018.
The company sold 31,700 ounces of gold at an average realized gold price of US$1,300 per ounce, generating gross second quarter revenues of US$41.2 million.
During the second quarter, the company said in the statement, 10 new fixed-frame 40-tonne haulage trucks arrived at site and were commissioned late in the quarter while an additional five trucks were commissioned after quarter end.
“The Company also signed an open pit contract mining agreement with STRACON GyM International S.A.C. (“STRACON”), see press release dated May 29, 2018. The additional capacity will assist the Company to meet the upcoming three-and-a-half year peak in waste mining requirements to meet its targeted mining rate of 75,000 tpd to accommodate the open pit production profile in years 2019 and beyond.”
According to Scott Caldwell, President and Chief Executive Officer, “Due to the late arrival of our 100%-owned expanded haulage fleet to site and the later than planned mobilization of the contractor, the second quarter mining fell behind by approximately 2.5 million tonnes (or approximately 500kt high grade ore) causing us to feed the mill with low grade stockpiles.
The equipment and contractors are now on site and production during the second half of 2018 will increase. However this will not be able to make up the shortfall in production by year end and therefore we are revising guidance. We are adjusting our 2018 annual production and cost guidance to 175,000-185,000 ounces of gold (from 190,000-210,000 ounces) and all-in sustaining cost¹ to $945 – $995 per ounce (from $830 – $880 per ounce).”
Yesterday, Peter Benny, the Human Resources Manager of the mines, said that this is the first time that the company is aware of the statement of the law firm.
“We have not been presented, issued, or notified of any such claim and in its present form as shared by you- the company refutes any such claims,” Benny said in a response to Kaieteur News.
“We definitely strongly refute such claims.”
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