Guyana Goldfields is good for Guyana-company paid US$15M in royalties last year

Guyana Goldfields is good for Guyana-company paid US$15M in royalties last year – Senior VP

Apr 02, 2019 News

Guyana Goldfields Inc., the Canadian operator of Aurora Mines, in the Cuyuni, Region Seven, is defending its contributions here, insisting yesterday that it is a serious publicly traded company that is under attack by a group of dissident shareholders.

Senior Vice President, Perry Holloway.

In a Letter to the Editor responding to a story carried last Sunday by Kaieteur News that raises questions about how a Peruvian contractor received millions of dollars in duty free concessions, the company said that since coming here two decades ago, it has invested over US$400M.
In fact, says Perry Holloway, Senior Vice-President, according to the company’s publicly released financial information, for 2018 the Government of Guyana received US$14,983,000 in royalties while the company’s net earnings were US$5,367,000 after expenses.
This means, Holloway said, that Government is getting almost three times more than the company’s profit without Guyanese having to invest a cent.

“Not a bad deal anywhere. Mining in remote areas is not cheap and the cost of transporting, feeding, and caring for 750 employees and more than 300 contractors, almost 1,000 who are Guyanese, is not cheap and all of this money is spent with more than 255 local suppliers, contractors, and companies.”
Holloway is a former US ambassador who retired a few months ago but decided to take up an offer to work with the mining company which since beginning commercial operations in early 2016, had become the largest single producer of gold.
However, the company is facing a major threat by a number of shareholders (including from founder, Patrick Sheridan), who are accusing the current Board of Directors and management of not making the right decisions.
The “dissident” shareholders are claiming that Guyana Goldfields may have misrepresented a few key figures.

More than US$400M was spent to develop and operate the Aurora mines, the company said yesterday.

Guyana’s share of the gold or royalties is eight percent. It is estimated that since 2016, Guyana collected the equivalent of 40,000 ounces or about US$48M. In return, the company received about US$50M in concessions in the last three years alone, according to government officials.
According to Holloway in his letter, the company also makes other significant contributions to Guyana.

“We pay payroll taxes on all these employees. We pay VAT on our local purchases. We have been here for 22 years and made no money for the first 19 years, yet we invested well over US $200 million of our money to get the mine operational. In fact, in total, we have invested more than US $400 million. There is no company in Guyana that could have done this in this remote part of the Essequibo, which is threatened by a foreign power to the west.”
Holloway insisted that concessions like VAT exemptions for foreign direct investment in remote areas are very normal throughout the world.
“…and frankly without such incentives, the jobs and contributions to the economy, these investments bring likely would never materialize. Again, we are a serious publicly traded company that is under attack by a group of dissident shareholders.”
“I am a serious person and I would not join Guyana Goldfields without knowing the full situation. We are a serious company trying to do the right things, the right way. We are declaring all gold and the Government of Guyana is on site as the gold is poured. We are not letting employees go.”
Holloway also denied that the company is taking advantage of the Government and people of Guyana with tax concessions, which is part of its investment agreement.
“We are not taking advantage of anyone. We are a publicly traded company in Canada in good standing with all laws and regulations. Yes, we are a for-profit business and the business of a business is to make money for its owners, which in our case are our shareholders.”