Jagdeo says old Omai has not returned to Guyana, despite company president says “we are back”   

Jul 26, 2024 News

Vice President, Dr. Bharrat Jagdeo

Kaieteur News – Vice President Bharrat in an effort to defend his government’s decision to grant approval for Omai Gold Mines to reenter Guyana said that the company here at the moment is not the old one. However, Elaine Ellingham, President and Chief Executive Officer of Omai said that it is the same old entity that is here.

On August 19, 1995, a man-made environmental disaster had occurred in the Omai River in Guyana; the walls of an earthen tailings pond, constructed to contain cyanide utilised in the gold-mining industry became breached. More than 400 million gallons of cyanide-laced material spilled into the Omai River and subsequently, into the Essequibo, the country’s largest river.

The spill resulted in severe environmental, ecological, social, economic and political consequences for the Guyanese community. The local and international media, government, politicians and environmental groups were actively involved in the matter. Due to local outcry and international outrage, gold-mining operations in the region were suspended for several months. During the crisis, former President Cheddi Jagan had declared a stretch of 50 contaminated miles of the Essequibo River as an environmental disaster zone. While concentrations of cyanide of two parts per million (ppm) are fatal, the slag along the Omai River values reached 28 ppm during that disaster. A government-mandated Commission of Enquiry investigated the matter and made recommendations. Nevertheless, gold-mining operations resumed fully at the spill site by March of the following year. 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 Mahdia Gold Corporation (MGC).

Elaine Ellingham, President and Chief Executive Officer (CEO) of Omai Gold Mines.

From 1993, the company commenced actual extraction of gold, and during their 24-year run, the company extracted some 3.7 million ounces of gold, but only paid five percent of that in royalties to Guyana. Had the terms of their contract for the lucrative gold mine entailed more benefits for Guyana, the country would have reaped in billions of US dollars. In addition to this, the company benefitted from a slew of tax, fuel and vehicular concessions—totaling to millions of Guyanese dollars.
This wasn’t the only sweetheart deal that Omai Gold Mines reaped – in their contract was a clause which protected it against any future laws. In other words, not even Parliament could reduce the benefits which were due to Omai under that agreement. However, because of the steep drop of gold prices in 2005, Omai decided that it was time for them to close up shop. The company had to stay on for three more years to fulfill its obligations as these related to ensuring that the site was environmentally safe given the wide scale use of cyanide.

Jagdeo’s response

In light of the foregoing, Jagdeo was asked at his news conference on Thursday why did his government accept the company that had caused such major disaster here and what steps were taken to reconcile the relationship between Omai and Guyana.  In response, Jagdeo said, “Well, it’s two different companies; now it’s two different companies. So, they have not returned; Omai has not returned. It’s a different company, different ownership very different ownership”.

They remember when Omai was here

However, Ellingham back in March during an interview with Crux Investor that was streamed on their YouTube Channel highlighted a meeting with President Irfaan Ali, emphasising the government’s enthusiastic support for mining initiatives. Ellingham stated, “He’s (President Ali) got a lot on his plate and you can imagine the offshore oil business in Guyana is just attracting so much foreign interest and foreign investment.” However, Omai’s CEO stated that Guyana’s head-of-state still finds time to stay updated on the company’s progress. “But you know, they really value mining, they remember when Omai was in production…so Omai in particular has kind of a special place in the hearts and souls,” Ellingham stated. “They always wanna know how Omai is doing and how soon it can be in production so we need to forge forward,” she added. She added that the Ministry of Natural Resources and the Guyana Geology & Mines Commission (GGMC) are equally keen to see Omai back in production soon. Ellingham underscored Guyana’s unique position among global jurisdictions, noting the government’s proactive role in fostering mining activities.  She remarked, “There’s very few jurisdictions in the world, where you know you have a government that’s kinda routing for you and wanting to see you advance.”

Omai’s return to Guyana

Additionally, despite Jagdeo’s denial of the return of the company, in October 2020, the Minister of Natural Resources, Vickram Bharrat revealed that Omai Gold Mines Limited (OGML) had signaled their intentions to return to Guyana. In adding to this, Minister Bharrat had shared that OGML intends on recoiling to their old worksite in Region Seven (Cuyuni-Mazaruni).
Many government officials had and have hailed the return of OGML. Even with these touted investments, Kaieteur News had reminded that Guyanese must not forget that for over two decades, Omai Gold Mines exploited Guyana, its resources and has caused severe environment damage. Nonetheless, Minister Bharrat, in 2020 maintained that OGML will go through all of the necessary regulations to ensure that Guyana does not suffer another loss.

This year, the Canadian company announced significant milestones with its project, located in Region Seven (Cuyuni-Mazaruni). Omai holds a 100% interest in the gold project, which encompasses two gold deposits: the shear-hosted Wenot Deposit and the adjacent intrusive-hosted Gilt Creek Deposit.

On February 8, 2024, the Company announced an updated Mineral Resources Estimate (MRE) for the Omai Property. The combined estimates from the Wenot and Gilt Creek deposits stands at 2.0 million ounces of gold grading at 2.15 g/t gold in the indicated category and 2.3 million ounces of gold grading at 2.26 g/t in the inferred category. This represents a notable increase compared to the previous resource estimate conducted in October 2022, with indicated ounces seeing a 4% uptick and inferred ounces experiencing a substantial 28% surge.

• Bharrat Jagdeo, Canadian, Elaine Ellingham, Guyana, Omai