Guyana to earn US$960 million from 17-year Aurora gold mine

Last Updated on Wednesday, 1 October 2014, 20:55 by GxMedia

Guyana is expected to earn US$960 million in royalty and other taxes from the Aurora goldmine owned by the Canadian company during the first 17 years, Guyana Goldfields Inc; according to a senior company official.

Speaking at the re-launch of the Guyana Mining Toolkit, the President and Chief Executive Officer of Guyana Goldfields, Scott Caldwell said the mine is expected to produce US$150,000 ounces of gold per year beginning late 2015.

A document titled Guyana Goldfields Inc  Aurora: A Mine in the Making gives a breakdown of the projected revenue for the country’s coffers.  The company is expected to pay an 8 percent mining royalty on gold sales at a price of over US$1,000 per ounce (5 percent if below US$1,000 per ounce). The royalty will yield US$341 million in revenue.

The company is expected to pay US$509 million in Corporate Tax calculated at 30 percent;  Payroll Taxes amounting to US$67 million and Excise Tax on petroleum totaling US$43 million.

The company intends to employ up to 900 staff and workers during the development and construction of the mine during 2013-2014 but that number is expected to decline to about 400 to 500 staff and workers during actual mining operations from 2015 and beyond.

With the initial capital investment amounting to US$250 million for 2013 to 2014, Caldwell said Guyana Goldfields would have to repay a loan.

The cost of production is estimated to be US$800 per ounce based on world price of US$1,300 per ounce. Guyana Goldfields hopes to extend the life of the mine from 17 to 35 years.

Caldwell described the gold operations at Aurora as “high grade, low cost” with a yield of just under three grammes per tonne. “Very, very clean deposit. We are blessed with some great metallurgy, very simple metallurgy so very, very low cost.It’s going to be one of the lower cost producers in the world when it comes to a gold mine,” he said.

A US$185 million loan has been acquired from a consortium of banks: International Finance Corporation (IFC), Export Development Canada, ING Capital LLC, Caterpillar Financial Services Corporation and The Bank of Nova Scotia.