Reserves up 12% in new Guyana Goldfields mine plan

Last Updated on Wednesday, 21 February 2018, 18:33 by Denis Chabrol

RESOURCE WORLD:Guyana Goldfields Inc. has released the results of an optimized life-of-mine plan for its 100%-owned Aurora gold mine in Guyana, South America.

Guyana Goldfields is a Canadian mid-tier gold producer, primarily focused on the exploration and development of gold deposits in the Guiana Shield of South America. The Guiana Shield is the northern part of the Amazon Craton and covers parts of Guyana, Venezuela, Suriname, French Guyana and northern Brazil.

The company signed a mineral agreement with the Government of Guyana and received the mining license in November 2011 to build the Aurora gold project.

The terms include a mining royalty of 5% on gold sales at a price of US $1,000/oz or less.

A mining royalty of 8% on gold sales at a gold price above US $1,000/oz.

Corporate income tax rate of 27.5% and no withholding tax on interest payments to lenders.

The new optimized life-of-mine plan includes an increase in mineral reserves to 4 million ounces, marking a 12% increase from the previous estimate.

Other highlights are as follows:

• Average annual gold production of 270,000 ounces over the next five years at an average cost of US $523/oz.
• Development of the underground operation is scheduled to commence in Q4 2018 with the first production expected in 2019.
• Open pit mining ongoing through 2030.
• Average head grade of 2.74 g/t gold expected over the life of the mine

Mill Expansion Phase 1:

• Expected to increase throughput from 5,600 to 7,500 tpd, based on a saprolite/hard rock blend with concurrent improvement in recoveries of 1%
• On-budget and on track for expected completion by the end of Q1 2018 at a capital cost of US $21 million.

Mill Expansion Phase 2:

• Addition of a previously purchased 1,000 tpd modular processing plant expected to result in increased recoveries of a further 1% to 2%.
• Expected to allow the processing of 7,500 tpd of hard rock.
• Expected completion by the end of Q4 2018 at a capital cost of US $6 million, representing a capital saving of US $20 million when compared to the previous 2017 feasibility study and an expedited completion timeline by approximately six months.
• Optimized the timing and level of the open pit and underground interface utilising a more selective mining method of long hole open stoping at Rory’s Knoll, starting in 2020, expected to result in a higher grade profile.

“We are extremely encouraged by the results from the optimized life of mine plan, which brings forward selective underground mining of higher grade stopes earlier in the mine life concurrent with open pit operations,” said Guyana Goldfields President and CEO Scott Caldwell.

“This approach results in an attractive near term growth profile and improves upon the production profile from the previous feasibility study with an additional 75,000 ounces expected to be produced over the next three years.”

He went on to say that cash flow generation over the life of the mine is also expected to increase in conjunction with a reduced risk profile through a more balanced distribution and of open pit and underground ore feed.

Guyana Goldfields share rose 5.42% or $0.24 to $4.67 on Wednesday February 21.