Wednesday April 20, 2016
GGMC drags foot in collecting outstanding $2B from Mahdia Gold
An overhead shot of the Omai site, Region Eight. Almost five years ago, Canadian-owned Mahdia Gold Corp. acquired a large portion of the Omai gold mine property, in Region Eight, following proposals from a number of investors to the Guyana Geology and Mines Commission (GGMC). The property is believed to still hold a large deposit of gold with Mahdia Gold’s intention to capitalize. However, the c o m p a n y a p p e a r s t o be in trouble now, owing the Government of Guyana almost $2B (US$10M) for the acquisition of the property. There are burning questions why the GGMC and previous administration under the People’s Progressive Party/ Civic (PPP/C) failed to move in and collect the monies, or at the very least ensure that the company met its obligations. Although Minister of Natural Resources, Raphael Trotman, was not immediately available for a comment yesterday, a GGMC official indicated that a report is being prepared for the minister on the Omai property and Mahdia Gold. GGMC had written former Minister of Natural Resources, Robert Persaud, asking for advice on the monies owed by Mahdia Gold, but no action was taken. Last week, the company sacked its Managing Director, Sheik Alan Zaakir, with Donald Gordon, the Interim Chief Executive Officer (CEO) and a Director of Mahdia Gold Corp, tendering his resignation. Yesterday, Mahdia Gold published a notice in Kaieteur News, warning that Zaakir, its previous manager, is not authorized to conduct any busi-
ness on its behalf. The company also issued a statement naming Michael Smith as the new director and CEO. He is tasked with the day to day operations of the company, both in Canada and in Guyana. A number of other appointments were also announced. The new CEO in the statement yesterday said that the challenges facing Mahdia are manageable. “We know what work lies ahead, and we now have a very capable and motivated team prepared and able to do what is needed to regain our trading status. With a world class asset, our goal is to secure and manage our cash flow from on-site partnering operations, while rebuilding the confidence once invested in the Company by the government and people of Guyana — as well as our valued shareholders.” Mahdia Gold said that it will work closely with GGMC to ensure that obligations are met for the future. “I pledge to all of our stakeholders that Mahdia’s new management will work to move the company forward, but also attend to stakeholder concerns of the past. We are working with regulators and Government Authorities in Canada and Guyana to uncover actions that caused the company, and the Omai mine, to fall into its current position. We continue to feel very encouraged by the prospects of bringing the Omai mine back to life again and are committed to ensuring the strongest team is working to represent our shareholders.” As of August 2014, the company had owed over US$14M to the Government
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of Guyana and creditors. A report from the company last week said that current management visited the Omai property in August 2014 and although the company had a physical office and a number of employees there was little activity observed. “Reports from the property ceased such that no information was provided as to whether production was occurring and if so, if sufficient to cover expenses of production and provide any funds to the company.” As a matter of fact, the company ceased trading on March 13, 2013 for failure to file the annual audited and first quarterly statement. The Cease Trade Order followed management cease trade on the CEO for approximately two months which delayed the full cease trade order and was provided under the expectation that the Guyana information would be received. ”The current board had no means to attend the property themselves but made regular requests for the Guyana Managing Director to provide reports; however the board remained to ensure the company maintained stability in its board for the purpose of renegotiating the payment terms which were in default.” To restore the company’s trading status it will have to obtain the information from the Guyana operations for the fiscal years ended August
Sacked Managing Director: Sheik Mohamed Zaakir 31, 2014, and 2015, along with the intervening quarterly periods as well as file to the most recent quart e r l y f o r f i scal 2016. On completion, the company will have to complete a creditor reorganization, secure its ownership of its property, ensure all its continuous disclosure obligations are met, hold its shareholder meetings for the past two years, and ultimately seek a stock exchange listing if it can meet listing requirements. Following the visit, the company said it has been approached by persons who are proposing to join the board and take control. The inactivity of the Omai property would raise eyebrows as it has been a number of years now that Mahdia Gold has taken possession. Omai Gold Mines was most recently held by Iamgold after acquisition from Cambior Resources. At the time it was built, in the early nineties, Omai was the largest gold mine in South America. In a period spanning 13 years, Omai produced over 3.7 million ounces of gold during a period when the price of gold was approximately US$300 an ounce. Mahdia Gold believed that historical data suggests that Omai still contains significant gold deposits.
US Human Rights Report 2015….
Killings by Govt. or its agents highlighted Arbitrary killings by the government or its agents was the most significant human rights problems in Guyana as identified in the 2015 Human Rights Report of the Department of State of the United States of America. Additionally, the report cited allegations of government corruption, including among police officials and laws that discriminate against women and lesbian, gay, bisexual, transgender, and intersex persons as other human rights violations in Guyana. It also mentioned lengthy pretrial detention as a major cause for concern. According to the report, there was also a lack of independent and transparent procedures for handling allegations of abuses by security force members. Prosecutions when pursued were extremely lengthy, and convictions rare, leading to a widespread perception that security force members and government officials enjoyed impunity, were also highlighted in the report, which was recently released. ARBITRARY OR UNLAWFULDEPRIVATION OF LIFE There were several reports the government or its agents committed arbitrary or unlawful killings during the year. In July a member of the police anti-smuggling unit shot and killed Charles Caesar while attempting to arrest him. Police reported that Caesar was suspected to have smuggled illegal goods into the country and attempted to run away to avoid arrest. While the report did not mention it, the killing of Courtney Crum-Ewing last March, which is widely
believed to be politically linked, is still engaging police investigators. Crum Ewing was gunned down in the Diamond New Scheme on the East Bank of Demerara, while he using a bull horn, urging residents to vote against the then ruling People’s Progressive Party/ Civic at the May 11, 2015 General Elections. DISAPPEARANCE There were no reports of politically motivated disappearances. The report also touched on torture and other cruel, inhuman or degrading treatment or punishment. According to the report, while the law prohibits such practices, there were reports, nonetheless, alleging mistreatment of inmates by prison officials as well as allegations of police abuse of suspects and detainees. Prison and jail conditions, particularly in police holding cells, were harsh and potentially life-threatening due to gross overcrowding, physical abuse, and inadequate sanitary conditions and medical care. The report referred to a Guyana Prison Service report that as of October, there were 1,944 prisoners in five facilities with a combined design capacity of 1,640. A total of 963 prisoners were in Georgetown’s Camp Street Prison, designed to hold 550 inmates. Overcrowding was in large part due to a backlog of pretrial detainees, who constituted approximately 11.3 percent of the total prison population. This situation was recently highlighted when a prison riot erupted, leading to the tragic deaths of 17 prisoners in the Camp Street facility. The US State Department (Continued on page 32)