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bright future

Guyana’s Mining Sector Sparkles As Gold Exports Hit Record Highs

I

n 1594, Sir Walter Raleigh set sail for South America, in search of the legendary El Dorado. Though he never found his mythical city paved with gold, Guyana — the land Raleigh claimed for England — could well turn out to be a bonanza for multinational companies armed with the funds, machinery and know-how to get the country’s nearly 30 million ounces of proven gold reserves out of the ground.

No longer the domain of one-man “pork-knockers” working in remote jungle camps, Guyana last year mined a record 438,000 ounces of gold, mostly for export. The government expects 2013 gold production to rise by a further 2 percent, while output of bauxite — an aluminum ore and the main source of aluminum — could increase by nearly 7 percent. That follows last year’s bauxite production of just over 2.03 million metric tons, itself a 25.7 percent jump from the 1.83 million tons produced in 2011. “Our extractive industries — gold, diamonds, bauxite and manganese, as well as our potential in offshore oil and gas — are all driven by private investment. The state is not a player in any of those activities, and we’ve deliberately decided on that approach,” said Robert Persaud, Guyana’s minister of natural resources and the environment. “We have a very attractive investment policy, one which makes doing business here affordable but without bureaucracy and delays,” Persaud told us, noting that his government aims to provide potential investors with complete transparency. “There is no level of uncertainty in terms of what’s expected and what’s not expected.” Some 32 Canadian companies are currently involved in gold production, as well as some smaller U.S. juniors and a few from Australia. Several have made significant enough discoveries moving to the feasibility and development stage. One of them is Sandspring Resources Ltd., a Canadian company that is developing Guyana’s largest gold resource, the Toroparu property, located between the Cuyuni and Mazaruni rivers in southern Guyana. Sandspring announced the results of a prefeasibility study in early April 2013 and is continuing development of Toroparu with a goal of commencing construction of the project in 2014. Highlights of the prefeasibility study are: global resource in excess of 10 million ounces, initial proven and probable reserves of 4.1 million ounces of gold, and

Photos: Larry Luxner

annual production of 227,000 ounces of gold per year over a 16-year mine life. The project will provide several hundred jobs that Sandspring hopes to fill from the local workforce. Sandspring operates in Guyana through its subsidiary company, ETK Inc. ETK has been in business in Guyana since 1999 when it was founded by John Adams, currently chairman of Sandspring, and Rich Munson, currently CEO of Sandspring. ETK has been active in the mineral sector in Guyana since its formation. “John and I have been very fortunate in our endeavors in Guyana which have led to being in a position to put Toroparu into production in the near term,” said Munson. “We have been able to build a world-class team of mine builders [led by Mr. Yani Roditis] and explorationists [Werner Claessens and Pascal van Osta]. Werner and Pascal choosing to live in Guyana on a full-time basis with their families has significantly enhanced our presence in Guyana. Sandspring/ETK is definitely in Guyana for the long term.” Munson went on to say: “When I look back at our almost 15 years in Guyana, I am very impressed by the

above, Robert M. Persaud, Guyana’s minister of natural resources, discusses the country’s offshore oil potential. Left, This natural 17-ounce gold nugget mined in Guyana has a retail value exceeding US$86,000.

strides the country has made on all fronts. Guyana has an extremely well-educated and eager work force with a strong desire to learn skilled trades. Government has strengthened its open-door policy significantly under the last and current administration. In comparison to other places in the world our team has done business, Guyana is a great place to be building a major industrial operation. A positive example of Guyana’s open door to doing business was the execution by Government of Mineral Agreements with both Sandspring and Guyana Goldfields in 2011, which has allowed each company to aggressively move forward toward production.” Last year, Toronto-based Guyana Goldfields Inc. — which has operated in Guyana since 1996 — signed an agreement valued at $1 billion to develop various prospects throughout the country. According to a Continued on Page 14

Our extractive industries — gold, diamonds, bauxite and manganese, as well as our potential in offshore oil and gas — are all driven by private investment.

— Robert Persaud, minister of natural resources and the environment for Guyana

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April • May 2013

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