Gold at surface—it’s an explorer’s dream and the attraction for several companies working in Guyana. Notwithstanding thick jungles, heavy rain and limited infrastructure, the country inspires optimism among juniors working to overcome pessimistic capital markets.
Gold at surface—it’s an explorer’s dream and the attraction for several companies working in Guyana. Notwithstanding thick jungles, heavy rain and limited infrastructure, the country inspires optimism among juniors working to overcome pessimistic capital markets.
And it’s here that one company found not only a project but also an in situ team that might transform the explorer into a producer. To do so, Eagle Mountain Gold TSXV:Z has set an ambitious timeline with hopes of bringing 2014 production to its eponymous project in central Guyana.
Certainly president/CEO/director Ioannis (Yannis) Tsitos sounds confident. “First of all, we’ve got a board and management team that has put projects into production. Secondly, we’re looking at a robust gold price and my view and all the macro-economic analysis suggest this will continue. In terms of operating in Guyana, we can run this with decent costs. I don’t see why we should follow the formula of building up a company just to sell it.”
The company holds 50% of the project, with an option to pick up another 45% from IAMGOLD TSX:IMG for $1 million in cash and/or shares by April. The Guyanese government holds the remainder.
This year’s schedule looks busy, with more drilling to build the resource, work on the environmental impact assessment and a PEA, which is slated for Q2. Tsitos then plans to skip the pre-feasibility stage to reach full feas in 2014. Should economics, permitting and financing fall into place, open-pit gold production could begin the same year, he says.
Ambitious as it is, the schedule’s cost-effective, Tsitos maintains. “This plan calls for minimum dilution because the capex would be smaller. We’d first focus on the easiest parts of the deposits, which are the oxide parts, effectively mining the top 25 metres over a very extensive area. Later we’d expand into mining hard rock with a bigger mill and power requirement. Our approach is a phased development, therefore the timeline is aggressive but viable.” He foresees the mine expanding to several open pits feeding a central processing facility.
Last November’s resource update for the Zion and Kilroy zones uses a cutoff of 0.5 grams per tonne gold, showing:
■ an indicated category of 3.92 million tonnes averaging 1.49 g/t for 188,000 gold ounces
■ an inferred category of 20.63 million tonnes averaging 1.19 g/t for 792,000 gold ounces.
The deposit remains open in three lateral directions and at depth, the technical report states. Mineralization so far covers just 300 hectares of the 5,050-hectare property.
To offer perspective on the strategy of phased development, the resource gives separate numbers for oxidized rock, or saprolite, and for non-oxidized “fresh” or hard rock underneath:
■ the indicated category includes 74,000 gold ounces in saprolite material and 114,000 ounces in fresh material
■ the inferred category includes 306,000 gold ounces in saprolite material and 486,000 ounces in fresh material
As a 19-year BHP Billiton veteran who’s worked on two discovery teams and over 50 exploration agreements, Tsitos takes pride in his co-workers. His company, formerly Stronghold Metals, “inherited a team of 22 people from IAMGOLD, from geologists to the camp cook,” he says. “We bid on the project along with another five companies from Australia and Canada, and we insisted on this clause: If we take this project, we have to take your team. And we succeeded. So with that acquisition we got not only the title, we got the team, the equipment and machinery, a very good camp onsite and an office in Georgetown, the capital.”
The project is five kilometres from a highway connecting Brazil with Guyana’s Atlantic coast and four kilometres from an airstrip. The local community includes people who’ve worked in small-scale mining operations, Tsitos adds.
With previous experience in the country and neighbouring Surinam, he describes Guyana as “mining friendly with robust mining legislation based on British law.”
Eagle Mountain Gold also holds an option on 95% of the adjacent Mowasi property, a 17,000-hectare “very early-stage exploration project,” Tsitos says. Geochemistry has outlined two “very interesting targets,” he points out. “The presence of artisanal miners shows that gold comes from some source that has never been developed.”
As for the company’s share structure, IAMGOLD holds about 7.6%, Sprott Gold & Precious Minerals Fund 3.8%, management and insiders 15%. Tsitos emphasizes that his company was the only bidder that offered IAMGOLD significant stock instead of cash. Sprott, he says, is “a fund that obviously believes in gold and in good gold juniors. That adds credibility to the project, the management and the plan.”
Among others working in the country is Guyana Goldfields TSX:GUY, which announced a revised feasibility study for its Aurora gold property on January 11. The $205-million capex shows a huge drop from the $525 million for a more ambitious project envisioned in the original feasibility of February 2012. A sharp share plunge forced the radical revision which, according to Tsitos, helps justify his own company’s phased approach. Aurora is scheduled for commercial open-pit production in Q1 2015.
Another advanced Guyana project, Sandspring Resources’ TSXV:SSP Toroparu property has an in-pit resource showing:
■measured and indicated categories totalling 6.03 million gold ounces and 420 million copper pounds
■an inferred category of 3.97 million gold ounces and 169 million copper pounds.
Sandspring has scheduled a PEA for early this year with hopes of seeing production in 2015.
Guyana’s alluvial and eluvial gold puts Sacre-Coeur Minerals TSXV:SCM in an enviable position. The company helps fund its operations through hydraulic mining, which in this case means flushing and dredging muck into a sluice, then moving it towards on-site concentrating and refining.
The company’s Million Mountain property has measured and indicated resources totalling 451,000 gold ounces, an internal, non-43-101-compliant scoping study already complete and 43-101 feasibility slated for mid-2013. Sacre-Coeur hopes to begin open-pit production in late 2014.
On January 24, Gold Port Resources TSXV:GPO released a maiden resource estimate for its Groete gold-copper project 60 kilometres southwest of Georgetown. The in-pit resource shows an inferred category of 1.59 million gold-equivalent ounces. Infill and step-out drilling are planned, along with metallurgical testing as the project moves towards PEA.
Another inferred resource, of 1.22 million gold ounces, comes from Azimuth Resources’ TSX:AZH West Omai gold project. The company’s working on a resource update while also drilling a new prospect nearby.
Article by Greg Klein, Editor/Writer @ ResourceClips.com (http://resourceclips.com/2013/01/29/golden-guyana/)
