Guyana Goldfields Inc New GUYFF

Guyana to lower Aurora's CAPEX

[BG20]

Source - Blog: https://www.prcarbon.com/press/guyana-goldfields-to-lower-the-auroras-project-capex-1003497.html

Guyana Goldfields to lower the Aurora’s project CAPEX

November 6, 2012 By Stephen

Guyna Goldfields (TSE: GUY) owns a huge gold deposit of +6.5 million oz. au in Guyana and the company is about to introduce new plans on how to develop its gold mine by the end of this year. Because the gold miner has insufficient funds to develop the mine and prefers to avoid attracting capital from the financial markets, the management has decided to create a new plan and lower the initial Capex of the project. Due to a big distance between the gold deposit and infrastructure, the previous project required $525 million Capex.

In the new feasibility study that will be provided in Q4 2012, the company will start mining the saprolite in the first few years in order to earn enough cash for the larger-scale mine project. Guyana Goldfields has a very high average grade deposit with +3.0 g/t Au, so the saprolite operation will be low-cost and will prevent the company from issuing more shares and diluting equity holders. This could also prove to be the catalyst investors are waiting as the stock price has been extremely weak in 2012 with a decline of more than 65%.

This kind of project de-risking could also make the company a possible takeover target due to the project profitability. According to the last feasibility study, at a gold price of $1,700 oz. the pre-tax NPV is $1.7 billion at a 5% discount rate and the IRR is 28.6%. Investors in Guyana Goldfields Inc. (GUY:TSX) are waiting the new feasibility study to provide them a direction on the future of the company.

In today’s session the company’s stock has appreciate by 1.37% and reached $2.95 CAD a share giving a value to the company of $281.41 million CAD. Recently Guyana Goldfields Inc announced its president and COO Marcel (Mac) F. DeGuire with an effective October 3, 2012.