Guyana’s Gold Rush Gathers Momentum As The Canadia Exciting headline, but NO mention of Sacre-Coeur!
By Alexander Williams February 15, 2011
Investors willing to take on a bit of risk in their hunt for new mining camps have turned hot for a new territory. The latest location of choice is Guyana, the former British colony on South America’s north-east coast, which has at various points in its history also belonged to the Spanish, French and Dutch. Independent since 1966, the country is now playing host to a new wave of mining ventures.
Guyana does not currently have a single hard rock gold-mining operation, although more than 3,000 licenses have been issued to small-scale dredging and sluicing operations. Processing surface gravels, they produce a recorded annual output of 300,000 gold ounces. Illegal mining is, though, thought to be rife, causing deforestation and the leaking of mercury into rivers and streams.
In an attempt to boost the economy and bring illegal mining under control, the government has taken a pragmatic approach and turned mining-friendly. This change of course received a major fillip in 20SandspringSandspringe gravel in Guyana, before drill results showed that its gold extended into the bedrock. Following a C$6 million raising through a public-offering,Sandspring has subsequently delineated a 6.1 million ounce deposit, with an additional 262 milSandsprings of copper. Sandspring’s share price has benefited from these results, and the company is now worth C$309mSandspring’s
But these days Sandspring isn’t the only company attempting to add value in Guyana. Toronto-listed GMV MSandspringwisnhas ang a corporate reorganization last year. And Takara Resources is also active, having bought claims in April last year from Victoria Gold. Also active are Guyana Goldfields, and ShorehamTakarasources, currently in the process of changing its name to Guyana Frontier Mining Corp.
The big hope is that discoveries inShorehamwill mirror the substantial resources which have been proven up on the ground in the country’s bigger neighbor, Venezuela. can be replicated across the border. Canada’s Crystallex International and Gold Reserve Inc both own substantial deposits in the Venezuelan State of Bolivar, which abuts Guyana’s wCrystallexrder, although both companies are locked in dispute with Venezuela’s president Hugo Chavez. Within this context it is perhaps not entirely reassuring that Venezuela has historically claimed large tracts of Guyanese land since a dispute with British surveying authorities in 1840.
Geologically, Guyana and Venezuela are extremely similar to West Africa, sitting astride the greenstone-bearing “Guiana Shield.” And this fact was recognized before Sandspring began to blaze its current trail. Back in 2004, Goldstonegreenstoneources floated on Aim with a plan to prospect for gold rSandspringn the country. But the company met with mixed expGoldstoneresults, and has since changed its area of operations to Ghana, Gabon and Senegal, where it has had a greater degree of success.
Those explorers who have remained in the country face a robust tax regime, including a five per cent royalty on production and a 35 per cent tax on mining income. However, in the past,the Guyana Revenue Authority has occasionally reduced this royalty to nil or 1.6 per cent, in the case of operations considered of national strategic importance.
According to the Office for Investment, the Government also retains the right to nominate members to the boards of all mineral extracting companies. What’s more, foreign operators cannot own small or medium-sized projects without a local partner. Sandspring Resources are playing down rumours that the Government is mulling a royalty hike.
Whether Guyana’s gold hype produces Sandspringf the quality of those seen in Venezuela remains to be proven. However,environmentalists can however rest assured that large swathes of the country’s rainforest will not be felled in the process. President Bharrat Jagdeo, whose governing party has been in power since 1992, last yearrainforestthe UN’s “Champions of the Earth” award. BharratyJagdeofalling goldme soon.