Three large gold-mining operations to come on stream - Miners' association

http://www.stabroeknews.com/index.pl/article_general_news?id=56517764

Sunday, April 8th 2007

The Guyana Gold and Diamond Miners Association (GGDMA) is confident that at least three large gold-mining operations will be fully on stream in another two years and one of them might commence earlier, providing jobs to the gold sector and boosting the economy. But the association expressed concern about the introduction of Value Added Tax (VAT) in light of long-standing fiscal concessions for operators in the sector. The three companies are Sacre-Coeur Minerals Inc, a Canadian gold-mining firm carrying out exploration in Million Mountain in the Northwest District; Strata Gold Corporation of Canada prospecting in Region One (Barima/Waini) and Guyana Goldfields, a company which has been prospecting in Guyana since July 1996. Guyana Goldfields shareholder base comprises thousands of US and Canadian retail investors, a significant number of major institutional investors, as well as The International Finance Corpo-ration, the private investment arm of the World Bank. Speaking to this newspaper last week, Executive Secretary of the GGDMA Edward Shields said that because of VAT, many of the companies were uncertain about how the government would treat their concessions, and while this was being resolved, no work was being done on the ground. Shields indicated too that because of the uncertainties about the existing incentive regimes, goods for the companies that were on the various wharves in the city had not be cleared and put into use. However, the matter had now been resolved between the government and the association, and all existing incentive regimes would be honoured by the government. The association said that it had made representation to the government and was awaiting a meeting with the president to speak on the current challenges. Shields said that the association was also engaging the Guyana Revenue Authority (GRA) on tax issues. The Minister of Finance is to make regulations to allow for the adjustment to the schedule to enable the mining companies to retain their incentives. Shields is of the view that Guyana does not have the kind of incentive regimes in place which would really attract investment in the mining sector. He said that at a recent forum overseas, officials from the Guyana Geo-logy and Mines Commission (GGMC) were stumped when people wanted to know about the incentives they would get if they decided to invest. Geological Services Manager at the GGMC Kampta Persaud said that with the amount of preliminary work that is left to be done, he didn't see any of the companies being able to commence production before the end of 2008. He said that they still had to complete all their work and bring in their equipment. According to Persaud, Sacre-Coeur may be the project to begin extraction first, given the progress that had been made on the ground. The association said that the local mining industry had just concluded the best year in the history of gold and diamond mining and was confident that within the next two years - based on certified data from the large-scale prospecting operators - at least three operations larger than Omai Gold mines should begin work. The association requested that miners be aware of the "external forces that are gathering on the horizon, who have no interest in the development of Guyana, but whose sole purpose is for gold and diamond mining in Guyana to cease." According to the association in a 25th anniversary bulletin, the industry employs directly between 14,000 and 15,000 people, "which means that at least 56,000 to 60,000 (average four persons per household) benefit directly from the production of gold and diamonds." It said too that foreign prospecting companies like the three mentioned provide employment for an additional 2,000 persons. The bulletin said that for 2006 the industry had generated US$106M in foreign currency and $1.5 billion in royalty and taxes. It went on to say that the Guyana Gold Board purchased $20 billion worth of gold from small and medium miners in 2006 and that the Guyana Geology and Mines Commission earned approximately $276M in royalties from a declaration of 340,000 carats of diamonds. Rental paid to the GGMC amounted to $700M in 2006. The mining sector at present purchases capital equipment at a cost of between $4 and $5 billion annually and contributes significantly to manufacturers of steel products as well as equipment companies that specialise in the mining industry. The bulletin said that mining had created a network of roads that was necessary for the development of the hinterland and which also benefited the forestry, tourism and agriculture industries in addition to indigenous communities. It added that among the benefits over the years was ensuring the economic survival of Amerindian communities in the mining districts as well as the development of communities such as Bartica, Mahdia, Imbaimadai, Kurupung, Ekereku, Enachu and others.