THE Board of Directors of the Canadian mining company Guyana Goldfields Inc. has approved a US$238 million expenditure for the Aurora Gold Project in the Cuyuni area of Region 7 (Cuyuni/Mazaruni).

The company is expected to reach commercial production by mid-2015, it announced yesterday. It has executed a Heads of Agreement and Terms Sheet documenting the principal terms and conditions with joint venture partners Sedgman Limited and Graña y Montero, for the full engineering, procurement and construction of the initial 5,000-tonnes-per-day (tpd) processing facility and power plant, which is on a “not-to-exceed” basis, valued at US$137M.
The capital expenditure is contingent upon successful completion of project financing and other approvals, which are expected to be finalised by the second calendar quarter of 2014.
The GGI recently signed a mandate letter with the International Finance Corporation (IFC) of the World Bank Group to lead a senior debt facility in the amount of US$165M.
IFC, it said, has provided indicative financial terms whereby IFC will lead the coordination of the overall debt syndicate with other commercial banks and multi-lateral and development institutions.
Due diligence is proceeding, and the completion of the transaction for the sum of US$165M is expected in the second calendar quarter of 2014.
Management, the company said, is confident that it would be able to fulfill all foreseen project financing requirements. It is also closely monitoring its expenditures and commitments for the project, in order to rationally synchronize spending with the debt financing timeframe.
Construction is anticipated to last 18 months, with commissioning of the mill beginning in the first quarter of 2015.
Scott A. Caldwell, President & CEO of Aurora Gold Company Inc, declared: “This is an extremely significant milestone for the project and for the Company. We are excited to be moving the Aurora Gold Project forward and have engaged an excellent team whose strengths complement each other.
Both of the joint venture (JV) companies have recognized industry expertise and a solid reputation for building and designing projects in tropical environments similar to Guyana’s.
Commercial gold production is expected to be achieved by mid-2015.
All other fundamentals of the original feasibility study remain the same, with the overall mine plan producing a total of 3.29 million ounces of gold over an initial 17-year mine life, at an operating cash cost of US$527 per ounce (operating costs include royalty), the company has said.