– knocks media reports as a ‘vicious, politically-motivated campaign

CANADIAN mining company, Guyana Goldfields on Monday said since opening up here in January, 2015, it has paid over to the Guyana Revenue Authority (GRA) some $168.7M even as it labelled reports of its operations as a “vicious and seemingly politically-motivated campaign to discredit the company and mislead the public.”

In a lengthy statement, the mining firm said too that it appears that this campaign is being orchestrated by the selective production of information “as well as through outright lies with the deliberate attempt to mislead…” The privately-owned Kaieteur News has been reporting daily on the company’s operations and concessions it received from the state. The newspaper has also questioned the company’s policy on local content, citing its resort to purchasing its own aircraft rather than utilising local airline services.

However, Goldfields said it has been pumping billions into the local economy, noting that in addition to its payments to the GRA, it has over the said period paid $119,000,627 to the Guyana Police Force and a further $173,057,776 to the Guyana Civil Aviation Authority. The company said its total Income Tax (pay as you earn) for employees for the period January 01, 2016 to April 30, 2018 was G$1,256,393,311; total payments to the National Insurance Scheme (NIS) G$417,191,266 and the maintenance of the Buckhall to Tapir road was G$820,000,000. Total donations of G$21,125,526 were also made over the period January 01, 2015 to April 30, 2018.

Investments agreements
Touching on Investment Development Agreements (IDA’s), the company said the submissions of IDA lists are the agreed-upon method instituted by the Guyana Revenue Authority that most companies must follow in order to be considered for duty-free concessions as outlined in their agreements.

“All items that a company anticipates that will be used in the fulfillment of their work must be listed. These lists can cover periods sometimes of 1-5 years. These lists are in no way linked to a company’s financial statements, so the spurious statement of items on an IDA list “will have an impact on its shareholder’s dividends .” can only be interpreted as being malicious and meant to bring disrepute to AGM. A forensic investigation into all items imported by AGM into Guyana under the IDA process will reveal that these items are used in and for the Aurora Mine Project. Our IDA records are open books.”

Explaining the IDA process, AGM said all heads of departments do projections of the equipment and items that would be needed for the smooth running of their departments. These lists are often prepared for 1-5 years. Further, upon receipt of all these projected lists, the Procurement Division compiles a master list and sends it to the Country Office for submission to the various Government agencies.

AGM further explained that the master list is then submitted to the Commissioner of the Guyana Geology and Mines Commission, who distributes the list to the Remission Department. That department then sends it to the Mines Division that is tasked to check the list and determine that the items are for use in the Mines project. Upon completion of their checks, enquiries and changes, the list then makes its way back to the Remission Department, then back to the Commissioner’s Office where a letter is prepared and attached.

Additionally, AGM said the Master list with the GGMC Commissioner’s letter is then sent to the Ministry of Natural Resources where it is perused against the Mineral Agreement and then returned to the Commissioner of GGMC. Upon receipt of the approval from the Ministry of Natural Resources, the GGMC Commissioner then sends the list to the GRA Remissions Department where it is checked against the relevant tax laws. Most times after more queries and changes (if queries are made the GRA does not communicate directly to the requesting Company but the list is returned to the GGMC where the process begins all over again), if the list is ok, then the Remission Department forwards it to the Commissioner General whose office then forwards it to the Ministry of Finance. The Ministry of Finance, after processing the list, then returns it to the Commissioner General whose staff then returns the Master list to the GGMC. The GGMC then sends the approved list to the requesting company.

“What is quickly apparent is that the IDA process is a very lengthy and laborious one. It certainly does not speed up business for the Foreign or Local Investor. This process can sometimes take up to six months before an approval is obtained,” AGM explained.

Duty-free concessions
AGM said it should be pointed out that prior to the first gold pour in 2015, it had sunken investment into the Aurora project of over Guy $1,602,000,000.
Referring to a Stabroek News article of May 27th, AGM said it was reported that the leader of the Opposition, Bharrat Jagdeo, in “noting concerns expressed about concessions given to foreign investors …said governments give concessions to make an investment viable or attractive, which includes ensuring a rate of return that is competitive with the rest of the world. “It can come in land price, in the form of duty free concessions or in the form of future taxes to make an exercise viable’ he explained. If the investment does not take place because the government is too paltry with the concessions, he said that the country loses out on jobs and linkages…He further said “if you don’t give Guyana Goldfields duty-free concessions to bring in their equipment for their project, there is much the country could lose as numbers often work against them.”

Aircraft service
The Kaieteur News has also reported on the company’s decision to purchase a Twin Otter Aircraft, citing that local airlines, which previously benefitted, have now been left out. However, AGM said in 2017, it decided to purchase a Twin Aircraft to transport its workers into the Aurora Mine located in Region 7 in the Cuyuni. This decision, the company said, was based primarily on economic considerations. “The Twin Otter is owned by AGM and is operated by Canadian Flyers–a company that manages and operates the aircraft with Canadian and Guyanese crews, pilots and mechanics. This company has current experience in operating Twin Otters at the highest regulatory standards in Canada and other parts of the world“.

The company also provided figures showing that it had spent over $1B from 2015 to 2017 on air travel with local airlines. “Surely, any responsible business, whether foreign or local, should have the right to make business decisions on starting or discontinuing a service that becomes too expensive to be maintained by that company,” AGM said in its release.
In further addressing the issue of local content, the company said payments to local suppliers, contractors and other payments were pegged at GYD$31,654,494,568 over the period January 01, 2015 to April 30, 2018. These services include purchase of material and parts, food, fuel and lubricants; education and scholarships; contractors and government services. The AGM said a total of 295 suppliers were engaged.

Noting that its operations has been of tremendous benefits to Guyanese, AGM said its workforce is comprised of 816 employees, which includes 756 locals and 32 expats as at May 10, 2018. “Total payment made to the GTM Insurance Company for the period January 01, 2015 to April 30, 2018 for employees Health Insurance Plan was G$57,677,223. Total Gross Salaries paid to Local employees for the period January 01, 2016 to April 30, 2018 was G$5,772,418,073,” AGM noted.