GUYANA Goldfields Inc. produced 36,600 ounces of gold in the first quarter of 2019 at its Aurora Gold Mine as it remains on track to achieving 145,000 to 160,000 ounces of gold by the end of the year. However, its quarterly production declined by – 4.9% when compared to the production for the first quarter in 2018, which stood at 38,500 ounces of gold.
Guyana Goldfields Inc. made the announcement on Monday, explaining that the decrease in the mining rate can be attributed to the completion of the Phase 3 pit at Rory’s Knoll.
It said that as of March 31, 2019, there was “a strong balance sheet, with an unaudited cash balance of approximately US$73M, and a total debt balance of US$35M.”
Guyana Goldfields noted that the full first quarter 2019 operational and financial results will be released after-market on Tuesday April 30, and that a conference is scheduled for Wednesday, May 1 to discuss the results.

President and Chief Executive Officer, Scott Caldwell said the gold company is working to improve its operations. “Management is developing an optimized production schedule that will, among other things, reduce the stockpile buildup that is currently part of the new LOM (Life of Mine) plan,” Caldwell explained, noting that management has identified several additional cost-saving opportunities not captured within the new LOM plan, but will improve operating and financial flexibility.

“Looking ahead,” he said, “we expect to set a new and higher standard in our operating performance, and provide consistent results based on our new resource model. We have continued to strengthen our Board and senior management, and have brought on proven expertise to assist with our operating plan.”

The company stated that in the first quarter of 2019, it significantly improved mining and milling volumes, compared with the prior year. It was explained that the improvement allowed the company to partially offset the negative impact of a higher strip ratio and a lower head grade compared to the first quarter of 2018.

“Gold recovery averaged 90.5% for the quarter, compared with 91.7% a year earlier. The Company completed the mill expansion, which is anticipated to enhance capacity and redundancy of the primary crushing circuit, and expected to further lower per unit costs,” Guyana Goldfields explained.

On January 14, 2019, the Company stated that first-quarter gold production would be similar to its fourth-quarter 2018 production of 42,750 ounces, based on the now obsolete 2012 resource model. A full reconciliation analysis of the model, mine and mill grades will be presented with the quarter end results.

On the financial side, Guyana Goldfields expressed satisfaction with its unaudited cash balance of approximately US$73M, describing it as strong. It said that with the debt reduced to US$35M under the current terms of the loan agreement, it is scheduled to make seven additional quarterly payments of US$5M to retire the debt at the end of 2020. The Company is reviewing options to restructure debt in order to boost its financial flexibility.
In the statement, Guyana Goldfields said Roscoe Postle Associates Inc. (RPA), the author of the updated LOM plan which was completed in March, recognised and pointed out that the production plan was not optimised due to time constraints. As such, the company’s management has identified a number of additional opportunities to enhance its corporate business plan that fell outside the scope of the RPA study. It expects to complete and announce its optimized plan in conjunction with its first quarter financial and operating results after-market on April 30, 2019.

Among the plans it has, is to establish a strategic mining alliance into a single operating unit in an effort to improve the efficiency of the operation, thereby allowing management to focus on reducing overhead costs.
The company will host a teach-in technical workshop for analysts and institutional investors on Wednesday, May 1, 2019 to discuss the results of the optimization initiatives.

“Work on the underground decline will resume in the second quarter. The contractor will complete and reinforce the collar at Mad Kiss and extend the exploration decline 200 metres to fulfill the scope of the early works phase. The company expects this work will take approximately three months to complete once the contractor is fully mobilized.  A budget of US$2.0 million has been approved for the early works phase,” it further detailed.

Guyana Goldfields permit allows test mining of up to 350,000 tonnes that could potentially provide supplemental mill feed during the development period and further unlock value at the Aurora Gold Mine. In addition, the underground exploration ramp will allow the Company access to perform infill drilling at depth to delineate exploration targets and potentially add mineral resources, as well as convert mineral resources to mineral reserves and further unlock value by potentially prolonging the mine life at the Aurora Gold Mine.
It noted management’s intention is to develop an Underground Technology Centre, with a purpose of educating and transferring skills and technology required in all areas of underground technology. The company is finalizing the review of bids received for the underground development contract with the target of final award in the second quarter of 2019.