– returns to old worksite, investing US$12M in initial phase
By Navendra Seoraj
AFTER ceasing operations here years ago, Omai Gold Mines Limited (OGML) has made a return to Guyana, specifically to its worksite in the Cuyuni-Mazaruni region, where it intends to make an initial investment of US$12 million.
It was reported that the company had wrapped up operations in 2015 after 24 years of service in Guyana. Omai, during its “glory days,” was listed as one of the largest gold mines in Guyana and the world, with estimated reserves of 3.7 million ounces of gold.
“Omai is actually back in Guyana… they are conducting a number of geological surveys, testing and drilling to ensure that they identify mineral-rich areas,” said Natural Resources Minister, Vickram Bharrat, during an exclusive interview with the Guyana Chronicle, on Wednesday.
Returning at a time when the price for gold is over US$1,900 per ounce (the highest prices since 2011) is seen as strategic, but Minister Bharrat told the Guyana Chronicle that it could take at least two years for production to commence because of the magnitude of work expected in the initial phase.
In the initial phase, which is ongoing right now, the company will be drilling and testing to ascertain the viability of mining in the area, but Minister Bharrat said there is sufficient data to prove that there are a lot of minerals at the Omai gold mine.
“Even though Guyanese might think all the gold went away with Omai, they (the company) are willing to go back into it, at the same location, and they are actually giving a facelift to the facility by doing maintenance and repairs and so on,” said the minister.
Even though there is known potential at the site, the company will have to “dig deeper” because the “top layer” of land is already mined out.
In outlining what is expected to take place, Minister Bharrat said: “They have to go deeper… even though they are going deeper, it is not as deep as how they are mining in Suriname… but it is not a case of minerals not being there (in Guyana), it is there.”
The company’s prospecting will even expand because they are trying to acquire more land through small miners.
“They are working out their own arrangements…we do not have a problem with that, once both parties are satisfied,” said Minister Bharrat.
HUNDREDS TO BE EMPLOYED
Not only will the company be engaging and potentially supporting small miners, it is expected to hire hundreds of people, as over 1,000 persons were employed during the company’s early days of operations in Guyana.
While there is much promise from the return of this company, it was reported that in 1995, waste from the mine overflowed the retention dam, and, over five days, released four million cubic meters of cyanide-bearing tailings into the river that eventually ended up in the Essequibo River.
During this crisis, then President, Dr. Cheddi Jagan declared a stretch of 50 contaminated miles of the Essequibo River as an environmental disaster zone. While concentrations of cyanide of two ppm (parts per million) are fatal, the slag along the Omai River values reached 28 ppm during that disaster.
Considering the environmental impact and the “mishap” in the past, Minister Bharrat assured that the Environmental Protection Agency (EPA) is examining the operations and the company’s plans to ensure that mining is done in a sustainable manner.
“They are going through that process, so taking all of that into account, production can start after two years…they have to go through all the regulations,” said the minister.
The company on its website said Guyana has a long history of resource investment, but recently there has been a resurgence of interest in the country from large international firms.
Currently, there are over 25 mining companies active in Guyana as well as large-scale oil producers like ExxonMobil, which are investing heavily in Guyana’s infrastructure and workforce.
This “economic renaissance,” as described by Omai, has led the International Monetary Fund (IMF) to rate Guyana as the fastest growing economy in the world, and determine that the country’s Gross Domestic Product (GDP) of US$3.5 billion is expected to triple within the next five years.
The country’s potential is undoubtedly one of the reasons for the company’s return, and just October 1, 2020, Omai announced that it has completed its previously announced reverse takeover transaction in which Omai acquired all of the issued and outstanding common shares of Avalon Investment Holdings Inc. (“AIHL”), a private Barbados corporation.
AIHL is the parent company of Avalon Gold Exploration Inc, a Guyanese company which is engaged in the acquisition, exploration and potential development of precious metal mineral properties in Guyana, including the former Omai Gold Mines located in the Omai/Potaro Mining District No.2.