Govt. signs US$4M deal for redevelopment of Omai Gold Mine Site

Nov 07, 2017 News, https://www.kaieteurnewsonline...omai-gold-mine-site/

More than a decade after Guyana’s biggest gold mine shut its operations; commercial activities are again being touted for the mineral-rich area.
Yesterday, Canadian-owned, Mahdia Gold Corporation (Guyana), Inc. announced that it has signed a Memorandum of Agreement for the issuance of a new Prospecting Licence for the Omai Gold Mine Site, Potaro, Essequibo River.

“The Prospecting License will facilitate the Company’s next phase of development. The company has agreed to pay the Guyana Geology and Mines Commission (“GGMC”) a total of US$4M over four annual payments,” the company said.

The Omai Gold Mine was the largest gold mine in South America when opened. The mine was previously operated by Cambior Resources and subsequently IAMGOLD. During its thirteen years in operation, the mine produced 3.7 million ounces of gold. Historic data suggest a multimillion-ounce resource remains, Mahdia Gold said.

“Compliant exploration work is required to confirm the historic data. The future exploration work-programme will result in an updated NI 43-101 Technical Report with a compliant mineral resource estimate.”

The application had been under consideration for a number of months by the Guyana Geology and Mines Commission and Government.

Mahdia Gold in 2011 was awarded the property to redevelop. However, last year, there were some changes in management, and things are to move ahead rapidly. Mahdia Gold believes that historical data suggest that there are still significant gold deposits on the site.

Further exploratory drilling into the bottom of the open Fennell pit suggested that there could be an additional deposit of 1.4 million ounces of gold still available for mining by the company; data which were derived from just one pit while the other areas on the mining concession still remain to be evaluated.

With the price of gold skyrocketing to almost four times that value today, Mahdia Gold said that the opportunities are very lucrative.

Located in the Essequibo region, Omai in its heyday was one of the largest open pit gold mines in the world. 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 that crisis, President 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.

The mining company eventually shut down its operations in 2005 and its holdings passed from Cambior Resources to IAMGOLD, before they made it into the hands of Mahdia Gold.

Currently, there are two large-scale operations in Guyana – Guyana Goldfields and Troy Resources. The first is Canadian, while Troy is Aussie-owned. If all goes to plan, the Omai site would be the third.

Gold has been a major boost for Guyana’s economy in the last decade or so.

Topics