GUYANA-ECONOMY: Gold mining glitters anew

GEORGETOWN, Dic 16 (IPS) - Omai Gold Mines is to invest another 50 million dollars in its gold mining operations here in an effort to expand its milling capacity.

Omai, owned jointly by the government of Guyana, Cambior Inc and Golden Star Resources Ltd, two Canadian mining companies, is already the largest foreign investor here.

The company came to Guyana two years ago, lured by rich gold deposits and it has not been disappointed by what it has found. Original estimates of gold reserves had been put at 40.6 million tonnes. But revised estimates done in October say the company has access to 64 million tonnes of the ore.

It is this revision of the reserves that has the company thinking of expanding its milling capacity, officials there say.

But all has not gone as well with its Guyana operations as the expansion plans might suggest. The 1994 production target of 270,000 ounces of gold has not been met, primarily because of labour disputes.

The company has revised its production target to 252,000 ounces, says Gerald Veillette, the mine's manager.

Omai's expansion plans mean it will also have to launch a public relations campaign to appease local Guyanese. The company is currently battling public perception that it is shortchanging the country and government with its current investment deal.

"There still seems to be little public understanding of the fact that under the agreement the government of Guyana will receive just under 50 percent of the company's total cash flow, after the company recovers its investment," said Veillette.

The company has been at great pains to point out that it receives less than the government through a combination of royalties, personal income, corporate and excise taxes.

The government owns five percent of the gold mining operations but receives some 48.9 percent of the income, company officials say.

Officials say the company has been good to Guyana contributing more than 22 million dollars in taxes, royalties, local purchases, services and infrastructural investment.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service