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Guyana Goldfields to receive mining license for Aurora project within 45 days

by Brad Lemaire
Wed 2:15 pm - October 05, 2011
Source - Proactive Investors

Mineral explorer Guyana Goldfields (TSE:GUY) reported on Wednesday that it has signed a memorandum of understanding with the Guyanese government for a mining agreement and license at its Aurora gold project, in South America.

The Toronto-based company’s stock rose 52 cents, or 6.92%, to $8.03 Wednesday afternoon on the Toronto Stock Exchange.

The Aurora project rests about 170 kilometres west of Guyana's capital, Georgetown, and has a measured and indicated resource of 5.71 million ounces of gold.

The memorandum document sets out the key terms for the mineral agreement, also known as a fiscal or stability agreement for the development and mining of the project.

Guyana Goldfields said that the mineral agreement, license and all relevant permits and approvals will be issued within 45 days of signing the memorandum.

According to the terms of the pact, Guyana Goldfields will pay a royalty of 5% on gold sales at a price of gold at or below US$1,000 ounce, an 8% royalty on gold sales at a price of gold over US$1,000 per ounce, and also pay a corporate income tax rate of 30%.

The fiscal agreement is the final step in obtaining the mining license since the company already received its environmental permit in September, 2010.

"This watershed agreement is an important milestone for Guyana Goldfields as it will allow the advancement of the mine development project under a clear and stable fiscal and royalty regime," the company said in a statement.

Guyana Goldfield’s CEO, Patrick Sheridan, commented: "We are pleased to have concluded extensive negotiations with the Guyanese Government on the fiscal terms in this historic mineral agreement and look forward to obtaining our mining license in order to build and operate the Aurora gold project.”

Once the mining license is obtained, the company plans to start construction of the on-site infrastructures including a new camp, airstrip, river dyke and complete road access to the site, which is to be followed by the construction of mining facilities. A feasibility study for the project is expected in December.

Canada-based mineral explorer Guyana Goldfields is mainly focused on the exploration and development of gold deposits in Guyana, South America, where it has operated since 1996.

Guyana Goldfields

Guyana Goldfields is a mineral exploration Company primarily focused on the exploration and development of gold deposits in the Guiana Shield of South America. The Guiana Shield is in the northern part of the Amazon Craton and covers parts of Guyana, Venezuela, Suriname, French Guyana and northern Brazil.

The Company holds advanced exploration projects in various stages of development and has been operating in Guyana continuously since 1996.
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