TORONTO, November 18, 2011 /PRNewswire/ --
Guyana Goldfields Inc. (TSX: GUY) ("GGI" or "the Company") is pleased to announce today that it has signed a Mineral Agreement ("MA") with the Government of Guyana and has received the Mining License for the Aurora Gold Project, as previously promised through its Memorandum of Understanding ("MOU") agreement with the Guyanese Government (see press release dated October 5, 2011). This is the first large-scale mining license to be issued in the gold sector in Guyana since 1991.
The MA details all fiscal, property, import-export procedures, taxation provisions and other related conditions for the continued exploration, mine development and operation of the Aurora Gold Project.
Significant among the terms include:
- Mining royalty of 5% on gold sales at a price of gold of US $1,000/oz or less
- Mining royalty of 8% on gold sales at a price of gold over US $1,000/oz
- Corporate income tax rate of 30% and no withholding tax on interest payments to lenders; and
- Duty and value added tax exemptions on all imports of equipment and materials for all continuing operations at the Aurora Gold Project, including the construction and operation of a planned port facility, road and power improvements and the construction and operation of the mine.
The Mining License is the Company's permit to build and operate the Aurora Gold Project. The document is valid starting immediately for an initial 20-year term with provisions for extension on application by the Company.
The MA and Mining License signal the commitment of the Government of Guyana and GGI to the development of the Aurora Gold Project. This is an extremely important milestone for the Company as it will allow the advancement of the mine development project under a clear and stable fiscal and royalty regime. Construction work on the mine site facilities and the mill will begin immediately in the first quarter of 2012 and is scheduled to be completed over a period of 24 months which includes contingency. The mine and mill are planned to be fully operational by Q1 2014.
Patrick Sheridan, JR., CEO, stated: "We have reached a significant milestone in the development of the Aurora Gold Project as a result of receiving all relevant approvals and licenses. After a considerable amount of time was spent obtaining these documents, we are now in a position to commence construction of the mine. We are very proud of this milestone achievement, and are dedicated to returning the government's trust and faith through becoming a leading corporate citizen and a productive partner in the future of Guyana's economy. This historic landmark agreement for the Company and Guyana, which strikes a fair and reasonable balance of taxation and royalties for gold mining, sets the stage for future large scale gold mining operations and reaffirms GGI's view that Guyana is "open for business"."
The Company continues to work towards completing its updated resource estimate at Aurora by mid-December of this year and deliver its Feasibility Study by January 16, 2012 (see press release dated November 11, 2011).
About Guyana Goldfields Inc.
Guyana Goldfields Inc. is a Canadian based mineral exploration company, primarily focused on the exploration and development of gold deposits in Guyana, South America where the Company has operated since 1996. The Company is currently undertaking drilling and studies to advance and develop the Aurora Gold Project in Guyana with a current measured and indicated resource of 5.71 million ounces gold (47.040 million tonnes at a grade of 3.83 g/t). A revised resource estimate is expected in December 2011 followed by the completion of a Feasibility Study in January 2012.
At the Aranka Properties, currently in advanced staged exploration, drilling of highly prospective targets is ongoing. The Company discovered a gold deposit at Sulphur Rose containing an initial inferred resource of 460,400 oz and plans to release an updated resource estimate in November 2011. As at the date hereof, the Company has approximately $41 million in cash and short-term bank guaranteed investment certificates and no debt; there are approximately 83 million shares issued and outstanding.
Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Guyana, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of resource and reserve estimates, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
For further information:
Guyana Goldfields Inc.,
President & COO
Vice President, Corporate Communications
Tel: +1(416)628-5936 Ext. 2295,
SOURCE Guyana Goldfields Inc.