Guyana Goldfields dissidents unhappy with delay

Gold pour at the Aurora Mine in Guyana, South America. Source: Guyana Goldfields Inc.

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By Peter Kennedy

Gold pour at the Aurora Mine in Guyana, South America. Source: Guyana Goldfields Inc.

A group of concerned Guyana Goldfields Inc. [GUY-TSX, OTC-GUYFF] shareholders say they are unhappy with the company’s announced decision to hold its annual and special meeting of shareholders on May 22, 2019. That is a full 140 days after the concerned shareholders submitted their request for the meeting on January 2, 2019.

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

Its primary operation is the 100%-owned Aurora gold mine in Guyana which reached the commercial production stage in January 2016.

The concerned shareholders, including Northfield Capital Corp., Robert Cudney, Donald Ross, Gretchen Ross and Patrick Sheridan, have nominated six experienced and qualified nominees to replace all of Guyana Goldfields’ board of directors at the meeting. The aim, they said, is to fix performance issues at the company, lead a share price recovery and execute a value-maximizing transaction.

“Tellingly, despite losing $1 billion in value since 2016, the company has not added any new directors in the past four years,” said Sheridan in a statement.

Guyana Goldfields responded on January 22, 2018, saying a special committee of independent directors has been formed to ensure that actions taken regarding the Sheridan Dissidents are in the best interests of the company. “The Sheridan Dissidents initiated a costly and unnecessary proxy fight without any notice to or engagement with the company,” Guyana Goldfields said in a press release.

The push for change follows a sharp drop in the company’s share price from over $5 in April 2018 to a low of $1.24 on November 28, 2018.

On Wednesday the stock was trading at $1.60, down 3% or $0.05 on the day.

The share price took a steep drop in October 2018, after the company reduced its production targets to 150,000-155,000 ounces from an earlier target of 175,000-185,000 ounces, which was also below guidance set in January 2018 of 190,000-210,000 ounces.

In November, 2018, it was reported that Guyana Goldfields had been asked to cease all activity related to underground development at the Aurora mine.

A Guyanese newspaper said the request came from the country’s Environmental Protection Agency (EPA), according to a report by Scotiabank.

The EPA request came two weeks after Guyana Goldfields announced that it had commenced underground development at the Aurora mine, completing the first blast on the Mad Kiss portal. The company said it planned to advance the exploration decline (sloping tunnel) approximately 2,500 metres and provide a platform for further underground exploration and definition drilling.

The decline is intended to provide access to all principal underground mining areas, including some higher-grade zones in the Mad Kiss and East Walcott deposits that could potentially provide supplemental mill feed during the development period.

In a November 19, 2018 press release, Guyana Goldfields said underground development work to advance the exploration decline at Mad Kiss had been temporarily suspended due to further information requested by the EPA in Guyana. It said all open pit operations, including surface mining and milling, remained in operation and were unaffected.

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