Guyana Goldfields Inc. [GUY-TSX; OTC-GUYFF] has been asked to cease all activity related to underground development at its Aurora Mine in Guyana, South America.
A Guyanese newspaper reported over the weekend that the request came from the country’s Environmental Protection Agency (EPA), according to a report by Scotiabank.
The request has come just 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 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.
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, which reached the commercial production stage in January 2016.
According to Scotiabank, the EPA says Guyana Goldfields did not obtain a permit for the underground development project. Guyana Goldfields said the EPA is scheduled to visit the site today (Monday November 19) and provide further clarity regarding the request. However, the company said it expects to resume the exploration decline construction once the matter has been resolved.
“All open pit operations, including surface mining and milling, remain in operation and unaffected,” the company said in a press release.
On Monday, Guyana Goldfield shares eased 0.72% or $0.01 to $1.38. The 52-week range is $5.42 and $1.29.
The stock took a steep tumble on October 30, 2018, following a downward revision in Guyana Goldfields’ 2018 gold production guidance.
The company said it expects to produce 150,000-155,000 ounces of gold this year as grades have not rebounded as quickly as anticipated in the fourth quarter.
That is down from a mid-year-forecast of 175,000-185,000 ounces and a January 2018 estimate of 190,000-210,000 ounces.
The AISC (all-in sustaining cost) guidance was also raised to US$1,025-US$1,050 an ounce from the previous US$945-US$995 an ounce. “Looking forward, a revision of the life of mine production profile is anticipated,” the company said.
In a press release, on October 30, 2018, the company said it has initiated a review of the underlying resource model. “The company has engaged RPA Inc., an independent firm of engineers and geologists, to assist in the investigation of the geologic controls and grade variability of the deposit,” it said. “The company expects the results from this review to be incorporated in the 2019 guidance and annual reserve and resource update to be disclosed in the first quarter of 2019.”