Guyana: Gold Declarations short by 97,000 ounces for 2014

Gold Declarations short by 97,000 ounces for 2014

Gold barsGold miners demand same incentives as big operators to stay alive

January 3, 2015 | KNEWS

As gold closed out a dismal 97,000 ounces short of its original 2014 target, local miners have stepped up calls for radical changes that will see real incentives to keep the industry alive for small and medium scale players.
Gold declarations ended the year at just over 387,000 ounces.

According to Guyana Gold and Diamond Miners Association (GGDMA), it now wants almost the same benefits as the big operators with the time now for key mining policy changes. This is to allocate more of the fiscal “benefits currently enjoyed by large scale licencees to small and medium scale producers as well.”

The association, in a strongly-worded statement, urged that these strategic changes be made immediately to “close the gap between the generous fiscal incentives awarded to large scale licencees”.

Without those benefits local gold production would continue to decrease and the large scale licencees would be unable to make up the slack, the body said.

“GGDMA is aware that short term strategic change to the fiscal regime for mining is not new to Guyana since the large scale bauxite operations currently benefit from substantially reduced or no royalty on the production of bauxite.”

It said that the strong, local capital investment in the gold mining sector must not be disrespected any longer. “The powerful multiplier effect of the local gold mining industry must not be hidden any longer. The right of the small miners to work in their chosen profession must be safeguarded. The opportunity for poverty alleviation through work in the local mining sector must be defended.” The situation is such that this year, Government must recognize that the aggregate contribution of Guyana’s local gold sector is by far greater than the projected contribution of large scale operations and their foreign direct investments.

“We call on the Government to improve the fiscal incentives for small and medium scale producers so that their contribution would not be strangled. Once again special congratulations to our local miners and best wishes and encouragement to the large scale licencees as they head to commencement of commercial production in the near future.” Government had budgeted 484,562 ounces last year but after a contraction on the world prices, revised the target downwards to 450,000 ounces or a 6.5 percent decline. The first half of 2014 witnessed a 24.6 percent contraction in gold exports earnings to US$226.7M.

Gold exports for the first half of 2014 declined 10 percent to 182,411 ounces. As a result, overall receipts from exports fell by 10.3 percent to US$534.2 million in the first half of 2014 compared to the corresponding period in 2013.

The gold industry achieved total declarations of 481,087 ounces in 2012, a record for the country, despite the falling prices then.
Congratulating the miners, GGDMA noted that this came despite extreme pressure caused by the low price of gold and with only limited support from the government once again.

“The Guyana Gold and Diamond Miner’s Association (GGDMA) congratulates local miners for their combined efforts to produce close to 390,000 ounces of gold for the year 2014. Although this is a shortfall on the 2013 record of 481,000 ounces our small and medium scale (SMS) gold miners delivered a heroic performance in 2014.”

GGDMA said it was confident that the operations of large scale operators –Canadian-owned Guyana Goldfields Inc. and Aussie-owned, Troy Resources Guyana Inc, expected to start this year, will help to boost the production figures.

The gold production shortfall would have severely affected revenue projections by Government with overall growth affected.
Gold has been a mainstay for the economy in recent years until prices fell out in 2012, forcing several operators to curtail operations. Before that, it had been one of the fastest growing employers, with workers attracted by the high pay despite the grueling hours and dangerous working conditions.

The spinoffs have seen the creation of numerous heavy machinery suppliers and other service providers. However, the price fall within the last two years, which has stabilized and hovering around US$1,200 per ounce, has become a major worry for miners, many of whom are heavily indebted to banks and suppliers.

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  • gigi  On 01/14/2015 at 9:16 pm

    Paper created gold trading on the stock market may be priced at US1,200 per ounce but the real stuff isn’t because the real stuff is in very high demand and hard to come by. Expect a big fallout if investors holding paper gold certificates ever decide to turn them in for the real stuff. The gold that is in circulation on the market is just a fraction of the paper created gold being traded on the market.

    The Guyana gov’t should either nationalize the gold industry or only let in local miners; that way any siphoning off of Guyana’s gold to sell on the blackmarket will at least end up in the hands of Guyanese and benefit Guyanese. These foreign corporations are doing just that and the Guyanese people are not benefiting. Particularly the small miners who seem to be suffering the most. This is so wrong!

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