…losses estimated at US$5M and counting
– exploring possibility of future underground mining venture
Since closing down its mining and processing operations, Troy Resources has sustained heavy losses from the downtime at its Karouni location. The company does have an eye on the future, however, a future that could include underground mining.
This was revealed when the company facilitated a media tour on Thursday, at its Karouni, Region Seven location. The company’s Chief Executive Officer, Ken Nilsson, explained that since they suspended its mining and processing operations, the company has lost US$6 million in revenue.
“In a normal month, our total operating cost is around $4 million, plus we have (arrears to pay). So we need about US$5 million. About US$3 million goes back into the local economy in the form of wages, purchases and all the suppliers. So US$3 million is not going back into the economy. You will see the effect of that next month”.
“So the total loss for us last month, since September, our total cash inflow is roughly US$6 million. So we have no inflows. For the last month, we lost around that. So it costs us a lot of money. To get the money, we need to produce a minimum of 4000 ounces per month. And we’ve not produced 4000 ounces (in a while). To be comfortable, we need US$5 million. We could survive on US$4 million.”
It is understood that after operations were suspended in the wake of the death of geologist Ryan Taylor in a mining pit accident, approximately 400 workers have left the site. Nilsson explained that it costs a hefty sum per day to maintain the remaining workers in the downsized operation.
“It would have been very easy for me to say, shut everything down, put it in cold storage until things have settled down. But we choose to believe no, we can sort this out. I don’t have issues with governments. Everyone is doing what they have to do,” he explained.
According to Nilsson, however, a decision on the way forward is expected by next week. Asked if this way forward could include downsizing its workforce, he noted that such decisions will depend on a number of factors.
However, the company remains optimistic of operations restarting in the near future. One of the things being considered is underground mining, with Nilsson explaining that such a venture could be a possibility at its Smart-3 mining pit.
At present, the Smart-3 pit has been shut down since March 2019, while it awaits the installation of slope monitors and other infrastructure to ensure safety. But according to Nilsson, if the company decides to go the underground route, it could unlock a potential 100,000 ounces of gold.
“That one, we opened it, it started giving us problems, we shut it down. At the moment, we’re looking at what we need to move to restore the original designs in here and go back down. We’re looking at the economics of it but if we continue with it, it’ll be sometime next year because it needs to be funded.”
“The options we have here are two-fold. We can do the cutback and get back down into it and it’ll cost us whatever it is. Or we can do a decline and go underground and take out the ore underground. Eventually, here, you will most likely have an underground mine. Because there’s a reasonable amount of ore. So you’re talking maybe 100,000 ounces in underground resources.”
According to Nilsson, the instructions to install the slope monitors came from the Guyana Geology and Mines Commission (GGMC). Slope monitors are used to give mining companies a heads up when a mining pit is about to fail.
GGMC also issued the company instructions to clear up a certain part of the pit wall. In defending the pit, however, Nilsson noted that heavy rain has affected the pit’s appearance and resulted in it forming unnatural slopes.
One other company, Guyana Goldfields, has started underground mining exploration at Aurora Gold Mine, where it is expected that a substantial amount of ore is present. It was only this year that they received clearance from the Environmental Protection Agency (EPA).