– following cash flow woes after shutdown
– promises to pay severance by this weekend
After days of uncertainty on the way forward, Australian mining company Troy Resources has taken a decision to dismiss almost 400 workers, a month after it suspended major parts of its operations following the death of one of its employees.
According to an internal memo that was circulated, workers who were initially sent off were told that they would be released by the company as of this week and paid their severance by Friday, November 22.
“The Board has thus decided that all personnel currently stood down will be terminated as from this week. This decision was made with reluctance and will, nevertheless, assist employees by providing a termination pay-out.
“It is expected that Troy will go back to re-hiring employees as needed for a start-up in the near future and Troy hopes most current employees will be available and willing to return to work,” the memo further stated.
It had initially been reported that 386 workers were sent off base with their jobs in limbo until the company could decide on a way forward while the company kept over 100 of the remaining employees on the ground at its mining operations in Karouni, Region Seven (Cuyuni-Mazaruni).
Last week, top officials from Troy Resources had revealed that a decision on the future of the company would be made when the Board of Directors meet. Guyana Times was reliably informed that that meeting was held on Sunday and that a decision would be announced soon.
During an interaction with the media while facilitating a tour, Troy Resources Chief Executive Officer (CEO) Ken Nilsson had spoken of pressure being brought on his company. Nilsson spoke about the financial cost being incurred to keep the remaining operations functioning.
“In a normal month, our total operating cost is around US$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,” he said.
It is understood that all but its exploration activities were suspended in the wake of the death of geologist Ryan Taylor in a mining pit accident. Nilsson had 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 had explained.
“Without doing anything, I can last another month. But I cannot go back to production without having a source of money to back you up. I need to be sure that if anything goes wrong or a mechanical problem [arises], I need to have a piggybank of money to back me up,” the CEO had said.