Australian mining company Troy Resources has cleared the air that it is not shutting down operations in Guyana but is merely mulling a temporary halt at the underground mine in Region Seven (Cuyuni-Mazaruni).
Only recently, the company disclosed in its market update that previous timelines set for the start of production at the country’s first underground mining site, Smarts Underground Prospect, would be delayed as a result of additional drilling being requested by the geotechnical consultants and the resource calculation, as well as lack of contractors and service providers due to the COVID-19 pandemic.
In a statement on Wednesday, Chief Executive Officer & Chief Managing Director of Troy Resources, Ken Nilsson, explained that the announcements were meant to update the market and not to be advice that a shutdown of operations is imminent.
“In light of the tightening ore supply it is necessary to keep the share market updated more closely. The actual announcement was also to highlight the fact that Troy has shifted some of its focus to a new area. The announcement is a statement of the current status of the Company’s operations and probable actions it may take,” Nilsson stated.
According to the CEO, the timing of reduction of mining is ultimately dependent on results from the test mining programme at the Goldstar area and any other additional sources. With that being the case, he noted there is currently no fixed date set as to when this could take place, adding that this is a normal scenario in the life of any mine where new discoveries or conversion of reserves may not keep up with production demands.
Initially, Nilsson said the company had hoped to have a seamless transfer from open pit to underground mining with minimal impact on the overall operation except for the open pit mining operations.
“However, with the diminishing size of the open pits the amount of material needing to be moved for a given volume of ore diminishes, therefore requiring less machinery. The delay of the underground operation is currently at about 2 months. The initial work which was planned to start around the 1st of July now seems more likely to take place in October. We anticipate that all preparatory technical work on the underground operations will be completed by mid to late June,” he outlined.
On this note, the Troy Resources MD pointed out that the need for goods and services will gradually diminish during this time until operations resume and get back to full capacity.
“In the interim, exploration is currently ongoing with drilling to be resumed shortly, in addition to other activities necessary to meet our commitments to suppliers and others by ensuring that we have funding. Should it be the case, the process of going into Care and Maintenance is not an instant event. The downsizing is likely to occur over several months. The exercise of going into Care and Maintenance is not indicative of a shut down: it is merely a mechanism by which a company can restructure and reprioritize its operations,” he added.
Nilsson reminded that a similar scenario recently played out at the Aurora Project.
“When persons have to be stood down it will be a gradual process depending on the above factors, but a fixed number is difficult to predict at this time as it is dependent on the success of the activities explained above. But there will certainly be a group remaining for rehabilitation work and other tasks. In the event of restarting mining at full capacity, existing staff and those released recently will have priority in the restaffing. In the case of any layoffs, they would be done in accordance with the National laws and practices,” the Troy Resources CEO reassured.
Meanwhile, with regards to the recent acquisition of tenements in the Potaro area, Nilsson noted that this is not an uncommon event for any mining company.
Since entering Guyana, he reminded that Troy Resources has continuously acquired what it considered to be “areas with the potential for mineralisation.”
However, he added that there are of course no absolute guarantees of finding a commercially viable resource. In the Potaro acquisition, like in all other areas, he said tenements are acquired from several different tenement holders and were done in keeping with all regulatory requirements.
As one of Guyana’s largest gold producers, Troy Resources has accounted for a large portion of the 634,905 ounces of gold declared in 2019.
The Australian-owned mining company reported production figures of 58,118 ounces of gold from its Region Seven’s Karouni mine for 2019. The previous year, Troy Resources gold production figure was 70,207. [Guyana Times]