Guyana Goldfields has released its second-quarter earnings, showing that the company produced 57,500 ounces of gold for the year and 28,500 ounces for the second quarter in 2020, notwithstanding the layoffs and the company entering a care and maintenance period.
Aurora Gold Mine, Goldfields’ subsidiary
This info is according to the financial results they filed with regulators. In a statement on Tuesday, Goldfields noted that this amount exceeded their “guidance” of 45,000 to 50,000 ounces for the first half of 2020.
According to the company, they received revenue of $53.7 million in the second quarter, with the total for the first six months of the year adding up to $92.3 million. They also explained that they have paid out $2 million in employee termination benefits, lower than the previous estimate of $3.2 million. In their filings, they also provided info on their care and maintenance programme.
“Ongoing costs for care and maintenance are estimated to be approximately $1.0 million per month, including all costs at site and associated general and administrative costs to keep the property in good standing, as required by our Mineral Agreement and Mining License, each with the Government of Guyana.”
“In addition, during the period of care and maintenance, we estimate corporate and administrative costs of $0.5 million to $0.8 million per month for overhead for our corporate office,” they also announced.
When Goldfields entered into its agreement to sell its shares to Chinese mining company Zijin Mining Group Co, the company was given access to a loan facility of US$30 million. According to Goldfields in its filings, they have a loan balance of $6.5 million.
“The Loan balance of $6.5 million is as a result of the first advance under the Zijin Facility, following our payment to Silvercorp Metals Inc of a C$9.0 million termination fee. Subsequent to the quarter, on July 27, 2020, we requested an additional drawdown of $5.5 million, which will bring the total drawn on the Zijin Facility to $12.0 million,” Goldfields said.
In fact, it was Silvercorp that had previously entered an agreement with fellow Canadian company Guyana Goldfields for Silvercorp to buy out their shares. That was until Zijin Mining Group Co, a leading global mining company specialising in gold, copper, zinc, and other mineral resource exploration and development – bettered their purchasing price and the conditions that were agreed upon.
Silvercorp was given an option to better Zijin’s price within a certain timeframe. However, Silvercorp failed to make a superior offer, resulting in Guyana Goldfields accepting the offer of the Chinese mining company. The agreement between the two was finalised at an annual and special meeting of shareholders on July 27.
