Proposals received for abandoned Troy Resources mining pit – Min Bharrat

…says Govt hoping for local consortium to take over large-scale operation

The Government is in receipt of proposals from companies willing to take over the abandoned Troy Resources mining pit in Karouni, Region Seven (Cuyuni-Mazaruni), though it remains hopeful that a consortium of local miners can take over the large-scale operation.
This is according to Natural Resources Minister Vickram Bharrat when asked for an update by Guyana Times on the sidelines of a meeting with goldsmiths from across the country on Tuesday.
“We’ve had a few proposals that we’re looking at presently. They themselves have gone into the property and done some assessments on the plant and what exists there, and the resources that are available as well. But to date, we have not finalised any agreement with any investor.
“We’ve already had talks with [Guyana] Gold and Diamond Miners Association [GGDMA], to see if we can have a local consortium established, to engage in the large-scale operation at Troy Resources, which includes restarting the mill or processing plant, as well as mining from the main pits,” Bharrat said.
Earlier in his presentation, Bharrat had explained the impact that the COVID-19 pandemic and the death of former Troy Resources Chief Executive Officer (CEO) Ken Nilsson had on Troy’s overall operations, to the point where the Australia-based company never recovered and subsequently left Guyana.
“We have medium-scale operators who have left the mining sector. and in contracting now. Those are some of the challenges we are faced with. And then, of course, Troy Resources closing down didn’t help the situation either. Troy Resources would have closed down during the COVID period, mainly because of 1) the CEO who had a lot of interest in keeping Troy Resources going, he died of COVID. Almost the entire workforce at Troy had COVID. They had to shut down the operation. And it was difficult for them to recover from that. Today, we would have acquired that property. It’s back with the State. And we’re looking for investors to restart the operation,” Bharrat said.
The company did leave Guyana under a cloud, however, owing the State over $2.6 billion in royalties. This had prompted the Ministry of Legal Affairs to write the company a demand letter and to pursue legal means of recovering the monies owed. According to Bharrat, this process continues. In the meantime, local small miners have been issued permits to mine around the area, while the main pit is reserved for a large-scale investor(s).
“I know that the AG [Attorney General] chambers is taking action. They have started the process to do this. The Ministry of Natural Resources, our task was to secure the property …which we have done. And we’ve been policing and monitoring the property. We’ve issued 100 small property holdings to local miners. Today, we have local miners operating in that area and producing.
“But with regards to the liability, the AG office is taking steps. But the small-scale mining that is ongoing now, if I may add, is not from the main pits or the areas in and around the processing plants. We have reserved that area, in the interest of finding another investor, be it local or foreign investors.
Troy Resources had been operational in Guyana since 2015 and out of the 634,905 ounces of gold declared in 2019, Troy Resources, as one of Guyana’s largest gold producers, accounted for a large portion of it. The company had reported production figures of 58,118 ounces of gold from its Karouni, Region Seven mine for 2019. In 2018, its gold production figure was 70,207.
It had also been announced in 2021 that the company would be partnering with Barrick Gold Corporation, a Canadian company with operations around the world. Based on the joint venture, the company was supposed to explore for gold near the Karouni mining site in Region Seven.
All of that has since fallen through and following the company’s departure from Guyana last year, the Government – through the Guyana Geology and Mines Commission (GGMC); the Guyana Revenue Authority (GRA) and the Guyana Police Force – had taken control of the Karouni mine.
In addition to failing to pay outstanding royalties, the Australian mining company had failed to pay rental fees as well as adhere to its environmental obligations to the Environmental Protection Agency (EPA) and work programme.
Moreover, a number of companies and sub-contractors were also owed millions by Troy. In fact, there were workers who are owed wages for extended periods, prompting the Labour Ministry to intervene.
It was further reported that Troy Resources had entered into receivership, the process whereby creditors sell off a company’s assets to recover monies owed.
The Government had said that Troy actually initiated this process, but due to poor site management, persons have been raiding the site and stealing equipment and materials. (G3)