Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Dual-listed Troy Resources (TSX, ASX:TRY) says its Karouni gold project in Guyana should begin wet commissioning in early September, about six months after construction started in February.
The Australian company started building the site, which envisions two open pits and one underground mine, soon after the environmental permit was issued in January.
“The past month or so has been an extremely busy period at Karouni as the construction team of over 500 employees and contractors worked through heavy seasonal rainfall to push completion of the plant as far as possible,” Troy Resources stated in an operational update published on Friday. “At the end of June, the only major items that were still under construction were the Mill and the Thickener, with all the other major components and site facilities ready for power connection and commissioning. All site infrastructure work is complete and all the Administration buildings are functioning.”
A preliminary economic assessment (PEA) issued in January, 2014, has the mine in north-central Guyana producing 90,000 ounces a year for seven years, with production of 102,000 ounces gold in its first year. The average grade is 4.13 grams per tonne and the all in-cash costs are $805 per ounce.
Troy says the first gold would be poured around 3 to 4 weeks after the start of wet commissioning. The project will be developed initially as an open-cut operation at the Smarts and Hicks deposits, followed by underground mining at Smarts.
Despite the positive news, investors were not moved to bid up Troy’s stock price. The company was off slightly on Friday on the ASX, slipping 1.35 percent to 36.5 cents a share, at a market cap of $104 million.
2 Comments
luxiano
coorrecion this project is not in Guyana, it is in disputed territory which was was stripped to Venezuela
fazan
Troy Recourses is viewed by the 14 mile Issano Community as
an oppressor, the company has officiated several unofficial deliberations where
the community was summoned to make proposals for compensation and
representatives from the company kept rejecting those proposals. The company
made an independent proposal in a proposed E.S.I.A. document that it also
backtracked on, leaving the residents despondent. The Guyana Geology and Mines Comission
had issued an ultimatum to residents to vacate the location at one of the Troy Recourses
meeting, this prompted legal action by the community to protect their homestead
and businesses. Troy Resources have since refereed to this action by the
community as hostile and has reacted with hostility and disregard for personal
livelihood.
Troy Recourses of recent had re engaged the community in
discussions and requested a proposal, a prerequisite to discussions was that
legal proceedings be withdrawn, the community after withdrawing the legal
proceeding, proposed that the company make settlement based on the company
proposed ESIA proposal, to this the company informed the community after three
weeks of deliberations that it is not going to pay any compensation. This is a
very disturbing development since residents have waited in excess of two years
to have this matter resolved.
It was established in the scoping sessions held in
preparation for this investment that the use of cyanide in the mining
operations makes it dangerous for the 14 mile community to remain. This along
with other pollution from the mine site makes it necessary for Troy Resources
to come to an amicable solution to this problem. Troy Recourses had proposed
that it will assist businesses to relocate, however the proposed relocation
site is not feasible to do business, does not have resources to mine and will
prove to be a disaster. The Residents and Business owners are proposing that
Troy Recourses honor the ESIA agreement that they proposed for resettlement and
businesses will be able to divest, persons will be able to make a new start and
restore their livelihoods.
It is with frustration that the 14 mile issano
residents appeal with troy resources as it boast to be a good cooperate citizen in Guyana that
it reconsider its position with dealing with this community as we are located
in a direction that will take dust and other air borne pollutants from your
mine site in our homes, that our potable water supplies and road acceses are
impeded, that our businesses are made to suffer, that conflicts between
staffers of the company and residents continue to escalate and armed security
forces are seen by the residents as a treat to life and property. This
situation does not offer for a good cooperate environment to conduct a mining
operations and needs to be resolved