Paris to decide fate of Russia-Canada gold mine in French Guiana

France’s environment minister, François de Rugy, is expected to announce in June the government’s official position on a proposed open-pit gold mine and precious metals industry in French Guiana, potentially the department’s largest, and it has locals divided.

The Montagne d’Or gold project, a joint venture between Russian billionaire Alexey Mordashov’s mining company, Nordgold, and Canadian junior Columbus Gold (TSX: CGT), was originally planned over an 800-hectare site between two protected natural reserves.

But after complaints from opponents to the mine, worried mainly about pollution and biodiversity loss, the French government formed a special committee to evaluate in detail the social and economic benefits, as well as the impacts of a gold mining industry in the French department, wedged between Brazil and Suriname.

In November, Paris decided the companies could move forward with permitting and development of the mine, but under certain conditions that would minimize the operation’s risks and impacts.

In September, the French National Commission of Public Debate had published a report on the public hearings carried-out for the Montagne d’Or gold project.

While the recommendations have not yet been released to the public, Columbus Gold said Tuesday that France’s Prime Minister Édouard Philippe said Paris was “deeply convinced” it was possible to develop the resources on Guyanese soil “in the best conditions on the environmental level” and with the agreement of the Guyanese.

The Vancouver-based miner also said the French government would soon appoint an official in charge of Guiana’s gold industry and is planning to send environment minister François de Rugy to announce Emmanuel Macron’s administration’s view on backing a gold industry in French Guiana.

The Montagne d’Or deposit has an estimated 3.85 million ounces of gold in 85.1 million measured and indicated tonnes grading 1.41 grams gold per tonne, and another 960,000 ounces gold contained within 20.2 million inferred tonnes grading 1.48 grams gold.

Based on the bankable feasibility study of 2017, the open-pit mine would produce 214,000 ounces of gold per year at total cash costs of $666 per ounce.

While 90% of French Guiana is covered by rainforest, it has attracted artisanal mining of its gold-rich soil for more than 150 years.

In the last decade, however, multinationals have started landing in the area, hoping to tap into deeper, untouched gold reserves.

Shares in Columbus Gold jumped almost 3% on the news and were last trading at 18 Canadian cents in Toronto. The company has a C$28.6 million market capitalization.