The Story Within The Story…Fuel tax reduction, underground mining and financing for small miners
By Leonard Gildarie
This past week has seen some developments in the mining sector. Government has agreed to slash 10 percent off the tax for fuel, as part of a raft of measures to inject some life into the gold sector. These would follow tax incentives on spare parts and equipment and 4 x 4 pickups.
Dr. Andrew Ramcharan: Thinking outside the box
This year, too, in terms of production, is expected to be a much better year as far as declaration is concerned. While the small- and medium-scale miners managed to scrape in 387,000 ounces, two large gold mining companies are expected to be up and running this year. It would not be hard to envisage declaration surpassing 500,000 ounces. Yes, there you have it. I will be the first to say it.
But miners will have to continue seeking ways to reduce costs. The traditional ways and low recovery rates can no longer cut it.
This week, as we close the chapter on this remarkable sector, I want to touch on the scenario of Guyana moving to underground mining.
It is a totally different ballgame. At the risk of sounding unpatriotic, from several incidents of wall collapses and other incidents in the goldfields, I am tempted to say that we, as a people, like to throw caution to the wind. I believe that per capita, the number of deaths in the ‘gold bush’, is among the highest in the world. The figures, of course, would include murders and accidents. Every week, there is something or other happening. Our population can ill-afford it. We are losing too many, too fast.
Miners will have to find ways also to seek joint ventures or other forms of financing away from the traditional commercial banks.
Do we dare hope that some of our home-grown companies can move into the international stock markets?
Well, according to one company, with the right advice, miners and regulators alike can maximize on the many opportunities that exist.
Guyanese-Canadian, Dr. Andrew Ramcharan, has returned to Guyana and with his company, AAR Mining Consultancy Firm, intends to move Guyana to the next level. Not only does he have the background, but connections as well.
AAR promises to offer a wide range of services to both open pit and underground mining projects.
Ramcharan is targeting banks, Government, major mining companies, exploration and development firms, law firms, individual investors, international organizations and private equity ventures.
A truck with fuel drums at Rubis Gas Station, Providence.
He has worked as far as Alaska, Middle East, Chile, South Africa, Russia, Portugal, and in the underground mines of Canada. He has now partnered with local environmental consultants. The company has expertise, with over 100 mining projects worldwide.
According to Ramcharan, a former employee of the Guyana Geology and Mines Commission, he has international experience in project evaluation, due diligence, mergers and acquisitions, cost estimates, 3D modeling, and financial analysis. He has worked in project start-ups to production, investment banking, consultancy and corporate development.
He has been involved in gold, quarries, coal, industrial minerals, base metals and precious metal mining projects around the world and has assisted in formulation of regulatory documents and mining acts.
As part of his duties, Ramcharan, while working overseas, was involved in major takeovers valued at over US$800m, private placements $20m, raising finance $1B, and fending hostile takeovers.
With his training at the Colorado School of Mines, the University of Leoben and Harvard University’s Continuing Education program, the consultant believes that the time is right for Guyana to move to the next phase.
The current Mining Act, he says, does not cater for underground mining, or copper mining.
He pointed out that in the case of larger companies, like Guyana Goldfields and Troy Resources, they have to go overseas to hire accredited experts to prepare key reports, including of targets and progress that have to be published in keeping with regulatory requirements. AAR has that expertise, the consultant explained.
AAR also has the capacity to conduct due diligence on investors, Ramcharran said.
He has worked also in IAMGOLD, a company that has operations in Suriname and Trinidad.
So with gold prices on the low side, why has AAR decided to come?
The consultant made it clear that the current gold price situation is an artificial one that cannot last.
“Gold works in cycles. It will go up. So it is an opportune time to come in.”
Ramcharan intends to go after small miners who have some money and want to expand.
“There is a lot of money out there. We can either set up the operations for a takeout or make it attractive enough that an investor can come on board with the small miner. We have this expertise. You need to do the paperwork, and that is what we do.”
Is Guyana ready for a new way of doing business? Only time will tell.
We have delved, in the past weeks into this sector which for many, remained a mystery.
I have asked our friends down at the New Guyana Marketing Corporation to provide us with details of the coconut industry. That industry has been experiencing phenomenal growth in recent years, after an age-old myth that coconut was bad for the health, was duly proven otherwise.
Quite a number of farmers are cashing in. I am hoping we can have those figures.
Have a pleasant week and please do continue to send those comments to email@example.com or call weekdays on 225-8491.