Local partner takes Sun and Sand to court for US$38M

November 30, 2014 | By KNews | Filed Under News

By Kiana Wilburg
The private investor who brought the India based firm Sun and Sand Inc. to Guyana’s

 

The Manager for the Sun and Sand Hotel, Bhushan Chandna (left) presenting the plan for the hotel to President Donald Ramotar and Minister of Tourism, Irfaan Ali.

shores, with hopes of successfully having their joint venture into the mining sector realized, is now suing the company for US$38M (equivalent to $7.7B,) for not honouring its end of the bargain.
Sun and Sand Inc., owned by Rajesh Satija and managed by Company Secretary Bhushan Kumar, was brought to Guyana in 2012 by Garfield Harte, a local investor who travels often. His Power of Attorney is Beverley Barker of Lot 8 Middle Walk, Victoria, East Coast Demerara.
Harte owns three mining blocks in Cuyuni Mining District each valuing in excess of $168M. Based on a survey conducted, the mineral concentration of the blocks is expected to be over and above 26.6 tons of placer gold and 265,423 tons of quarts gold. The total income was estimated at US$17, 811, 279M.
With this in mind, Harte and the members of the India-based company, had several discussions, and decided that if they pooled their resources, a joint project in Guyana’s mineral sector would prove to be lucrative.
When they arrived in Guyana, the joint venture company, Sun and Sand Mining Resources Inc was incorporated by Harte’s lawyer, Joseph Harmon. The company has an office at Lot 288 Atlantic Gardens, East Coast Demerara.
The Agreement which they entered into in August 2012 said that Harte’s interior properties would be explored, minerals extracted and sold, and 18 percent of the profits would be given to him.
According to Clause Four of the Joint Venture Agreement (JVA) signed by the two partners, under the caption Commencement, a number of things were to be executed and completed by Sun and Sand Mining Inc. It was required to get a Purchase Contract for processing plants for all three blocks, in Bangkok by the end of August 2012, build camps and commence exploration in the first block of land by September –November 2012, complete exploration in all the three blocks by April, 2013 and commence production by April 2013.
Harte fulfilled all his obligations under the said agreement. He was required to get all equipment for the commencement of operation and did so. In fact, all the equipment has been in Guyana for in excess of one year. There has been no exploration or production by the Sun and Sand Mining Company in this venture.
Clause Seven of the JVA stipulated the percentage of the profits which should be had by Harte.
In breach of Clause Four and Seven of the JVA, Harte claims that the defendant, has failed, refused and or neglected to make payments in the sum of 18 percent which is equivalent to $7.7B had the JVA been carried through.
The investor said he attempted in several instances to make contact with the Company but was unable to reach them.
He was later surprised to learn that the Company teamed up with the government and local construction giant, BK International, to construct a US$54M five star hotel and casino on July 9. The hotel is still to be constructed even after the stakeholders involved announced that construction would begin within a week’s time after a grand launch in July.
Harte was also baffled when he discovered that his JVA partner obtained two prospecting licences from Manager of BK International, Brian Tiwarie.
With strong suspicion that the JVA may be doomed for failure before it even gets started, Harte decided to take legal recourse to recoup the billions in losses incurred.
Court documents revealed that Harte’s Power of Attorney brought the legal action against the Sun and San Company Secretary. The matter is expected to be heard before Commercial Court Judge, Rishi Persaud.
The Power of Attorney, Barker, also filed for an interim injunction against the company stakeholders and owners.
After noting the newspaper articles which showed that the Sun and Sand Company developed other “business interests,” she believes that they are likely to sell, mortgage or otherwise part with three super miners with CD with hydrocuclone, one bulldozer, one excavator, and one bush truck all acquired by Harte to satisfy other obligations connected with their new business venture.
She fears that they may flee the country with Harte’s assets and not pay a cent.
Barker is hoping that the court grants the injunction to block Kumar and Satija from leaving until “they pay up in court.”
Kaieteur News has tried to contact Sun and Sand owners to respond to allegations being made by Harte and Barker but efforts proved futile.
Sources at the Lands and Survey Department revealed that the company is still to complete payments for the Liliendaal land where the Sun and Sand hotel is expected to be constructed.
The Company’s assistant had told this newspaper that while Bhushan Chandna, the official in charge of the Hotel operations, was overseas; the company is pretty much interested in “other things” being mining. He had said that he would not be able to give comments on the hotel industry as the persons currently here are responsible for the mining arrangements and not the hotel.
The assistant had said that Chandna would be in Guyana until December 1.
On Friday evening, Chandna, his assistant, and Tiwarie were at Oasis Café engrossed in discussions.

views expressed.

December 14, 2014 | By KNews | Filed Under News

– Assures of safety measures for cyanide control

Canada-owned, Guyana Goldfields Inc., which is being described as the biggest investment in the local gold mining industry, projects 3.97 million oz. of gold production with the Aurora goldmines project over a 17-year period.

SAG mill making its way to Aurora, Region Seven

The statement was made at the company’s Annual General Meeting, early last week, where stakeholders were updated on operations. Currently, the Aurora site, Region Seven, is under massive construction for gold operations to begin mid-next year.
In addition to future projections, the company revealed that the US$6 million SAG mill has arrived and is currently being installed.
The purchase of the 7.9 x 6.0 metres (5.5 MW) SAG mill for the company represents its primary grinding solution for the initial milling facility is a significant milestone in the development of the project, Guyana Goldfields said.
According to President and Chief Executive Officer, Scott Caldwell, as the Aurora project comes closer to starting gold production, Guyana Goldfields has been given clearance by the Government of Guyana to employ up to 900 persons, as construction continues.
Stakeholders were also assured that the company has adopted safety systems in case of a dangerous cyanide spill.
“All of the facilities where the cyanide is handled are designed with protective measures,” said Caldwell. He went on to explain that if cyanide units were to burst then the plant would shut down in order to address the spill. Further measures would include neutralising the poisonous substance to that it can be effectively treated.
The assurance would be relevant as the last large scale miner, Omai Gold, came under scrutiny after a reported 3.4 million cubic meters, or 900 million gallons, of cyanide-laced water was released into the Essequibo waterways after a dam failure.
The company also highlighted that it is taking measures in adhering to environmental regulations. In fact, according to Chief Operations Officer (COO) Lello Gallass, it was estimated that the original plan would affect 3900 hectares of land, 2010. However, over eight years of research has resulted in a reduced plan of 800 hectares.
This along with environmentally conscious training programmes with employees, the COO said, is in keeping with the company’s commitment to environmental policy.
The company was hailed by stakeholders for their transparency in how operations are proceeding.

Australian mining company to import all supplies duty free

October 23, 2014 | By KNews | Filed Under News

…also enjoys right to remit all earnings, to pay no fees locally

Australian Gold producer Troy Resources Limited, recently inked an historic mineral agreement with the Guyana Government to set up a large scale mining operation in Guyana, but some are now questioning the conditions attached to the deal.
Under the agreement inked, Troy Resources will be able to remit all payments, including capital, any interest due or accrued and profits earned, without obligation to pay any fees, duties, taxes, administrative and other charges.
The company will also be exempted from capital gains tax on any transfers of controlling interests in mineral tenements between existing registered holders and the Company.
Furthermore, the company under the agreement will also enjoy a partial excise tax of 10 per cent on fuel, subject to a maximum cap of US$10 per litre.
The Minerals Agreement details all fiscal, property, import-export procedures, taxation and other related conditions for the development and operation of the Karouni project.
Under the agreement, royalty will be paid to Guyana at five per cent for gold when the world market price is less than US$1,000/oz.
If the world market price surpasses the US$1,000 mark, the royalty will be paid at a rate of eight per cent.
The corporate tax rate will be the lesser of the prevailing tax rate or 30 per cent.
Furthermore, Troy Resources will also enjoy the ability to import goods and supplies free of applicable duties and taxes.
The company is targeting more than 90,000 ounces of gold annually, estimating that the medium-scale mine life will be at least for seven years.
Following the signing of the agreement at Office of the President, Troy Resources said that the agreement reduces uncertainty for all parties, bringing transparency, confirming commitments and acknowledging the desire to work together with the Government, in the task of providing for a better investment climate and to move the country forward.
The Karouni Project, located west of the Omai area, in Region Seven, currently employs approximately 200 people. With construction to kick in shortly, it is projected that as many as 500 persons will be employed, including contractors and service personnel.
“The Karouni Project marks the first entry into Guyana by Troy Resources Limited through its wholly owned subsidiary Troy Guyana Inc. Troy’s other projects are located in Para State in Brazil and San Juan State in Argentina. All are focused on gold with the addition of silver in Argentina.”
President Donald Ramotar, who was present at the signing which included Natural Resources Minister, Robert Persaud, and Troy’s Executive Director Project Development, Ken Nilsson, noted that the signing was significant since it demonstrates growing investors’ confidence.
He, too, noted the spin-off effect from the investments by Troy, which included wages and supplies

Permission granted to local firm for medium-scale mining at Eagle Mountain

August 27, 2014 | By KNews | Filed Under News

The Guyana Geology and Mines Commission (GGMC) has granted a local company, Kilroy Mining Inc., a Medium Scale Mining Permit for a 250-hectare concession at Eagle Mountain, Potaro Mining District, in Region Seven.
According to an announcement by Goldsource Mines Inc., the 250-hectare portion is part of the Canadian company’s Eagle Mountain gold deposit located within its approximately 5,050 hectares prospecting licence (PL). The permit will allow for the mining of gold, diamonds, precious metals and precious minerals within the area.
Goldsource said that the Eagle Mountain PL is held by its 100%-owned subsidiary in Guyana, Stronghold Guyana Inc.
The Canadian firm said that a medium-scale mining permit is required under Guyana’s law to be held by a Guyanese national. Stronghold entered into agreements with Kilroy, a private “arm’s length” Guyanese company.
Stronghold and Kilroy will jointly operate the property and the latter has granted Stronghold the exclusive right to conduct mining operations on the property and other additional areas it has acquired.
“Stronghold will fund all expenditures on the property and receive 100% of all revenues, subject to applicable government royalties and a 2% net smelter return royalty to Kilroy as compensation for its participation.”
Ioannis Tsitos, Goldsource’s President said that “Following the recent announcement of the positive results of our Preliminary Economic Assessment for the Eagle Mountain gold deposit, we are extremely pleased with the grant of the permit. The project is now fully permitted for mining activities and ready for construction financing and subsequent Phase One development, as described in our News Release of July 31, 2014. The Company and its management are working aggressively with a staged production growth strategy to deliver real value to shareholders and to all other project stakeholders.”
As part of the agreement, Goldsource agreed to issue to Kilroy 250,000 common shares of the Company, subject to a 12-month hold period and approval of the TSX Venture Exchange.
Goldsource said yesterday that it is working aggressively to develop its advanced-stage, 100%-owned Eagle Mountain gold project in Guyana towards initial staged production in 2015.
The company said that it has an existing resource of 188,000 ounces and potentially up to “792,000 Inferred gold ounces, with strong potential to expand its resources.”
Since the closure of Omai Gold Mines a few years ago, Guyana has been without a large-scale gold mining company, but a rise in prices on the world market saw a rush by small miners which saw production reaching the Omai levels within the last two years.
Several foreign companies, including from Canada and Australia, have shown intense interest with the biggest being Guyana Goldfields and Troy Resources.

Unpaid Guyanese worried after Mining Company hit with top ranking resignations

By Kurt Campbell

Gregory Bobb says he hasn’t been paid his full salary since August 2013. [iNews’ Photo]

[www.inewsguyana.com] – Sacre Coeur Minerals Ltd, a Canadian Mining Company which holds 100% interest in approximately 978 square kilometers of mineral concessions in Guyana, has reportedly been hit with several international and local resignations.

This has caused more worry to erupt between a group of over 100 unpaid Guyanese who were employed by the company.

Last week iNews had reported that the company has fallen short on payment to its Guyanese workforce of approximately 150 persons. Reports are that employees were paid little or in some instances no money over the last year (August 2013 – August 2014) amid much promises, all of which the Company has failed to honour.

The Company in a press release on Wednesday, September 03, said it received resignations from its Chief Executive Officer (CEO), Chairman, Chief Financial Officer, Corporate Secretary and several Directors.

The release also stated that “furthermore, Gregory B. Sparks and Jennifer Todhunter have resigned as Directors of the Company’s Guyanese subsidiary, Sacre-Coeur Guyana Inc.”

The unpaid Guyanese are now left to wonder how they will be paid the accumulated sum of several million dollars.

Speaking to iNews last week, 33 – year – old Gregory Bobb, a former Drill Helper and Mines Foreman, claimed he is owed in excess of $2 million by the company.

The man, who has already solicited legal presentation and is still awaiting a response from the Company, recalled and presented his contract and pay slips to show that since June 2013, the Company began dropping back in payments.

Bobb, through his Attorney, asked the company to make full payments to him within two week, if not he warned that prompt and drastic legal action will be taken against them.

The distressed Bobb recalled too what he said were empty promises by the General Manager, Bjorn Jeune. He claimed that the company was indebted to hundreds more Guyanese employees and service providers which amounts to millions; adding that his $2 million plus was the highest they owed any single person.

He claimed he has been ignored in recent weeks when he tried to make arrangements to be paid after his service was terminated on August 14, 2014.