GUYANA is generally off the radar for mining companies. But with a pro-mining government and the allure of unchartered territory, the opportunities on offer can be rewarding for those willing to give it a chance.
Nestled between Venezuela and Suriname at the top of South America, Guyana hosts the Proterozoic-age craton known as the Guiana Shield, which is prospective for gold and bauxite mineralisation.
There is some continuity between the Guiana Shield and Birmian Shield of west Africa, but the Guinea Shield remains relatively underexplored in comparison.
There are no modern mines running in the English-speaking country.
But less than 10 years ago, saw the Omai operation produce about 3.6 million ounces of gold during its 13-year mine life.
It shut in 2005, leaving artisanal miners with a majority stake in the country’s mining scene.
Last year, official gold production from Guyana was about 400,000oz.
But the country is ready for its next big mine and the government is doing what it takes to attract further foreign investment to the country.
Azimuth Resources, which has been exploring in the country via its West Omai and East Omai gold projects, has had a foot hold there for more than three years.
Azimuth executive director Richard Monti said the government had been welcoming of foreign investment in its mineral riches.
“The government can see that gold mining is a very important industry to them and they are very supportive of a modern mine being started up,” Monti said.
Guyana’s history has been marred by its fair share of political instability, with the country experiencing a long bout of economic depression until the first declared free elections in the early 1990s marked a turning point for the country.
The attraction of Guyana as a mining destination is somewhat mixed.
On the one side is the lure of unchartered, virgin territory, but inaccessible jungle and the need to be located in close proximity to infrastructure have put it in the too hard basket for some.
Monti said while there were a handful of TSX-listed companies exploring in Guyana, they were the only ASX-listed company doing so.
“The problem we have in Australia is that no one knows where Guyana is until we talk about cricket, because it’s part of the West Indies,” he said.
“It has the same geology as west Africa and there has probably been, dare I say, 10 or 20 times the money spent on west Africa [than Guyana] and part of the reason for that is that it’s a bit of a forgotten corner of the world.”
It may not hold that tag for too much longer, with Azimuth aspiring to be a gold producer in Guyana within the next five years, while other companies are also making inroads.
TSX-listed Sandspring Resources is advancing its multi-million ounce Toroparu gold-copper deposit towards potential large-scale gold and copper production in 2015.
Last month, Perth-based Alicanto Minerals inked a deal with Takara Resources to acquire its subsidiary, StrataGold Guyana, owner of the Arakaka and Tassawini gold projects in northern Guyana.
The agreement includes the acquisition of the established camps at both projects, as well as administrative offices and staff in the capital city of Georgetown.
The projects consist of a number of permits covering about 550sq.km within the northern Guyana Shield.
To date, more than $US40 million ($A38.2 million) has been spent on the projects.
While Alicanto is new to Guyana, Azimuth, which last year secured a dual-listing on the TSX, is forging ahead with its projects.
The company’s flagship project, West Omai, sits astride a largely unexplored 30-40km strike length of the same structural stratigraphic corridor that host’s the historic Omai gold mine.
The inferred resource for West Omai’s Hicks and Smarts deposits totals 12.4 million tonnes at 3.1 grams per tonne gold for a contained 1.22Moz.
The company’s focus on aggressive exploration at the project is paying off, with Azimuth announcing the discovery of high-gold grade at the Larken prospect.
Drilling at the project returned hits of 12m at 4.8gpt gold from 25m and 5m at 2.5gpt gold from 91m.
“We’re very excited about it [Larken], it’s the best thing we’ve hit in the last six months,” Monti said.
Azimuth will continue to drill at Larken, part of West Omai, and says it is toying with the idea of starting a scoping study for the project.
While Azimuth is confident it can uncover a lot more ounces at the project, the company also believes it will be a viable development at the resource.
“We might push ahead on the exploration front or we may push hard on the development scenario,” Monti said.
“Either way, we think we’ve got enough for a project now, but it’s just a matter of if we want a bigger project or not.”
A final decision will be made once the company has appointed a new CEO.
With a population of about 750,000 people, Guyana is probably not much bigger than the size on England.
Monti admits the large amount of inaccessible jungle in Guyana may deter other exploration companies looking to enter the country.
This is not a problem for Azimuth, which has a land holding of about 9000sq.km, equating to about 240km of the belt, which is far more drill-friendly than the far northwest area of the country.
Importantly, little exploration has been undertaken on Azimuth’s tenure and in the country in general.
“It [Guyana] hasn’t been explored at all,” Monti said.
“We’re very positive we’ll find lots here because of the simple fact there’s been next to no exploration done on our ground position.”
While Monti says Guyana is a great place to be working in, he doesn’t expect ASX-listed companies to be flocking in droves overnight.
“Unless things change in the market, everyone’s kind of retracting rather than expanding,” Monti said.
Monti said while most of the tenure in the prospective areas of the country already tied up, opportunities still remained to the northwest of them.
While some dismiss Guyana as a prospective mining destination, Monti said he would not want to work anywhere else.
In terms of sovereign risk, Monti likes to think it’s a lot less than some other mining destinations.
“You go to west Africa where you’ve currently got the French air force bombing in the north and you’ve got every other country in west Africa threating to hike up taxes and the like,” he said.
“I would much rather be working in Guyana than anywhere in west Africa.”
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