Guyana Goldfields not bothered by Venezuela’s claim, says it’s a non-issue

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By Devina Samaroo

Guyana-based Canadian Gold Mining Company, Guyana Goldfields Inc., is monitoring the developments regarding the Guyana/Venezuela border controversy as the firm’s mine is located in the Essequibo Region which is being claimed by the Spanish-speaking nation.

Scott Caldwell, the Chief Executive Officer (CEO), explained to media operatives at an event on Sunday, February 4, 2018, that while the Company is keeping an eye on the matter, the situation really is a “non-issue” for investors.

“Frankly, in the investment community, because of all the world court action historically supporting the existing border, we don’t see it as a risk … nor does Exxon (another major international investor whose operation is in the area being claimed by Venezuela). I’ve spoken with people at Exxon, not the Chairman of Exxon but Exxon themselves don’t see it as a risk,” Caldwell explained in response to a question asked during the firm’s media engagement activity.

The CEO added that: “We do monitor it and we talk to the Guyanese and Canadian and US governments [and] it’s not an issue. We talk about it but it is a non-issue, in our opinion, it’s a non-issue.”

The United Nations Secretary-General Antonio Guterres recently referred the long-running border controversy to the International Court of Justice.

The Guyana Goldfields Head said, if required, the Company is willing to participate in the process.

In 2015, a Venezuelan Ambassador had written to the mining company against its operations in Guyana, warning that it would be “infringing on the territorial sovereignty of Venezuela and committing unlawful actions which could incur legal consequences.”

Caldwell recalled that, at the time, the Company was advised to “do nothing” as it was a “frivolous claim and we do not respond to frivolous rumours”.

The Aurora Gold Mine, located in the Cuyuni-Mazaruni Region, is the Company’s flagship mine which reached commercial production January 1, 2016.

The mine is designed to produce 3.3 million ounces of gold, averaging 220,000 ounces per year, over an initial 15-year mine life.

Border controversy

By the Geneva Agreement of February 17, 1966, Guyana and Venezuela allowed for the UN Secretary-General to determine a resolution to the controversy which arose after Venezuelan contented that the Arbitral Award of 1899 which settled the country’s border was null and void.

Guyana is adamant that the 1899 Tribunal provided “a full, perfect and final settlement” but Venezuela denounced the Arbitral Award in 1962 at the Decolonisation Committee of the UN General Assembly as British Guiana sought Independence.

Guyana has accused Venezuela of a series of acts of aggression, starting with a Presidential decree of June 1968.  The border controversy flared again in early 2015 when American firm Exxon Mobil announced that it had made a “significant” oil discovery.

After threatening the company, the Venezuelan President Nicolás Maduro issued a decree on May 26, 2015, seeking to extend Venezuela’s land claim to also annex the country’s maritime space. Four years ago, Venezuela sent a naval ship into Guyanese waters and seized a U.S.-chartered oil survey ship and escorted it to Margarita Island.

In September 2015, Guyanese authorities also said the Venezuela army was up the Cuyuni River. In October, Canadian-based mining company Guyana Goldfields said it had received an “unfounded” notification of possible legal action by Venezuela over its operations in Guyana.

Guyana has set aside US$15 million of a signing bonus with ExxonMobil and its partners to pay legal fees to defend Guyana’s case if the matter is referred to the ICJ.

Several diplomats have expressed that Guyana can go to the ICJ alone if Venezuela refused to participate in the process.

So far, the Venezuelan government has criticised the UN decision to refer the matter to the ICJ.

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