Gov’t commits to protecting rights of workers during takeover of Aurora Gold Mine

The Ministry of Natural Resources has welcomed the announcement by SilverCorp Metals Inc. of its acquisition of the Aurora Gold Mine in Region Seven from the Guyana Goldfields Inc.

Both companies are Canadian owned.

The Ministry in a statement said that prior to approval being granted, it will carry out the necessary due diligence to ensure the company complies with all of its legal obligations especially honouring workers’ rights.

It added that it will “ensure that there is legal compliance with the proposed transfer of interests, and that matters pertaining to workers’ rights especially, and other important obligations, are satisfactorily addressed.”

The agreement for the acquisition was signed on April 26, 2020, and will include a loan of up to US$15 million to Guyana Goldfields Inc. to support the continuation of the Aurora Underground Mining Project in Guyana.

The underground mining project estimates 147,000 ounces annual gold production over a 14-year mine life.

The Ministry said as one of two large Gold Mining operations, Guyana Goldfields Inc. has contributed significantly, despite its internal and other difficulties, to annual gold declarations, and the Guyanese economy, by extension.

Therefore, the Government said it welcomes this investment that is expected to put the company in a more stable financial position to continue its operations.

Guyana Goldfields has been operating in Guyana since 2015.

At the end of January 2019, Guyana Goldfields employed 729 Guyanese nationals (representing approximately 96.4% of the overall workforce) and 27 expatriates.

Silvercorp Metals Inc. produces silver, lead and zinc metals in concentrates from mines in China where it also does underground mining.

The company will be paying US$74.8M or $105M Canadian dollars and a loan of US$15 million for ongoing operations at the Aurora Underground Project, as well as for certain working capital and general corporate purposes.

Rui Feng, Chairman and CEO of Silvercorp said in a statement;“we look forward to partnering with the Government of Guyana to make a successful entry into the region, leveraging Guyana Goldfield’s existing team and relationships to ensure a smooth transition and continued development that benefits all stakeholders.”

During a webcast on Monday, Vice President of Silvercorp Metals Inc. Lon Shaver described Guyana as a “mining friendly jurisdiction” and communication with the Guyana Government has begun.

He said the negotiations began a year ago for the definitive agreement.

Shaver said under the terms of the transaction, each holder of Guyana Goldfields shares will have the option to receive, for each Guyana Goldfields share held, C$0.60 in cash or 0.1195 of a Silvercorp common share, subject to a maximum cash consideration of C$33.2 million.

The company plans to roll out aggressive drilling programs, fast-track trucking distance to mill and uncertainty when it comes to funding of the Aurora Gold Mine operation.