Canadian company mining 25-mile Konawaruk claim
Stabroek News
January 25, 2004
With prices now around US$420 per ounce and signs that the recovery is here to stay, the gold rush is on in Guyana's mining sector.
"There is an aggressive search by Canadian junior members for gold and there is intense interest at the moment in Guyana," says Robeson Benn, chairman of the Guyana Geology and Mines Commission (GGMC).
United Development Resources (UDI) is one such company, which has recently teamed up with Guyana Primary Resources, headed by Sheik Hassan, to explore and mine for gold and other precious metals over a 25-mile area in the Konawaruk.
Guyana Primary Re-sources does not own the claims covered in this project, but has an agreement with OKO Mining Development for irrevocable, exclusive title rights to this mineral property. According to documents in the company registry, OKO Mining is owned by Michael Vieira.
Benn says he has not seen the mining plans for UDI's operation in Guyana, but company officials say it is in the process of being filed and work has already started on the claims. Benn also gives the assurance that the firm proposes to employ dry, alluvial mining and not hydraulic mining, which poses a threat to the environment.
Alluvial mining is a term referred to the use of any method to extract gold deposited by rivers on the beds or banks. Hydraulic mining, however, is the process in which pressure hoses wash down the sides of river banks, sending slurry into the rivers. The GGMC is now advocating the phasing out of hydraulic mining and the use of more environmentally friendly methods. Dry mining, which moves aside non-gold bearing soil to allow for mining of the gold bearing deposits is now being used in Guyana in some cases.
UDI says it intends to bring in a total of 30 dredges over a six- to ten-year period for its investment in Guyana.
Robert Doherty and Chris Knudsen of UDI were in the country recently and met with Prime Minister Sam Hinds and Benn as they sought to conduct a due diligence on the mining and exploration activities underway on the company's interest between Breakfast Point and Crab Creek on the Konawaruk river. It was the firm's first visit and officials say they have to report to potential investors on their findings to be able to raise more financing for the project.
The Konawaruk area is known for holding lucrative mining properties and the company's radar satellite imagery shows "exciting deposits", company officials said. UDI is described as a company in the development stages and it is seeking resources internationally to invest in its operation in Guyana and another in Canada. The company retained Hassan as a lead consultant for the project in Guyana.
The firm says in one of its press releases that it has also entered into a joint venture with Tumbleweed Inc (Guyana) for a claim of 190 miles on the Mazaruni river. UDI is providing the dredging equipment for this project. The agreement between UDI and Guyana Primary Resources is for a 50/50 split of the proceeds.
"What we have seen shows tremendous potential...there are numerous interesting properties in Guyana," Doherty told Stabroek News.
The local associates of the firm note that there is no single company around to produce the 300,000 ounces a gold per year that Omai churned out in the past and it is the medium-scale mines which will have to meet this shortfall in production in the coming years. The industry is hoping that five to ten medium-sized mining operations can fill this space.
UDI already has two dredges working and will be moving in other heavy equipment. The first dredge came in on June 1 last year and the second was brought in more recently.
UDI says it is looking to acquire additional properties in Guyana, which have interesting geological features, with known geological work in areas and proven resources. The firm is looking at a number of sites.
The company says it intends to be a good corporate citizen and to operate in environmentally friendly manner. "We are not going to do any damage to the environment. We are going to improve the quality of the Konawaruk... we are seeing mercury in the gold we are taking out and will take out as much of the contaminated gold as we can," company officials said.
The firm says it will use a gravitational separation process and not mercury and also intends to clear a channel in the Konawaruk.
To demonstrate what good corporate citizens they could be, the firm donated $1.2 million to charity last Monday.