Guyana Goldfields Says Six Parties Interested in Buying Company, Project

Guyana Goldfields Inc. (GUY) has signed confidentiality agreements with six parties interested in buying the company and its Aurora gold project in the South American country, Chief Operating Officer Claude Lemasson said.

“We have been on the radar of many companies, I think, for quite a while,” Lemasson said in an interview yesterday at Guyana’s headquarters in Toronto.

Guyana received its license for Aurora, the first issued in the country for a large-scale gold mine since 1991, the company said last week. The project, which may have an initial cost of $400 million, is now fully permitted, Lemasson said. The company may sell stock or convertible bonds in the next four months to raise $100 million to $150 million to fund development, he said.

Guyana rose 3.9 percent to C$8.44 in Toronto, giving the company a market value of C$706.5 million ($673.3 million). The stock rose as much as 13 percent earlier, the biggest intraday gain since October 2009.

Guyana “would probably be at the top of a short list” of potential acquisition targets, Trevor Turnbull, a Toronto-based analyst at Scotia Capital Inc., said in a telephone interview.

“As a single-asset company with a project that is now fully permitted and essentially ready to go into production as soon as it can build the mine, it offers a great source of production for mid-size companies,” said Turnbull, who rates the shares “sector outperform.”

Open-Pit Mine

The six companies that have signed confidentiality agreements are “well established, well funded and well respected,” Lemasson said. The list includes majors and mid- tier miners, he said, declining to give more details. Guyana has a data room open, he said.

The company plans to complete a feasibility study for Aurora by mid-January, Lemasson said. An open-pit mine and processing facilities may cost about $400 million, he said. The company is still considering how quickly it will start developing underground operations, which may cost another $375 million to $400 million.

Commercial production at Aurora, at an annual rate of about 250,000 ounces of gold, is forecast to begin in the first half of 2014, Lemasson said.

International Finance Corp., a shareholder, is helping arrange a debt package for the project with other development agencies, Lemasson said. The debt and some equipment financing, which may be in place by the second half of 2012, would probably cover $150 million to $175 million of the project’s cost, Lemasson said.

There have been 22 gold-mining acquisitions larger than $100 million announced this year, valued at $22.1 billion, according to data compiled by Bloomberg.

To contact the reporter on this story: Liezel Hill in Toronto at

To contact the editor responsible for this story: Simon Casey at

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