Guyana has signed a $1 billion agreement with Canada's Guyana Goldfields Inc for developing the Aurora Gold Project, the largest private mining investment in the South America nation.
This is the first large-scale mining license to be issued in the gold sector in Guyana since 1991.
Under the terms o the deal, Toronto-based Guyana Goldfields will pay 5-per cent as mining royalty when gold sells for $1,000 an ounce and 8 per cent when the price is greater. It will also pay a corporate income tax of 30 per cent.
The company will also get duty and value added tax exemptions on all imports of equipment and materials for the Aurora Gold Project, including the construction and operation of a planned port facility, road and power improvements and the construction and operation of the mine.
Guyana Goldfields will come with a feasibility report by January 2012, but expects the Aurora Gold Project to have an open-pit and an underground mine, which would cost around $375 million each to build.
It expects the open-pit to produce around 5,000 - 9,000 tonnes of gold per day and the underground mine around 3,600 - 4,400 tonnes per day. The cost of mining would be around $400 per ounce.