Rosebel was built last year at a cost of US$95 million and will employ about 600 people while in production. Over the planned 10-year life, the mine is expected to produce an average of 220,000 oz. gold per year at a cash cost of about US$215 per oz.
The mine will exploit a reserve base of 47 million tonnes grading 1.6 grams gold per tonne (or 2.4 million contained ounces gold), though efforts to expand resources are already under way.
For Cambior, Rosebel production effectively replaces output from the nearly exhausted Omai gold mine in neighbouring Guyana.
No stranger to the Guiana Shield, Cambior has been involved in the Rosebel project since 1994, when it agreed to earn a half-interest in the property from Golden Star by spending US$6.4 million on exploration and development.
Rosebel remained a 50-50 joint venture between the two until 2002, when Cambior acquired Golden Star’s interest for US$8 million plus the Rosebel royalty.
To acquire the Rosebel royalty, Guyanor will pay Golden Star US$6 million on closing and another US$6 million six months later. Golden Star will receive further payments if production at Rosebel exceeds the current mine plan of 2 million oz. of attributable gold production. These additional payments could exceed US$20 million in total if 7 million oz. of attributable gold are produced.
The Rosebel royalty entitles Guyanor to 10% of the amount by which the gold price exceeds US$300 per oz., calculated on the gold production from the soft and transitional-rock ore. From any production from hard rock, the royalty is calculated on gold prices above $350 per oz.
The government of Suriname, which mined the deposit in the early 1950s, now participates in the Rosebel project in three ways: a 2% royalty payment on gold production; a 6.5% participation in the excess gold price over US$425 per oz.; and 5% of the dividends paid by the operating company, after full repayment of the capital.
Also, the mine contributes 0.25% of gold production to a foundation to promote development of natural resources in the country.
After drifting for years, Guyanor has spent most of 2004 restructuring; the Rosebel royalty acquisition is now its only significant source of cash flow.
“This is the first step along an exciting road for a revitalized Guyanor,” says James Dunnett, Guyanor’s director general.
Guyanor is a French company that trades on the TSX and the Paris Bourse’s Nouveau March. Mostly, it holds a portfolio of gold exploration and development properties in French Guiana. Guyanor has about 45 million shares outstanding and recently traded at 25.
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