Canadian intermediate gold producer Guyana Goldfields does not have sufficient working capital and cash flow to cover its operating requirements this year, the TSX-listed company announced on Tuesday.
The miner, which operates the Aurora gold mine in Guyana, said that it was “actively exploring” alternatives to provide additional balance sheet flexibility. At the same time, it has also started a review of strategic alternatives.
Guyana Goldfields previously anticipated generating sufficient working capital and cash flow to cover operating requirements, but said that it was now clear that this objective was no longer achievable. It would need additional financing for the cost of waste stripping for the openpit and the development of the underground mine.
President and CEO Alan Pangbourne said that while it continued to transition to underground mining, additional financing would cover a shortfall in cash flow from openpit gold production.
Further, Guyana Goldfields said that waste stripping would be suspended to allow ore production from the bottom of the current pit. Going forward, the company expects that ore production from the openpit would be interrupted for between four six months, starting in the second quarter of 2020 and resuming at the end of the third quarter of 2020.
"Gold output has been, and will continue to be, affected by an inability to achieve the aggressive waste stripping rates originally proposed in early 2019 as a result of very narrow pushbacks constraining and leading to small, congested mining areas," said Pangbourne.
Gold production at Aurora totalled 28 300 oz in the fourth quarter of 2019, up 28% from 22 100 oz in the third quarter of 2019, but down 28% from 39 100 oz in the fourth quarter of 2018. For the full year 2019, gold production totalled 124 200 oz, down 17% from 150 400 oz/y earlier.