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Jagdeo said the old Omai has not returned to Guyana, despite the company president saying “we are back”
Vice President, Dr. Bharat Jagdeo
Kaieteur News – Vice President Barratt defended the government’s decision to allow Omai Gold Mining to return to Guyana, saying the company is not the same company now. However, Omai Gold Mining President and CEO Elaine Ellingham said it is still the same company.
On August 19, 1995, a man-made environmental disaster occurred in Guyana’s Omai River when the wall of an earthen tailings pond used to store cyanide for the gold mining industry ruptured. More than 400 million gallons of cyanide-containing material leaked into the Omai River and subsequently into the Essequibo River, the country’s largest river.
The spill had severe environmental, ecological, social, economic and political consequences for Guyanese society. Local and international media, government, politicians and environmental groups were actively involved in the incident. Due to strong protests from the local population and international outrage, gold mining activities in the area were forced to be suspended for several months. During the crisis, former President Cheddi Jagan declared a 50-mile contaminated stretch of the Essequibo River an environmental disaster area. Although cyanide concentrations of 2 parts per million (ppm) are lethal, the concentration of mining waste along the Omai River reached 28 ppm during the disaster. A government-mandated commission of inquiry investigated the incident and made recommendations. Despite this, by March of the following year, gold mining activities at the spill site were fully resumed. The mining company finally closed its operations in 2005, and its assets were transferred from Cambior Resources to IAMGOLD and later to Mahdia Gold Company (MGC).
Elaine Ellingham, president and CEO of Omai Gold Mines.
Starting in 1993, when the company began actual gold mining, it mined about 3.7 million ounces of gold during its 24 years of operation, but only paid Guyana 5% of that in royalties. If the terms of their lucrative gold mining contracts had worked out to Guyana’s benefit, the country would have received billions of dollars in benefits. On top of that, the company has also benefited from a host of tax, fuel and vehicle concessions – totaling millions of Guyanese dollars.
This wasn’t the only sweet deal Omai Gold Mines got – there was a clause in their contract that protected it from any future laws. In other words, not even Parliament could reduce the benefits Omai was due under the agreement. However, due to a sharp drop in the price of gold in 2005, Omai decided it was time to close its doors. The company had to hang on for another three years to meet its obligations, as these were related to ensuring the mine was environmentally safe given the extensive use of cyanide.
Jagdeo’s response
In light of the above, Jagdeo was asked at a press conference on Thursday why his government accepted the company that caused such a major disaster here and what steps were taken to reconcile the relationship between Omai and Guyana. In response, Jagdeo said: “Well, these are two different companies; now they are two different companies. So, they are not coming back; Omai is not coming back. It is a different company, different ownership, very different ownership.”
They remember that Omai was here
However, in a March interview live on Crux Investor’s YouTube channel, Ellingham highlighted a meeting with President Irfaan Ali, highlighting the government’s enthusiastic support for the mining initiative. “He (President Ali) has a lot on his plate, as you can imagine with Guyana’s offshore oil business attracting so much foreign interest and foreign investment,” Ellingham said. However, Omai’s CEO said Guyana’s head of state still found time to learn about the company’s progress. “But you know, they take mining very seriously, and they remember when Omai was in production… so Omai has a special place in their hearts,” Ellingham said. “They always want to know how Omai is doing and how soon it can be in production, so we need to keep moving forward,” she added. She added that the Ministry of Natural Resources and the Guyana Geology and Mines Commission (GGMC) are equally eager to see Omai back in production as soon as possible. Ellingham stressed Guyana’s unique position among global jurisdictions and noted that the government has played an active role in promoting mining activities. She commented: “There are very few jurisdictions in the world where you know that your government is rooting for you and wants you to improve.”
Omai returns to Guyana
Furthermore, despite Jagdeo’s denial of the company’s return, Natural Resources Minister Vickram Bharrat revealed in October 2020 that Omai Gold Mines Limited (OGML) had expressed its intention to return to Guyana. Furthermore, Minister Bharrat also stated that OGML intends to withdraw from its old site in Region Seven (Cuyuni-Mazaruni).
Many government officials have and continue to welcome the return of OGML. Kaieteur News The people of Guyana are reminded that for more than two decades, Omai Gold Mines exploited Guyana and its resources and caused severe environmental damage. Despite this, Minister Barratt insisted in 2020 that OGML will pass all necessary regulations to ensure that Guyana does not suffer loss again.
This year, the Canadian company announced significant progress at its project in Area 7 (Cuyuni-Mazaruni). Omai holds a 100% interest in the gold project, which consists of two gold deposits: the shear-type Wenot deposit and the adjacent intrusive Gilt Creek deposit.
On February 8, 2024, the Company announced an updated Mineral Resource Estimate (MRE) for the Omai property. The combined estimate for the Wenot and Gilt Creek deposits is 2.0 million ounces of gold at 2.15 g/t in the Indicated category and 2.3 million ounces of gold at 2.26 g/t in the Inferred category. This is a significant increase from the previous resource estimate in October 2022, with an increase of 4% in Indicated ounces and a substantial increase of 28% in Inferred ounces.
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