Hiring heavy hitter, takeover speculation fail to boost Guyana Goldfields
The hiring of a heavy hitter and rumours of being a possible takeover target could not lift Guyana Goldfields (TSX: GUY) out of a 5.5% slump on Monday.
At the close the miner was trading down 5.56% at $2.72 on the Toronto big board, near its lows for the day. The mining sector was generally weak with the TSX S&P Global Mining index shedding 2.65% on the day.
Guyana Goldfields is now worth $228 million on the TSX and is showing massive losses for 2012 – its value has dropped more than 60% year to date on the back of a disappointing feasibility study for its Aurora gold project in the tiny South American country.
The company, active in Guyana since 1996, said on Monday it has hired St. John Lees, former area manager infrastructure for Rio Tinto's massive Simandou iron ore project in Guinea West Africa, as vice president for projects.
Rumours that it may be a possible Iamgold takeover target also failed to fire up the stock.
Northern Miner (sub required) reported on Monday the cash-rich gold miner said it is looking to spend "$400-$500 million on an acquisition in the Americas over the coming months:"
And in South America, Iamgold “could potentially joint venture or acquire Newmont’s Saramacca project” near Iamgold’s Rosebel mine in Suriname, or perhaps Guyana Goldfields (GUY-T) “whose stock has been under major pressure since the release of its feasibility study for its Aurora project.”
After raising $25 million and revising the initial study earlier this month, the stock showed healthy gains, but those have since evaporated. The original plan had estimated initial capital costs for Aurora of $525 million with production kicking off late 2014.
Aurora has a current measured and indicated resource of 5.71 million ounces gold (47.040 million tonnes at a grade of 3.83 g/t).
Guyana Goldfields was granted a licence in November. It’s the South American nation’s only large-scale licensed gold mine development project.