Sandspring looking at “gold only” prospect in Guyana

Up till now, Sandspring Resources had been focused on advancing its 100% owned, 6.9-million-ounce Toroparu Gold Project in western Guyana. A feasibility ought to be delivered by December 31, 2016. Yet, plans may change.

“We are in discussions with Silver Wheaton Corporation now about a possible extension of that date to allow us to complete the current exploration drilling on what may be an additional satellite deposit that is a ‘gold only’ prospect as opposed to the main Toroparu deposit which is gold-copper. If the final results of the drilling successfully define a minable deposit, our operating plan could change to make the new deposit the ‘first pit’ and accordingly new work would be required to complete the feasibility,” Sandspring Resources CEO Rich Munson wrote in an email.

In 2015, the Canadian-listed company completed a 3,700-metre diamond drilling program on the Sona Hill Prospect, located 5 kilometres southeast of the main Toroparu deposit. The drilling intercepted high-grade mineralization in both saprolite and bedrock, which Sandspring believes could complement the existing Toroparu and Satellite deposits and improve project economics.

To further confirm the continuity of mineralization between existing drill holes, the company decided to initiate a 5,800-meter infill drilling program that can be incorporated into the mine plan for the Toroparu project. Management expects the program to be done by early December, with results available in February.

Toroparu is the fourth-largest gold deposit in South America held by a junior producer. Sandspring controls a 98,214-hectare mineral concession in the Upper Puruni Region of the Western Guiana Shield, which is also host to two multi-million ounce gold deposits that were recently advanced to production: Guyana Goldfield’s Aurora Mine and Troy Resources’ Karouni Mine.

But despite their good prospects, gold producers in the area have to deal with geopolitical hassles. Last year, for example, Canadian Goldfields received a notification from Venezuelan authorities, warning of legal action over its Aurora operations.

Venezuela has long claimed all territory to the west of the Essequibo River and its exclusive economic zone. Caracas is also opposing ExxonMobil's oil-exploration activities in the disputed waters.

But these warnings don’t seem to worry Munson. “Based on our many years of experience in Guyana and the successful construction and operation of the nearby Aurora mine by Guyana Goldfields (50 kilometres to the northeast of Toroparu), we do not see any meaningful risk. Our belief is heightened by the fact that the International Finance Corporation was the lead group in the Guyana Goldfields financing and was fully aware of the ‘claim’ by Venezuela. Additionally, we are very encouraged by the strong support by the US Ambassador to Guyana of development by Sandspring, EXXON, and others in Guyana in general and in the areas claimed by Venezuela in particular,” he said.

The Guyanese government, however, is not at ease. On September 18, Georgetown’s representative at the Summit of the Non-Aligned Movement Marilyn Cheryl Miles said that Venezuela’s claim is a threat to her country.