With production halted, Troy Resources places mine into care and maintenance phase

With no production in process, Australian gold mining company Troy Resources’ operations here have been placed into a care and maintenance phase.

A source familiar with the company’s affairs told Sunday Stabroek that the gold producer has laid off a percentage of its mines staff. A skeleton staff system remains to engage in care and maintenance work.

Company Secretary Rebecca Broughton, in a notice to shareholders, announced that the company has requested a further suspension of trading on the Australian Stock Exchange. She explained that the voluntary request is necessary for the completion of a recapitalisation of the company.

“Troy anticipates that the voluntary suspension will be lifted on the earlier of the commencement of normal trading on 14 April 2022 or when its full form prospectus is released,” she stated in a correspondence to shareholders that was seen by

Stabroek News.

In May of this year, the company announced that gold ore at its mining site has been plummeting and had projected that processing activities could cease in August or September.

Troy informed shareholders that they are likely to see minimal fluctuation in production for May and June and with the pits likely to be exhausted the company said they will enter into care and maintenance between August and September.

Over the month of April, the company reported that gold production totaled 2,140 ounces, with forecasting figures being pegged at 2,400 and 1,909 ounces for May and June respectively.

The gold mining company made the disclosure in their monthly update to shareholders on the Karouni Gold Project.

Troy in the update related that their two pits Hicks 4 and Spearpoint, which have been supplying ore to the mill would have been exhausted by mid-June/ early July of this year.

The company was also mulling the startup of underground mining by October but this was not done. The company had cited inclement weather as the cause for having these plans pushed further back.

The death of the company’s director Ken Nilsson, who had passed away in September, had also put a damper on the company’s plans.

In May, Nilsson had assured that the company would not be shutting down operations here.

“The initial work which was planned to start around the 1st of July now seems more likely to take place in October. We anticipate that all preparatory technical work on the underground operations will be completed by mid to late June,” Nilsson said in a statement clarifying the status of his company’s operation.

The statement had been prompted by a report in Stabroek News which said that with gold ore plummeting in two key pits, Troy Resources had announced that processing activities could cease in August or September at its Region Seven site until the delayed underground mine project gets underway.

Troy had been aiming for a seamless transition from its open-mine operations to underground mining but with the COVID-19 pandemic, it was forced to push back timelines and work plans.

The company had already received the necessary permits to commence infrastructure works and was working closely with the Guyana Geology and Mines Commission and other government departments to assist in the formulation of a set of mining regulations for underground mining operations in Guyana.

“The current preferred mine plan involves bulk mining of the deposit to maximize gold production. A two-stage development approach is currently preferred to minimise capital expenditure requirements. This will see initial development of a relatively short drive of approximately 800 metres to the first ore zone of approximately 30,000 ounces, revenue from the sale of which will be used to fund further development,” the company had disclosed.

In October 2020, Troy announced that it had ‘struck gold’ with a bonanza discovery of a vein at its Smarts underground mining project at its Karouni mining site in Region Seven showing 131.93 grams of gold per tonne of ore (g/t Au).

However, the company encountered a series of setbacks in recent years and closed its operations in October 2019 after an employee died at its Karouni mine site. Operations restarted in January 2020 and were then affected by the COVID-19 pandemic. There were also financial difficulties which saw it entering into a gold loan facility of 5,200 ounces with Asian Investment Management Services Ltd (AIMS), a Malaysian-based investment fund (facility).

In February this year, Troy produced 2,653 ounces of gold, up from 2,113 ounces in January, putting production for the first two months of 2021 at 4,766 ounces in comparison to 4,195 ounces for the last quarter of 2020.

By contrast and prior to encountering major difficulties, Troy produced 58,118 ounces of gold in 2018 and 70,207 ounces in 2017.