Guyana inks agreement with Reunion Gold over Oko West project

The Guyana government said on Monday that it has signed an agreement with Reunion Gold Corporation aimed at establishing stable fiscal and operating conditions for the Oko West gold project.

The key components of the minerals agreement include royalty payable to the government for gold produced from the mine, and a commitment by Reunion Gold to prioritise the employment of qualified Guyanese individuals and implement a training programme for Guyanese personnel at all operational levels to develop additional skills, the Ministry of Natural Resources said.

“This approach aims to contribute to the sustainable development of the country by nurturing local talent,” the ministry said.

“This commitment will commence upon commercial production or within 24 months from the issuance of a mining licence, whichever occurs first.”

Meanwhile, Canada-based Reunion Gold announced on Monday that it had entered into an agreement with G Mining Ventures Corporation, or GMIN for short, to combine the two companies, setting the stage for the creation of a leading intermediate gold producer.

Through the transaction, GMIN will acquire RGD’s flagship Oko West project, which is located within the Guiana Shield region.

“Oko West has emerged as a globally significant gold discovery over the last few years, with excellent potential to become a top-tier deposit that could support a large, long-life mine complex to accelerate GMIN’s vision of building a leading intermediate gold producer,” GMIN said in the statement.

The company wants to advance the Oko West project from the technical studies phase into the construction cycle in short order.

Under the terms of the agreement, GMIN and Reunion Gold shareholders will receive shares of the newly formed company (New GMIN) in the ratio of one 0.285 GMIN share for every one RGD share.

In addition, RGD shareholders will receive shares in a newly created gold explorer (SpinCo) that will hold all of RGD’s assets other than Oko West. GMIN has agreed to pump CDN$15 million into SpinCo.

The deal is valued at around CDN$875 million, excluding the value of the SpinCo consideration.

Upon completion of the transaction, existing GMIN and RGD shareholders will own approximately 57 and 43 per cent of the combined company, whereas the combined company and RGD shareholders will own 19.9 per cent and 80.1 per cent, respectively, of the outstanding shares of SpinCo.

CMC