Cambior teams up with Golden Star on Guyana project

Edmonton-based Golden Star Resources (ASE) has recently gained Cambior (TSE) as its new joint venture partner on the Omai gold project in Guyana, South America. Golden Star’s previous partner had been Placer Dome (TSE), but the senior company withdrew from the project earlier this year. Val d’Or-based Cambior has acquired an option to earn a 60% stake in Golden Star’s Omai bet by funding a final feasibility study and arranging project financing if a future production decision is made.

Based on previous exploration work completed by Placer Dome, preliminary reserves for Omai were estimated at about 53 million tonnes grading 1.39 grams of gold per tonne (58.4 million tons at 0.039 oz. gold per ton).

Those reserves include some 10 million tonnes of alluvial and saprolite material along with another 43 million tonnes of primary bedrock mineralization. The main deposit is associated with a highly altered diorite stock in a Precambrian greenstone environment.

Guyana’s gold output is currently just under one tonne annually, but is expected to increase following the government’s relaxation of restrictions on private investment since 1987. The government has also been trying to attract overseas investors, hoping to raise gold output to a target of six tonnes annually.

The recent option deal also gives Cambior secondary options to acquire a further 10% interest in the Omai project, subject to approval of the government of Guyana and regulatory approval. Golden Star will retain a 35% interest in the project, or 25% if the secondary options are exercised by Cambior.

Golden Star will also be entitled to recover its prior costs at a rate of 10% of net cash flow from the operation during the period when project financing is being retired.

“We are very pleased to be joined by Cambior in the preparation of the final feasibility study at Omai, and hopefully to bring it to the production stage,” said David Fennell, president of Golden Star.

According to Cambior’s President Louis Gignac, the new Omai option agreement offers Cambior the opportunity to expand internationally — a trend being witnessed among an increasing number of Canadian mining companies these days.

If successfully placed into production, the project would add significantly to Cambior’s current annual gold output of 220,000 oz.

In a separate deal, involving another project outside North America, Cambior has been negotiating to acquire a 50% interest in a gold property on the Island of Kalimantan in Indonesia.

As part of the company’s overall corporate strategy, Cambior plans this year to increase its total surface exploration budget to $9.5 million, which will be distributed among projects in Canada, the U.S. and high-potential regions outside North America.