Guyana Goldfields: Preliminary Assessment Report Positive for Aurora Project



    TORONTO, Aug. 12 /CNW/ - Guyana Goldfields Inc. (GUY-TSX) reports the
completion of a NI43-101 Preliminary Assessment Report on the Company's 100%
owned Aurora Project, Guyana. The independent report was prepared by Snowden
Mining Industry Consultants, Brisbane, Australia and is based on an initial
resource estimate for the Project published by the Company in November, 2007.
The Preliminary Assessment indicates that the Project's economics are very
robust, with potential positive (undiscounted) cash flows varying between
$241.8 million and $897.8 million depending on various assumed cost, gold
price, resource characteristics, and plant size scenarios. (All Figures in
U.S. Dollars) The Preliminary Assessment lays out the basis for the
development of a combined open pit and underground operation at rates of
2 million and 3 million metric tonnes per annum (MMTPA) or approximately
5,500 and 8,500 tonnes per day respectively. These plants would process
approximately 200,000 to 260,000 ounces of contained gold per year over a ten
year mine life, with cash costs of $388 and $344 per ounce, respectively.
Internal rates of return for the Project vary between 37% and 71% based on
plant size, operating costs and $600 and $800 per ounce gold price
assumptions. Further optimization work will be required based upon the
changing size and nature of future reported gold resources for the Project.

    
    Project Economics

    Base Case: $600 Au, 2MMTPA, Inferred Resources Excluded from Open Pit
    -------------------------------------------------------------------------
                                     NPV
    -------------------------------------------------------------------------
    GOLD PRICE           UNDISCOUNTED            Discounted              IRR
                                                   at 10%
    -------------------------------------------------------------------------
       $600                 $241.8                 $108.3                37%
       $800                 $601.7                 $298.3                67%
    -------------------------------------------------------------------------


    Upside Case: $600 Au, 3MMTPA, Lower Operating Costs, Inferred Resources
    Included in Open Pit
    -------------------------------------------------------------------------
                                     NPV
    -------------------------------------------------------------------------
    GOLD PRICE           UNDISCOUNTED           10% discount             IRR
    -------------------------------------------------------------------------
       $600                 $435.9                 $191.3                40%
       $800                 $897.8                 $436.7                71%
    -------------------------------------------------------------------------

    The following table summarizes the parameters for the Base Case economic
assessment (which excludes inferred gold mineralization from the open pit
optimization study though includes inferred mineralization in the underground
assessment).

    -------------------------------------------------------------------------
    Item                                           Unit               Value
    -------------------------------------------------------------------------
    Gold Price                                $ per ounce             600.00
    Mining Costs - Open Pit                   $ per tonne               2.20

      - Underground (includes processing)
          Rory's Knoll/East Walcott           $ per tonne              70.00
          Aleck Hill                          $ per tonne              90.00

    Processing Costs (open pit only)          $ per tonne              10.75

    Capital Costs                             $ Millions              159.20
      - Initial Capital Costs                 $ Millions               85.00
      - Sustaining Capital                    $ Millions               74.20
    Selling Costs                             % of Revenue               5.2
    Process Recovery                          % of Au recovered         92.0
                                               by plant
    -------------------------------------------------------------------------

    The results of the Base Case $600/oz open pit optimization and underground
mining inventory assessments are summarized in the table below. All
underground inventories are reported on the basis of being after depletion by
open pit mining.

    -------------------------------------------------------------------------
                              Mining   Cut-off              Grade  Contained
            Project            Cost     Grade     Tonnes     g/t    Ounces
                                $/t     g/t Au      Mt        Au      Koz
    -------------------------------------------------------------------------
    Aleck Hill Open Pit
    Indicated Resource only     2.20      0.67      3.72      2.54       304

    Aleck Hill Underground        90      5.00      0.32      7.43        76

    Aleck Hill Total                                4.04      2.92       380

    Rory's Knoll Open Pit
    Indicated Resource only     2.20      0.67      6.08      2.80       546

    East Walcott Underground      70      4.00      0.50      5.99        96

    Rory's Knoll from base of
     $600/oz Whittle shell        70      5.00      5.33      6.08     1,042

    Rory's Knoll/East Walcott
    Total                                          11.91      4.40     1,684

    Total all Projects                            15.954      4.03     2,064
    -------------------------------------------------------------------------
    

    The tabulated mining inventories are at a scoping study level only and
are based on assumed costs and modifying factors. The inventories will change
as a result of detailed design and cost estimation work in further studies as
detailed practical mining shapes and designs have not been applied.
    The open pit inventories have been subject to validation as practical and
not warranting any further design considerations for the purpose of this
scoping study.
    The potential mining inventories assessed include consideration of the
inferred resources in the underground optimization, and are not mineral
reserves as provided for in the Canadian National Instrument (NI 43-101). It
should not be assumed that any or all of the mineral resources at Aurora will
ultimately be converted into mineral reserves.
    The study also examined the economic viability of a larger plant with a
capacity of 3 MMTPA, lower mining costs and including inferred resources in
the open pit optimization. The "upside" case uses parameters summarized below.

    
    -------------------------------------------------------------------------
    Item                                           Unit               Value
    -------------------------------------------------------------------------
    Gold Price                                $ per ounce             600.00
    Mining Costs - Open Pit                   $ per tonne               1.50

      - Underground (includes processing)
          Rory's Knoll/East Walcott           $ per tonne              50.00
          Aleck Hill                          $ per tonne              90.00

    Processing Costs (open pit only)          $ per tonne              10.75

    Capital Costs                             $ Millions              185.30
      - Initial Capital Costs                 $ Millions              108.40
      - Sustaining Capital                    $ Millions               76.90
    Selling Costs                             % of Revenue               5.2
    Process Recovery                          % of Au recovered         92.0
    -------------------------------------------------------------------------

    The results of the upside case $600/oz open pit optimization and
underground mining inventory assessments are summarized below. All underground
inventories are reported on the basis of being after depletion by open pit
mining.

    -------------------------------------------------------------------------
                                                  Tonnes           Contained
                              Mining   Cut-off   (Metric    Grade   Ounces
             Project           Cost     Grade    Millions)   g/t  (Thousands)
                                $/t     g/t Au      Mt        Au       Oz
    -------------------------------------------------------------------------
    Aleck Hill Open Pit
    Indicated Resource only     1.50      0.67      5.28      2.37       403

    Aleck Hill Underground        90      5.00      0.19      7.49        45

    Aleck Hill Total                                5.47      2.55       448

    Rory's Knoll Open Pit
    Indicated and Inferred
     Resource                   1.50      0.67      9.83      2.82       892

    East Walcott Underground      50      4.00      0.33      5.60        59

    Rory's Knoll underground
     (from base of $600/oz
     $1.50t open pit
     Whittle shell)               50      4.00      7.09      5.49     1,251

    Rory's Knoll/East Walcott
    Total                                          17.25      3.97     2,202

    Total all Projects                             22.72      3.63     2,650
    -------------------------------------------------------------------------

    The tables below summarize the two plant and cost scenarios, calculated at
both $600 and $800 per ounce Au.

    2 MMTPA Production Scenario
    -------------------------------------------------------------------------
                                         Average  Opera-  Cash         I.R.R.
                                          Mined   ting    Flow           %
                                          Grade   Cash   ($Millions)
                 Average  Opera-          (g/t    Costs
                  Annual   ting    Cut     Au)     per   ----------------
                  Produc- Costs/   Off    (open   Ounce  Undis-  NPV Dis-
    Gold   Mine    tion  Resource Grades   Pit,   inclu- counted counted
    Price  Life    (OZ/   Assump-  g/t    Under-  ding            at 10%
    $/OZ  (years) Years)   tion   Au(1)  ground) Royalty           P.a.
    -------------------------------------------------------------------------
    $600    10   206,000   BASE    0.67   2.70    387.56   241.8   108.3  37
                                   5.00
                                   4.00   6.14
                                   5.00
    -------------------------------------------------------------------------
    $800    10   206,000   BASE    0.67    2.7    387.56   601.7   298.3  67
                                   5.00
                                   4.00   6.14
                                   5.00
    -------------------------------------------------------------------------


    3 MMTPA Production Scenario
    -------------------------------------------------------------------------
                                         Average  Opera-  Cash         I.R.R.
                                          Mined   ting    Flow           %
                                          Grade   Cash   (millions $)
                 Average  Opera-          (g/t    Costs
                  Annual   ting    Cut     Au)     per   ----------------
                  Produc- Costs/   Off    (open   Ounce  Undis-  NPV Dis-
    Gold   Mine    tion  Resource Grades   Pit,   inclu- counted counted
    Price  Life    (OZ/   Assump-  g/t    Under-  ding            at 10%
    $/OZ  (years) Years)   tion   Au(1)  ground) Royalty           P.a.
    -------------------------------------------------------------------------
    $600    10   264,000   UPSIDE  0.67   2.66    343.87   435.9   191.3  40
                                   5.00
                                   4.00   5.54
                                   4.00
    -------------------------------------------------------------------------
    $800    10   264,000   UPSIDE  0.67   2.66    343.87   897.8   436.7  71
                                   5.00
                                   4.00   5.54
                                   4.00
    -------------------------------------------------------------------------
    (1) Cut off grades for open pits and underground at Aleck Hill, East
        Walcott and Rory's Knoll respectively.
    

    "It can be concluded that there is good potential for a materially
profitable and robust Project to be established at Aurora. An open pit
operation is potentially viable in its own right, and the potential to add
value by exploring the deeper resources by underground methods is
considerable." (Snowden Report)
    The Company is currently conducting advanced stage studies on the site
selection and feasibility of the construction of a hydroelectric facility for
the Project. Preliminary capital costs for the Project are not yet available
but initial indications suggest this facility may lower operating costs
significantly and thus further enhance the economics of the Aurora Project.
The bankable feasibility study for the Project, expected to be initiated
during the third quarter of this year, will encompass the hydroelectric option
for the Project.
    An updated resource estimate for the Project is currently being
calculated which will include an additional 162 drill holes totaling
43,000 meters. An updated scoping study will assess the economics of any
additional resources as a result of this work, while further exploration and
geotechnical work continues on the Project.
    "The report is a "preliminary assessment" (NI-43-101) and is not intended
to satisfy the requirements of a "preliminary feasibility study" or
"feasibility study" (CIM 2005). Therefore the mining inventories reported in
this assessment are not Mineral Reserves, and there is no certainty that all
or part of the reported mining inventories will eventually be converted to
Mineral Reserves." (Snowden Report)
    President and CEO Patrick Sheridan states "we are extremely encouraged by
the initial findings of the assessment. The Aurora Project, with high grade
open pits and a robust underground mining scenario, has the potential to be a
world class mine with quick payback of initial capital and high profit
margins. We will move aggressively to move the Project to bankable feasibility
after the updated resource and scoping studies are made public. In the
meantime exploration work continues on both the Aurora and Aranka areas."
    Peter Myers B.E.(HONS) (Mining), MAusIMM Divisional Manager Snowden
Mining Industry Consultants is the qualified person responsible for
supervising the preparation of the preliminary assessment including the cost
estimates and financial analysis.
    Mr. D. K. Mukhopadhyay, MAusIMM, Senior Mineral Resource Geologist of
Micon International Co Limited, is the qualified person responsible for the
preparation of the mineral resource estimates as previously filed on Sedar on
November 23, 2007.

    About Guyana Goldfields:

    Guyana Goldfields Inc is a Canadian based mineral exploration Company
primarily focused on the exploration and development of gold deposits in the
Guiana Shield of South America. The Guiana Shield is in the northern part of
the Amazon Craton and covers parts of Guyana, Venezuela, Suriname, French
Guyana, and northern Brazil.
    Alexander Po P.Geo is the qualified person for reviewing and approving
this press release.
    The Company holds advanced exploration Projects in various stages of
development and has been operating in Guyana continuously since 1996.
    The Company currently has approximately (CDN) $17 million in cash and no
debt.

    %SEDAR: 00004193E




For further information:

For further information: Information is available on the Company's
website at www.guygold.com and on www.sedar.com and through the Company's
offices at: John Patrick Sheridan, President/CEO, Suite 1205-141 Adelaide St.
W., Toronto, ON, Canada, M5H 3L5, Phone: (416) 628-5936, Fax: (416) 628-5935
info@guygold.com; Peter Myers, Divisional Manager, Snowden, T 07 3231 3804, F
07 3211 9815, M 0403 888 384, Level 15, 300 Adelaide Street, Brisbane, QLD
4000, Australia


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