Guyana Goldfields reports Robust Projected Economics from Preliminary Assessment for the Aurora Gold Project

    TORONTO, Aug. 24 /CNW/ - Guyana Goldfields Inc. (TSX: GUY) ("Guyana" or
the "Company") is pleased to announce the on-schedule completion of a positive
NI43-101 compliant Preliminary Assessment ("PA") for the Aurora Gold Project
by AMEC of Oakville, Ontario. An interim summary called "Summary of PA Key
Findings" is posted on the Company's website at The final PA
NI43-101 Technical Report will be submitted within the required 45-day period
and made available on Sedar and the Company website.
    The PA is the first phase of a two-phase Definitive Feasibility Study.
Phase 2 will take place from August 2009 to March 2010 and conclude with the
submission of the Definitive Feasibility Study.

      -  The proposed mine plan calls for the production of more than 4
         million ounces of gold
      -  Guyana's project economics at today's gold price of US$ 950 per oz
         show a pre-tax IRR of 27%, NPV of US$ 678 million at a discount rate
         of 7% per year, and a payback of 3.9 years with a pre-tax cash flow
         of US$ 1.64 billion (AMEC's base case results are shown below under
         the heading "Economics").
      -  An engineering solution which addresses potential flooding has been
         designed and consists of an embankment along the river

    Key Findings of the PA

    Geology & Resource Estimate
      -  A resource estimate was completed using revised cut-off grades in
         both the open pit and the underground mine, 0.85 grams per tonne
         (g/T) and 2.0 g/T respectively; the indicated resource is
         24.1 million tonnes at 4.1 g/T for 3.2 million ounces and the
         inferred resource is 12.9 million tonnes at 3.3 g/T for 1.4 million

      -  The proposed design is based on a combination of surface and
         underground mining; the mine would start as an open pit and the
         conceptual design of a single pit is progressing; underground mining
         would follow with access through both ramps and a main shaft;
         preferred mining methods have been selected
      -  The open pit tonnage in the proposed mine plan is 17.9 million
         tonnes at an average grade of 2.8 g/T, while the underground tonnage
         is 18.1 million tonnes at an average grade of 4.5 g/T

      -  The mineralized material is mainly non-refractory sulphides (hard
         rock) with a small portion of oxides (saprolite) near surface
         calling for conventional gold milling with recoveries above 95%
      -  A process flow which incorporates a Semi-Autogenous Grinding (SAG)
         and ball mill combination as well as gravity and Carbon In Pulp
         (CIP) circuits has been designed and key equipment has been
      -  Average throughput (for the first 9 years) - 8,000 tonnes per day
      -  Total gold produced - 4.0 million ounces
      -  Average annual gold production - 250,000 ounces (based on 16 full
         years of production)

    Water Management
      -  River embankment - the design and engineering of an embankment
         (river dyke) is well advanced; this dyke is designed to protect a
         small area of the northern portion of the site from potential
         flooding during exceptional events
      -  Surface water - an extensive surface water management system,
         including drainage, ponds and diversion ditches, is being designed
         and engineered to manage and control surface water in a tropical

    Logistics & Infrastructure
      -  On-site infrastructure - conceptual design is advanced; this
         includes a main gate, new airstrip, roads and accommodations

      -  Development & Construction - 2 years (2010-2012)
      -  First year of open pit production - 2012
      -  Open pit life - 9 years (2012-2020)
      -  First year of underground production - 2015
      -  Underground life - 14 years (2015-2028)
      -  Total mine life - 17 years (2012-2028) - 16 full years of production

      -  Capital expenditures
         -  Pre-production development (surface & open pit) - US$ 262M
         -  Surface equipment - US$ 21M
         -  Underground development - US$ 147M
         -  U/G equipment - US$ 10M
         -  Sustaining (includes closure) - US$ 80M

      -  Operating Cash Costs of US$ 364 per oz
         -  AMEC's base case project economics, at a gold price of US$ 750
            per oz, show a pre-tax IRR of 16.3%, NPV of US$ 236 million at a
            discount rate of 8% per year, and a payback of 6.0 years with a
            pre-tax undiscounted cash flow of US$ 878 million

    Guyana is also providing the following update:

    Off-site Infrastructure
      -  Port and Road - design includes a small port facility and an access
         road extension; wharf and pier design as well as a secured lay-down
         area for the port is complete; options on the 40-km extension of the
         existing road are under study
      -  Hydropower dam - site topographical survey is in progress

    Environmental & Social Impact Assessment ("ESIA") and Permitting
      -  Studies related to the ESIA are largely complete
      -  Permitting process is proceeding well; a Preliminary Environmental
         Impact Assessment was submitted to the Guyanese Environmental
         Protection Agency in June 2009

    Guyana's internal financial model, based on the PA, establishes the
following economics (all in US$):

     Gold Price     NPV @ 7%     Cash Flow       IRR     Payback (years)
       $ 800          $ 383M        $ 1,069M        19%           5.3
      $ 1,000         $ 777M        $ 1,832M        30%           3.6
      $ 1,200        $ 1,171M       $ 2,595M        39%           2.8

    Claude F. Lemasson, the President and Chief Operating Officer (COO) of
Guyana, states "The on-schedule completion of this major milestone with a
positive PA further demonstrates the robustness of the Aurora Gold Project. It
confirms the high-grade nature of the open pit and a gold production target
above 4 million ounces in a mining-friendly jurisdiction. In addition, there
is significant potential in increasing the resource base over the near term.
This sets a clear and solid framework around the highly profitable world-class
gold mine that we plan on building at Aurora."
    The critical advancement of the Aurora project during this
pre-development phase will continue with extensive drilling in the next 7
months, completion of the ESIA in Q4 2009, completion of the Hydropower
Feasibility Study in Q1 2010, the issue of the Permit to build and operate the
mine, as well as the completion of the Definitive Feasibility Study by AMEC in
Q1 2010.
    The Aurora Gold Project, located in north central Guyana in South
America, is a multi-million ounce gold discovery being advanced through key
studies leading to the start of construction in 2010.
    AMEC employees Richard Kilpatrick P.Geo (Geology), Jeff Smith P.Geo.
(Resources), Benny Zhang P.Eng. (Mining), Lionel Magumbe P.Eng (Process), and
Xiaogang Hu P.Eng. (Geotechnical and Water Management) are the AMEC "Qualified
Persons" for the Purposes of National Instrument 43-101, Standards of
Disclosure for Mineral Projects of the Canadian Securities Administrators,
executing the PA NI43-101 Technical Report and confirm that they have reviewed
the information contained within this release.
    Mineral resources that are not mineral reserves do not have demonstrated
economic viability (NI43-101/3.4(e)). The preliminary assessment includes
inferred mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
preliminary assessment will be realized (NI43-101/2.3(3bi)).
    AMEC is an international project management and services company with
Canadian operational headquarters in Oakville, Ontario. AMEC's Mining & Metals
unit provides a full range of services to the mining industry, including
strategic planning and market assessments, resource and reserve estimation and
auditing, mine planning and design, feasibility studies, process development,
environmental services, simulations, geotechnical, engineering design,
procurement, project and construction management, plant start-up and
commissioning, operator training and mine support services.
    Claude F. Lemasson, P.Eng., MBA, President & Chief Operating Officer of
Guyana Goldfields Inc., is a professional engineer with 20 years of experience
in mining construction and operations. Prior to joining Guyana, he was
Goldcorp's General Manager of Projects for Canada and U.S. and the Mine
General Manager of the Red Lake mine from 2000 to 2006. He is also a graduate
of the prestigious Kellogg-Schulich Executive MBA program, where he gained
international perspectives on global strategic management and decision-making.

    About Guyana Goldfields Inc.

    Guyana Goldfields Inc. is a Canadian based mineral exploration company
primarily focused on the exploration and development of gold deposits in
Guyana, South America where the Company has operated since 1996. The Company
is currently undertaking technical studies to advance and develop the Aurora
Project in Guyana. As at the date hereof, the Company has approximately $26
million in cash and short-term bank guaranteed investment certificates and no

    %SEDAR: 00022477E

For further information:

For further information: Mr. Claude F. Lemasson, President & COO or Ms.
Jacqueline Wagenaar, Director of Investor Relations, Guyana Goldfields Inc.,
Suite 1205-141 Adelaide Street West, Toronto, Ontario, Canada M5H 3L5, Tel:
(416) 628-5936, Fax: (416) 628-5935,,

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