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This Environmental Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Environmental Review Summary
Project number 24619
Project nameGuyana Goldfields Inc
CountryGuyana
SectorGold
DepartmentGbl Infrastructure & Natural Resources
Company nameGuyana Goldfields Inc
Environmental categoryB
Date ERS disclosedJanuary 4, 2006
StatusActive
Previous EventsInvested: March 8, 2006
Signed: March 3, 2006
Approved: March 1, 2006

Project description
Guyana Goldfields (or the company) is a publicly listed junior mining company whose objective is exploration and development of properties for the mining of precious and base metals in Guyana. It holds 100% of the mineral exploration rights to the Peter’s (8,358 acres) and Aurora (14,000 acres) properties in Guyana. It acquired prospecting licenses for these properties from 1996-1998.

The company has been active in Guyana for about ten years, and it commenced a 10,000 meter drilling in early 2004. In June 2004 it discovered a very highly mineralized deposit at Rory’s Knoll, part of the Aurora Complex of deposits. The company now has three drill rigs operating continuously. It is starting to model the resource and expects to have a prefeasibility-quality resource by the end of 2006. Mine development is not expected to start for another 24 months as the Bankable Feasibility Study (BFS) progresses. The company has identified gold resources in the Peters concession but at this time it is focusing efforts on Aurora.

Guyana Goldfields is committed to IFC objectives on environmental, social, and governance issues and will comply with IFC Policies & guidelines. It values the resources and expertise IFC brings to help it develop. The company has committed to these objectives in a Corporate Policy Document.

Deposits:

The Aurora property is located on the Cuyuni River, 175 km of Georgetown. The Company has built a camp at Aurora that currently has 40 full-time workers focused on exploration and drilling activity. There is a medic on sight that treats workers and occasional drop-in patients (free of charge). The largest and best-defined deposits are in an area called the Golden Mile, which is approximately one square mile in area. Drilling commenced at the Rory’s Knoll deposit in June 2004, and the first hole was a big success – 5.82 gpt Au at 47m. This was followed by other successful hits: 4.06 gpt Au at 74m, 2.87 gpt Au at 171m, and 5.62 gpt Au at 106m. There are several defined deposits in the Golden Mile, and current indications suggest an open pit mine of about 2 million oz. at 2.5 gpt.

Environmental Category B disclosure requirements
IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors.

The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

To view the Summary of Project Information(SPI) for this project, click here


Environmental and social issues
This is a category B project as IFC will be funding exploration leading to the preparation of a Bankable Feasibility Study at the Aurora site. In any future mine development (for which IFC would require a full ESIA) there is a strong case for a continuing IFC role where we can influence and direct the positive benefits. This would be appraised as a new project, with full ESIA and with a new environmental classification appropriate to its risks and impacts. Additional exploration work may take place at the Peters site, although Peters mine development is unlikely before Aurora.

The exploration concession areas lie within tropical moist forest. The concession is sparsely populated with the nearest known settlement some 53 km upstream of the main exploration area at Aurora. Although the concession is not close to any designated Amerindian areas the company recognizes that it will interact with Amerindians and has already consulted with Amerindian organizations and will continue to work with them on development issues of mutual interest. There are no artisanal miners in the Aurora area but some are present near the Peters property. Thus, for the initial exploration project, the potential environmental issues would be limited and associated with bio-diversity, drilling sites, water resources, soils, solid and liquid waste management, vehicle impacts, handling, use and storage of hazardous materials and reclamation of exploration areas. Social issues include minimization of induced development and influx management. These impacts can be minimized and mitigated with careful management.

Although there are no settlements close to Aurora, the Cuyuni River serves as a transportation corridor, with several small boats per week passing by the camp. Occasional visitors to the Aurora Camp include Amerindians from the village about 53km upstream from the camp, usually seeking medical attention. The camp medic attends to them where possible, triaging the patients and sending them to a major town by a Guyana Goldfields boat for treatment at a government hospital five hours downriver. Six or seven ‘drop-in’ patients are treated per month, with most being released from site to return home, and with only rare cases being sent to the Government Hospital.

Proposed mitigation for environmental and social issues
Management of the key bio-diversity issue will be initially through rapid-biodiversity assessments of the areas in which the company is working. The company has agreed to investigate the potential for partnerships in field of bio-diversity management (Conservation International and WWF are both active in Guyana).

The company has agreed in principle to develop a Health, Safety, Environment and Community Policy (HSEC) with commitments on how it intends to operate going forward. It will comply with Government of Guyana requirements, applicable international treaties and World Bank/IFC Policies & Guidelines. It has recently contracted an E&S consultancy to develop the documentation and interact with communities. The company will prepare Guidelines (in line with its stated Policy) for use by its staff and contractors covering HSEC management of exploration work.

The project has the support of the Government of Guyana which views the project as a key element in its strategy to rejuvenate the mining industry.

IFC will require the company to prepare a Public Consultation Disclosure Plan (PCDP) to ensure proper stakeholder relationships, monitor community support and identify needs and priorities for sustainable development.

Any future mining development would be subject to an appropriately detailed ESIA at the time of preparation of BFS.

Conclusion
Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures.

Monitoring and compliance
IFC will evaluate the project’s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual reports (format to be decided) prepared for the project covering:

- the status of implementation of any agreed measures and
- ongoing performance of project-specific environmental, health and safety and social activities.

Periodic site supervision visits will also be conducted.

Environmental and Social Documentation
This ERS contains the full environmental and social documentation prepared for the project.

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