Big resource developments from a tiny and unexpected nation this week. Where both the mining and energy sectors are, incredibly, taking off at the same time.
That’s Guyana — a roughly Florida-sized country sandwiched between Venezuela and Suriname on the Caribbean coast of South America (see map below). Where the government announced this week that the gold mining sector just hit an all-time record for production.
Guyana is a relatively small nation located on the northern coast of South America
Warren Buffett: If You Own A Good Business, Keep It
Guyana’s Minister of Natural Resources Raphael Trotman told a press gathering over the weekend that national gold production came in at 690,000 ounces during 2016. Marking the highest level of output the nation has ever seen.
A full 70% of this production came from two large-scale operations — the Karouni mine commissioned by Australia’s Troy Resources in early 2016, as well as the Aurora operation run by Canada’s Guyana Goldfields. Notably however, 30% of the output came from small- and medium-scale operations — showing there is considerable potential across Guyana.
Minister Trotman said the government expects production to rise above 700,000 ounces in 2017. And news this week suggests the coming year could see big developments for Guyana in another commodity: oil.
Trotman also told reporters this weekend that the government has given the go-ahead for a $500 million oil and gas services center — to be built on the coast about 100 kilometers southeast of Guyana’s capital city, Georgetown.
That’s coming on the back of ExxonMobil’s announcement this past July that it has found up to 1.4 billion barrels of oil equivalent in the Guyana offshore. Which has put this tiny nation clearly in the sights of a major buildout for petroleum development.
The minister noted that the new oil and gas services center will provide heliports, supplies, maintenance and transportation to support offshore development. The majority of funding will come from the private sector — with a “significant number of both local and international interested parties” having expressed commitments over the last few months.
Construction is supposed to begin this year, meaning that 2017 could see a flurry of activity for the Guyana resources sector. Watch to see if this big infrastructure build opens up even more opportunities — in gold, oil, and beyond — within this up-and-coming destination.