Above: from left, PM Samuel Hinds, President Bharrat Jagdeo (background) and Sandspring Chairman John Adams (Photo: GINA)

By the Caribbean Journal staff

The Guyanese government signed a partnership agreement yesterday with Canadian mining company Sandspring Resources and its affiliate ETK, Inc., on a large scale mining operation that could yield 250,000 to 300,000 ounces of gold per year.

Guyanese Prime Minister Samuel Hinds, Sandspring Chairman John Adams and Guyana Geology and Mines Commission Chairman Joe Singh signed the agreement.

The deal involves a feasibility study and construction of the Toroparu mines between the Cuyuni and Mazaruni rivers, with the potential to contribute $550 million to Guyana’s GDP.

The Toroparu mines will cost about $700 million to construct; they could also produce approximately 20 million pounds of copper.

The agreement requires Sandspring to comply with US and Canadian environmental standers, and to pay a royalty of eight percent to the government in the event that gold prices rise above $1,000 per ounce.

“The project is good for Guyana,” Adams said. Sandspring believes that this is a fair agreement for both sides that can serve as a model for future mineral agreements.”

In 2010, the mining sector contributed nine percent of the country’s GDP, and 50 percent of export earnings.

Last month, the President of the Guyana Chamber of Commerce, Komal Ramnauth, told Caribbean Journal about the significant interest in the country’s rapidly-growing gold sector.