On April 30, 2024, the University of Guyana facilitated a guest lecture on “fake news and hate speech” in Guyana and how to curb same. It would be interesting to learn what were some of the proposals emanating from that lecture to curb the increasingly growing degree of fake news in Guyana, which are presented to the Guyanese readers in various forms. With this in mind, I would like to address two (2) instances of inaccurate reporting hereunder, which has become the norm by the Kaieteur News (KN) publication:
Firstly, in their May 1, 2024, edition of the Kaieteur News, an article was published with the caption “Guyanese in the dark over true cost of power ship”. This was a dangerously false story on this matter by this publication. Perhaps a more accurate caption would be “Kaieteur News in the dark over true cost of power ship due to their own mathematical incompetence”. The very article reported the terms of the agreement, which was publicly reported in a statement by the Guyana Power and Light Inc. (GPL). Pursuant to that agreement, “the contract requires GPL to pay UCI a fee of US$0.0662 per Kwh as a monthly charter fee for the power ship and a monthly operation and maintenance fee of US$0.0098 per Kwh”. The Guyanese public is also well aware, as per GPL’s public statement in addition to the Vice President, Dr. Bharrat Jagdeo’s confirmation at his weekly press conferences, that the contract is for a period of two (2) years to supply 36 MW of power. (These details were reported in the Kaieteur News article on several occasions). However, it was their calculation that was wholly incorrect. As such, for KN’s reference, please see below the correct calculations with explanations.
The total cost is the charter fee of US$0.0662 + the operation and maintenance fee of US$0.0098 = US$0.076 cents. (Note: KN’s calculation was incorrect because of their incorrect expression of the US cents…where US$6.662 cents have to be expressed as US$0.0662 and US$0.98 cents expressed as US$0.0098). Next, calculate the total annual consumption based on the 36 MW converted into Kwh: where 36 MW = 36,000 Kw. So, the annual consumption = 36,000 kwh X 24 hrs. X 365 days = 315,360,000 kwh of electricity or 315,360 MWh of electricity. Hence, the annual cost would be 315,360,000 kwh X US$0.076 = US$23,967,360. Therefore, for the two years period, the total cost as per the contract would be US$23.967 million x 2 years = US$47.934 million or GY$9.994 billion.
Secondly, in their April 25, 2024, edition of the Kaieteur News, an article was published with the caption “Canadian company handed massive gold field in Guyana, sells 57% of its shares for US$638M days after inking agreement with Gov’t”. The article goes onto state that GMIN acquired 57% of Reunion’s Gold Oko West Project. The report was framed in a manner, that gives its readers the impression that it is the Guyana subsidiary of Reunion Gold Corporation that was sold as well as the sale of the concession. However, having reviewed the actual press release by Reunion Gold in relation to the said transaction, the KN article completely misrepresented the facts and the details on the said deal. (See full press statement here by Reunion Gold: https://www.reuniongold.com/240422-pr).
It should be noted that third party transfers of the mining licenses are permissible in accordance with the Mineral Agreement, subject to the approval of the relevant authorities. But this is not the case in relation to the Reunion Gold and GMIN merger.
According to the release by Reunion Gold and further examination of the details by this author, it is not an exclusive acquisition of the Guyana subsidiary, it is in fact an M&A transaction involving the parent companies between the two companies, which is a much more complex deal in contrast to the report carried by KN. Following the completion of the deal, two subsidiary companies will be formed of which GMIN, and Reunion Gold will own 57% and 43% of the combined company.
Furthermore, upon the perusal of the 2023 annual report for Reunion Gold Corporation, the total assets of the company stood at CAD$76 million, and a cumulative deficit position of CAD$260 million. A comprehensive loss of CAD$59.2 million was reported for the year 2023. This explains the reason for the merger with GMIN as the company Reunion Gold has not had much profitable ventures for a long time. It is this outcome that necessitated the merger as part of both firms’ future growth strategy. And in fact, the Reunion Gold release stated that the joint venture between the two companies is intended to position the companies as the leading intermediate gold producer in the Americas, particularly the Guiana shield in South America. These include, not only Guyana, but Brazil and Suriname.
In summary, the transaction is a merger between the two companies, namely Reunion Gold and GMIN. Of note, it does not equate to the sale of the gold mine concession or a transfer of the license to GMIN. Rather, the two companies have been merged to become one combined company, albeit with two separate subsidiaries being created for their operations in the South America market, not only Guyana.
In view of the foregoing, Kaieteur News should apologize to their readers for their misleading and inaccurate reporting on these two specific matters.