Columbus Gold’s project in French Guiana safe with Paris’s new mining delegate — company

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Canada’s Columbus Gold (TSX: CGT) said on Tuesday that the future of its French Guiana Montagne d’Or gold project, a joint venture with Russia’s Nordgold, looks positive as Paris has appointed a mining veteran to lead the sector and coordinate projects in France’s South American department.

Didier Le Moine, a mining engineer that helped setting a nickel industry in the French overseas territory of New Caledonia, was appointed in late September to define, coordinate and implement actions for the development of a responsible mining industry in French Guiana, compatible with France’s ecological ambitions.

“French Guiana is endowed with
mineral‑rich and prospective geology and the territory should benefit from the
responsible development of these resources.” Columbus’ President and chief executive,
Rock Lefrançois, said.

Mining engineer Didier Le Moine helped setting a nickel industry in the French overseas territory of New Caledonia and is expected to do the same with Guiana’s gold sector.

The Vancouver-based company’s Montagne
d’Or gold project was originally planned over an 800-hectare site between two
protected natural reserves.

But after complaints from opponents
to the mine, worried mainly about pollution and biodiversity loss, the French
government formed a special committee to evaluate in detail the social and
economic benefits, as well as the impacts of a gold mining industry in the
French department, wedged between Brazil and Suriname.

By the end of last year, Paris
decided the partners could move forward with permitting and development of
the mine, but under certain conditions that would minimize the operation’s
risks and impacts.

While 90% of French Guiana is
covered by rainforest, mining is the department’s second largest industry,
mainly driven by artisanal miners who have dug its gold-rich soil for more than
150 years.

Paris has constantly deployed soldiers
to the territory in an effort to stamp curb the activity, which is causing
serious damage to nearby forests, waterways and communities.

According to the World Wide Fund
for Nature (WWF), miners use an average of 1.3 kilograms of mercury to extract
each kilogram of gold. The group has called illegal mining the region’s “main
social, health and environmental scourge.”

With the arrival of an increasing number of international companies and strong gold prices, Guiana’s mining industry could become a key player in the region.

“The territory can [now] envision a
new dynamic to implement a mining industry that is environmentally responsible,
technically sound, economically efficient, socially integrated, respectful of
working conditions and will be able to contribute to the development of the
Guyanese population,” Columbus Gold said.

The Montagne d’Or deposit has an
estimated 3.85 million ounces of gold in 85.1 million measured and indicated
tonnes grading 1.41 grams gold per tonne, and another 960,000 ounces gold
contained within 20.2 million inferred tonnes grading 1.48 grams gold.

Based on the bankable feasibility
study of 2017, the open-pit mine would produce 214,000 ounces of gold per year
at total cash costs of $666 per ounce.