Even in an industry known to be high-risk, the sudden evaporation of more than a million ounces of gold raised eyebrows
When geologists speak about how deposits of precious metal form in the earth, they reference changes that can take place over hundreds of millions of years.
This spring, investors in Toronto-based Guyana Goldfields Inc. experienced geologic time at a significantly faster pace: One morning in March, they held shares in a company sitting on nearly four million ounces of contained gold at its Aurora mine; and, by the end of the day, that number had declined by about 1.5 million ounces.
The sudden evaporation of more than one million ounces of contained gold from the company’s “proven and probable mineral reserve estimate” garnered immediate attention, and the company’s share price has declined 30 per cent since then.
Even in an industry known to be high-risk, the reduction raised eyebrows, in part because numerous securities laws govern how companies devise and communicate their reserve estimates.
With about $158 million in market capitalization and a single mine in Guyana, the company’s small size has meant it often escapes attention. But it is currently in the midst of a proxy battle with its former chief executive Patrick Sheridan, who is seeking to replace the board with his own slate of nominees.