Big Relief for Ex-PGR Workers

AFTER ALL the hullabaloo amid threats of street demonstration by angry former workers of Prestea Gold Resources (PGR) over the payment of their five months salary arrears plus their severance package, Chronicle can authoritatively report that the problem has finally been resolved following the release of $1.9 million (about ?14.440 billion) to PGR management to effect payments.

An indepth investigation conducted by the Chronicle at Prestea, Bogoso and Sekondi revealed that the amount which forms part of the $2.4 million that is to be paid to PGR management was released and lodged with one of the local banks at Prestea some time last week by the management of Bogoso Gold Ltd (BGL), the new owners of the Prestea mines.

The release and subsequent payment of the amount which has come as welcome news to the ex-PGR workers follow an agreement and a memorandum of understanding between the management of Gold Star, owners of BGL on the one hand and the Government of Ghana, Ghana Mine Workers Union, PGR management, among other stakeholders, on the other.

Chronicle gathered that under the agreement signed between all the parties which has not officially been made public, the Government of Ghana would maintain 10% shares in the yet-to-be-activated underground mine with the remaining 90% going to both PGR (45%) and BGL (45%). BGL would, however, have absolute control over surface mining in the area.

Part of the agreement which was sighted by this reporter during his investigations into the sale of the former PGR also revealed that some of the infrastructure associated with the PGR underground mine would be decommissioned and demolished by BGL to make way for the development of BGL's surface mining operations.

This means that the current processing plant belonging to PGR, their club house and possibly the local police station would have to be demolished by BGL before the latter pays the remaining $0.5 million as spelt out in the agreement to PGR, a wholly owned Ghanaian company.

Chronicle also learnt from unimpeachable sources that BGL management, under the agreement, has been tasked to commence the assessment of the safety and economic viability of the underground mine, a task which could take two years to complete, according to Mr. Peter Claringbull, General Manager of BGL, when this reporter contacted him at Bogoso.

"We are pleased with the progress of mining and development at Prestea which has progressed according to plan and our expectations. We are also pleased with the assistance of the other stakeholders in arriving at the new agreement relating to the Prestea underground mine," stated Mr. Peter Bradford, President and Chief Executive of Gold Star, in a document sighted by the Chronicle.

Claringbull, however, told Chronicle that the Prestea underground mine has been unprofitable for sometime as a result of its poor economies of scale and lack of re-investment.

"The consolidation and co-ordination of the activities of the underground mine into activities of the BGL will significantly improve the likelihood of its future, profitable operation as an incremental part of BGL's operations," he said.

Despite this assurance from BGL management, Chronicle learnt that it would take possibly a number of years before the Prestea underground mine could resume operations.

This fear being expressed especially by inhabitants of Prestea is based on the fact that PGR would have to off-load its 45% stakes in the underground mine to a strategic investor to raise the required funds to complement that of BGL to enable work start.

Under the agreement, BGL has only 45% shares in the underground mine but has absolute control over surface mining which appears to be less expensive to operate.

This means that BGL would have to get partners who would take over the 45% shares owned by PGR before the underground operations can begin after all the necessary research work has been carried out.

The Prestea underground mine is contained within a mining lease, which covers the same area as the surface mining lease granted to BGL.

The surface mining lease is restricted to a depth of 150 metres below sea level and the underground mining lease is restricted to material deeper than 150 metres below sea level.