While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

This is a Category A project because it is a large, complex project with correspondingly significant risks and impacts on the environment. Key issues to address during the various phases of the Project include surface and ground water management, pollution prevention, biodiversity management, cyanide management, non-hazardous and hazardous waste management, community health and safety, security, labor and strategic stakeholder engagement. Other issues related to the Project include the presence of ASMs within the wider concession and adjacent to the area, which are negatively impacting biodiversity and surface water resources due to their alluvial gold extraction activities and which could also pose a security risk. In addition, it is possible that settlements may establish near these ASM activities in order to provide opportunistic services which in turn may lead to negative social issues such as alcohol, drug abuse among others. As well, the new access to the Aurora mine site now afforded by the M3 (Aurora) extension to the Barama M3 road, has the potential to increase ASM in the area. Previously ASM were restricted to using either the Barama M3 road, the network of other Barama roads, or moving into the area along the Cuyuni River.

In order to address the above identified issues and meet the requirements of IFC’s Performance Standards, Guyana Goldfields has developed a comprehensive ESIA and an Environmental, Social and Health and Safety Management System (ESHS MS) which includes management plans and procedures to address existing and potential risks and impacts from the Project. Any remaining gaps with IFC Performance Standards will be addressed in an Environmental and Social Action Plan (ESAP).


Regarding PS5 (Land Acquisition and Involuntary Resettlement), this PS is not relevant as the Company’s activities will be carried out in heavily forested land which is remote and which does not have presence of communities or individual land owners. Regarding PS7 (Indigenous Peoples), this PS is also not relevant to this Project because of the absence of Indigenous People located in or using the area of influence of the Company’s operations. Finally, regarding PS8 (Cultural Heritage), although no cultural resources have been identified as part of the ESIA process, the Company has prepared a “chance finds” procedure to be applied in the event of any accidental unearthing of paleontological or cultural relics and will also conduct archaeological footprint surveys in the major project areas.

Key environmental and social issues relating to the Project are summarized below, along with specific information about how potential impacts will be addressed by the Company. Upon implementation of the necessary mitigation measures described below and in the attached ESAP, the Project will meet environmental and social requirements, namely IFC’s Performance Standards on Social and Environmental Sustainability and Access to Information Policy, and applicable World Bank/IFC environment, health and safety (EHS) guidelines and GIIP. All requirements are equally applicable to Guyana Goldfields’ staff as well as its contractors and subcontractors.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Environmental, Social and Health and Safety Management System (ESHS MS)



The Company has developed Environmental, Community Relations, Health and Safety and Human Resources Policies which explicitly state the objective of compliance with Guyanese Law and IFC’s Performance Standards and EHS Guidelines. The Company has also developed a comprehensive ESHS Management System which is dynamic in nature and includes the necessary elements of the plan-do-check-act cycle of continuous improvement which reflects the key elements of ISO 14001 and OHSAS 18001. Together with the policies, the programs which form part of this Management System include the identification of legal requirements, a program to identify environmental and social aspects and impacts, risk assessment, and risk management planning, occupational health and safety hazard identification, risk assessment, and risk management planning, a process to establish ESHS objectives and targets, operational control ESHS management plans and standard operation procedures (SOPs), organizational capacity elements, emergency preparedness and response, monitoring and measurement elements and stakeholder engagement and external communications elements.



Finally, the Company has committed to further refinement of the Social Management Plans to give more details for example on timelines of some activities, the setting up of a Community Relations Committee and more strategic community investment plans prior to the commencement of construction.



Guyana Goldfields is planning on contracting an Engineering Procurement and Construction (EPC) company for construction of the mill, river levee, tailings and power plant facilities. In this sense, the Company will require the selected EPC contractor to have in place a Management System aligned with ISO 14001 and OHSAS 18001 and develop the necessary ESHS operating procedures in line with the Company’s MS to manage relevant risks and impacts during the execution of their work.



Identification of Risks and Impacts



The updated ESIA for Guyana Goldfields has been developed by Environ International Corporation (Environ) and released in June 2013 and builds upon an extensive number of technical reports and formal studies which began in 2006 and has continued through 2012. The updated ESIA also builds on the information presented in the initial iteration of the ESIA for the Aurora Mine developed by Environmental Resources Management (ERM) in 2010 and introduces new information gained in public consultations, discussions with leaders of independent field studies, and other new field studies conducted for Guyana Goldfields by Environ, Ground Structures Engineering & Construction Ltd, Klohn Crippen Berger, and other consultants in 2011 and 2012. The updated ESIA also incorporates responses to comments to the ESIA provided by IFC in 2010 and project design changes reflected in the updated design documents.



A key component of the ESIA process has been the in
tegration of the identification and assessment of ESHS risks and impacts with the engineering studies of the Project to be able to avoid, mitigate and manage most significant risks. As part of this process, Environ has worked closely with the Company and its engineering consultants to identify said risks and impacts and “design out” and reduce those impacts which were identified as most significant. As an example of this iterative approach, the Project has been able to achieve a 51% reduction in the total Project footprint (from 3,898 hectares in 2010 to 1,911 hectares in 2013), a significant reduction in the Project’s energy demands of 31.3% from a total installed generating capacity of 40.74 MW in 2009 to 28.0 MW in 2013. Also, No. 4 fuel oil was selected to fuel the generators as a reasonable compromise between high-cost diesel fuel and heavy fuel oil (HFO) to reduce emissions of greenhouse gases and other contaminants and facilitate fuel transport and handling. With regards to accessing the site, the location of Tapir Crossing was selected to take advantage of the existing Barama (M3) road and an existing spur logging trail north of the Cuyuni River. The use of the existing Barama road between Buckhall and the area north of Tapir Crossing area permitted the Project to avoid building a new road over large, previously undisturbed forested areas and minimize the Project’s impact to only a 33 km extension to reach Tapir Crossing and on to the Aurora site.



Based on the ESIA process and an evaluation of the impacts, these were determined to include: (i) management of erosion and maintenance of geotechnical stability in all dikes, dams, embankments, stockpiles, and other major earthworks constructed at the Aurora site; (ii) management of tailings effluent, waste rock stockpile and road right of way (ROW) runoff, pit runoff/underground mine water, and landfill leachate, in order to ensure that residual impacts from historical ASM within the Project area of influence are not exacerbated by project operations, and mitigated as necessary to ensure that runoff/effluent quality meets or exceeds requirements established by the governing Environmental Permit, IFC’s EHS Guidelines and the International Cyanide Management Code (ICMC); (iii) management of opportunistic influx at the Aurora and Buckhall sites, associated with employment seekers, perceived ASM opportunities, and vendors seeking to exploit legal and illegal commercial opportunities with the Project workforce; (iv) management and mitigation of the transportation-related environmental and social risks and impacts associated with the long-term delivery of machinery, equipment, fuel, reagents, and other consumables to the Project over the Barama/Aurora extension road; (v) long-term management of the potential spills of fuel or hazardous chemicals at the Aurora site and the Buckhall logistics support facility; and (vi) long-term management of non-hazardous and hazardous wastes generated at the
Aurora site and the Buckhall logistics support facility.



It is also important to note that in 2009 the Company, through Ground Structures Engineering & Construction, developed an ESIA in compliance with Guyana EPA requirements which covers construction and operation of the Aurora Mine. This ESIA was approved by the Guyana EPA in September 2010.



Management Programs



As part of the development of the ESIA, management and mitigation measures for the impacts identified during the various phases of the Project have been developed. Also, as part of the existing ESHS Management System, the Company has developed an Environmental and Social Management System Plan (ESMS Plan) which includes ESHS Management Plans and SOPs to avoid, minimize, and mitigate risks and impacts likely to occur during the various phases of development from early works, through construction to operations and subsequently mine closure. This Plan is designed to be periodically reviewed and updated in response to the changes that will occur in various phases of the Project life cycle.



Among the Management Plans already developed as part of the Company’s ESHS MS include: Exploration Management Plan, Early Works Construction Management Plan, Erosion Prevention and Control Plan, Occupational Health and Safety/Accident Prevention Plan, Emergency Preparedness and Response Plan, Hazardous Materials Management Plan, Spill Prevention, Control and Contingency Plan for Aurora, Buckhall Spill Contingency Plan, Transportation Management Plan, Waste Management Plan, Mine Reclamation and Closure Plan, Community Relations Management Plan, Influx Management Plan and an ESHS Monitoring Plan. Additional plans will be developed for application during the construction and operations phases of the mine. Currently, the Management Plans are supported by 44 SOPs including, among others, those relating to waste management, identification of project-related safety hazards and assessment of risks, identification of non-conformances and corrective/preventive actions, vehicle fuelling and spill prevention, ESMS training program, prevention and monitoring of communicable diseases, confined space work safety, handling and storage of hazardous materials and safe operation of heavy equipment.



Specifically related to the Social Management Plans, the Company has committed to further refinement of these Plans to give more details for example on timelines of some activities, the setting up of a Community Relations Committee and more strategic community investment plans prior to the commencement of construction.



As mentioned above, Guyana Goldfields will contract an EPC company for construction of several of the major infrastructure works for the Project. Guyana Goldfields will assure that the commitments for the Project included in the ESIA and the ESHS MS are translated into the tendering documents and will require the winning bidder to develop the necessary operating procedures for each of
the relevant ESHS aspects related to their activities, for approval by the Company prior to the commencement of work (See Action # 1 of ESAP).



Based on IFC’s ongoing due diligence of the Project, a number of recommendations on the management of biodiversity resources were identified (See Section on PS6 below) which are being addressed by Guyana Goldfields. As part of upcoming work, the Company has agreed to develop a Biodiversity Management Plan (BMP) ahead of construction to clarify avoidance, mitigation and monitoring requirements for biodiversity resources during construction and operations. This Plan will also include a strong Offset Strategy in alignment with PS6 to achieve No Net Loss of biodiversity (See Action # 8 of ESAP).



An additional issue that needs to be carefully managed during Project construction and operation is that of influx related to both people seeking opportunities created as a result of the expanding mine operations and those of ASM moving into the area to search for gold. The Government of Guyana, in granting the environmental permit stated that the Project will actively discourage influx into the mining concession and not allow outsiders to settle on its periphery, and as a result, through the initial 2010 ESIA the Project had initiated several actions and procedures to minimize any significant incremental effects regarding influx to the Buckhall logistics port, Aurora Mine License area or the lower Cuyuni basin. First, during the course of exploration activities, prospective job seekers from Georgetown or other population centers have not appeared at the Aurora site due to the fact that Guyana Goldfields has effectively communicated that all hiring is to be done in Georgetown, not onsite. Second, no informal commercial activities have been established near the Aurora site during the exploration phase or early works construction, and Nursey’s Landing at Buckhall has not expanded, because workers are not permitted to engage in any sort of interaction with transient groups or informal communities outside of the established camp under the Project’s control.



Historically, influx to the lower Cuyuni has been driven largely by ASM activities using the Cuyuni River for access, independent of Project exploration or early works construction activities. In addition, the existing Barama (M3) road and other Barama network roads are not being used as colonization corridors, as might be expected in some other parts of South America with traditions of expanding agricultural frontiers along road networks. One reason for this is because forested lands of the region are not valued as potential farmland by the Guyanese, and agricultural activities are typically concentrated in the coastal plains. In this sense, there is little incentive or motivation for urban residents to move into the lower Cuyuni basin in the absence of significant new economic opportunities. Also, over the years, a large presence of illegal loggin
g has not been observed. Barama seems to have reasonable control over their concessions which surround and overlap with the Aurora Concession. This being said, the potential for sporadic ASM contacts and interest in or near the Aurora site is likely to persist over the life of the Project. Maintaining contact through periodic engagement with the informal ASM community at Aranka Mouth will be critical to understanding ASM trends and issues in the area of the Project.



There is no doubt that the Barama road network coupled with the extension of the M3 road into the Aurora camp has opened up previously unexplored areas for which prospecting licenses may be given by the Guyana Geological and Mines Commission (GGMC). This could have a significant adverse effect on biodiversity in the area, as ASM operations are very detrimental to the environment and the ASM do little or no remediation once they have completed their exploration/mining activities. During appraisal, the IFC team saw evidence of environmental impacts from ASM prospecting adjacent to the Aurora concession, off the new access road, as these ASM groups are now able to access licenses that they were not able to access as easily before the road was built.



The Influx Management Plan in the 2013 ESIA suggests further mitigation measures to minimize the potential for increased ASM activities, as well as illegal commerce, prostitution, and other illicit activities. Management and mitigation practices include the erection and manning of barriers across the access roads by the Guyana Police Force (GPF) who monitor all traffic using the area and an increased presence of GPF/GGMC at the Tapir Crossing area to aid with security issues and influx management. The GGMC currently have a ranger stationed at Aranka Mouth whose job it is to check that ASM have their proper licenses and are operating on the correct concessions.



It is difficult to estimate the scale, severity, frequency, and duration of influx-related impacts that are predicted, with reasonable certainty, to persist over the lifetime of the Project. The M3 is a public road, although the operators are allowed to charge and collect a toll, this may not prove to be a significant disincentive to those ASM wishing to access legal claims. The Company has committed to careful and consistent implementation of the proposed management and mitigation measures that will be required to manage these impacts and adapt their Influx Management Plan accordingly if significant impacts start to occur. This plan should be evaluated on an annually basis (See Action # 2 of ESAP) and IFC will require an updated plan as a condition of disbursement.



Organizational Capacity

The Project’s current organizational structure includes a President and Chief Executive Officer (CEO), an in-country Chief Operating Officer (COO) and several managers including for Human Resources, Security, Engineering, Health and Safety, Environmental, Corporate Socia
l Responsibility (CSR), General Manager and Operational Readiness and an in-country CFO. The organization also has a Country Manager who reports directly to the COO.

The Company’s corporate organizational structure includes an Executive Chairman, a President and CEO, a Corporate Manager, Chief Financial Officer (CFO), COO and several Vice-Presidents, including those for Investor Relations, Exploration and Sustainability, Health and Safety.


Throughout the years, the Company’s senior management has valued a relationship with IFC to assist the Company carry out exploration and upcoming mine development in line with the PSs and GIIP.


In terms of ESHS personnel, the Company has an Environmental Manager and a Health and Safety (H&S) Manager in country who reports to the Vice-President Sustainability, Health and Safety. In turn, the Company has an Environmental Supervisor on site who reports to the Environmental Manager and three Health, Safety and Medical Officers who report to the H&S Manager. The CSR manager reports directly to the Country Manager.


Monitoring and Review

As part of IFC’s due diligence, the Lenders contracted an Independent Environmental and Social Consultant (IESC) in 2013 to undertake a third party review of the ESIA and the Bankable Feasibility Study (BFS) developed by Environ and Tetra Tech, respectively, against Senior Lenders’ requirements. As part of this assessment, a number of gaps have been identified on ESHS aspects and design which are being addressed by the Company and its consultants. Prior to construction, the Company will hire an IESC to carry out regular ESHS audits of construction activities and the implementation of the ESMPs and ESAP for reporting back to the Lenders, and prepare monitoring reports for public disclosure (See Action 3 of ESAP).


Extensive internal monitoring of EHS parameters is already underway as part of the existing Management System for the Project (including pollution prevention, erosion control, water quality, health and safety, transportation, etc). Prior to the start of construction, an Environmental Monitoring Plan (EMP) will be developed to capture all of the specific qualitative and quantitative monitoring needs identified in the ESIA for this phase, as well as from individual management plans and supporting SOPs, to assure compliance of the various environmental aspects with Guyana EPA requirements, IFC’s PSs and EHS Guidelines and GIIP.


External Communications and Grievance Mechanism

In the ESIA completed in 2010, the SEP included an outline of a grievance mechanism upon which the Company built a more sophisticated process. The Company’s Community and Environmental Grievance Procedure includes the following steps: a receipt and registry system; eligibility assessment and evaluation; tracking monitoring and reporting; and company and community feedback and information sharing. Posters about the grievance mechanisms and the various options for filing comp
laints or raising issues are posted in the communities. People can write, call, email or register a concern in person.


The current community grievance procedure has functioned effectively in addressing those grievances recorded so far, with the average time span for addressing these issues being 14 days. While no systemic issues have come up which would necessitate a change in processes, two (2) community grievances were recorded between April of 2012 and now (November 2013), which related to harassment and environmental issues. One example concerned the erosion of roads in Buckhall which, after a period of heavy rainfall, had left potholes in which mosquitoes were breeding. The report was logged, discussed with and referred to the Environmental Officer for action. The potholes were covered and the area fogged to kill the mosquitoes. The complainant confirmed that the action taken satisfactorily addressed the issue.


Ongoing Reporting to Communities

The Company will continue to have additional meetings during the Project’s construction and operations phases with the above stakeholders and communities. The Company will also disclose progress on the outstanding items that are listed in the attached Environmental and Social Action Plan (ESAP). Guyana Goldfields will also disclose the monitoring reports of the IESC which will provide further Project information during future phases to interested stakeholders.


Community Investment

The ESIA prepared by ERM contained a Community Development Plan, which the Company has taken and elaborated on to form their Corporate Social Responsibility and Sustainability Strategy. Guyana Goldfield has taken its role as corporate citizen seriously from the beginning of their exploration phase, and had several early initiatives that contributed to the Company’s social license to operate. Starting in 2002, the Company invested in projects that supported the indigenous communities where they recruited a significant number of their exploration workforce, in St. Cuthbert’s and Itabali. The program has expanded into various community and national health and education programs, with a continuing focus on indigenous communities, but also includes support to environmental causes as well as human resource development. To date, the Company has spent approximately US$2,000,000 in community development programs.

Working Conditions and Management of Worker Relationships



The Company has had a dedicated Human Resources Manager for several years, who has experience in the mining industry in Guyana, and has a small team working with him based in the Georgetown office. The Company employs approximately 250 people annually in exploration work. During development and construction the Company expects to have approximately 900 employees (including company and contractor workers), which will stabilize at approximately 500 employees during operations from 2015 and beyond. Guyana Goldfields has a human resource policy and manual, which has been developed over the years since IFC’s initial equity investment and now, includes all of the requirements of Performance Standard 2, as well as those of national law, the Guyana Labor Act. The policies include recruitment, onboarding and placement, annual, sick leave and leave with/without pay, wages and salary.



The Company is preparing an Employee Manual to hand out to employees and potential contractors, such as the EPC employees, during construction to ensure workers are familiar with the Company procedures, including their Grievance Mechanism discussed below. The policy includes sections on recruitment and placement, onboarding, annual and sick leave, wages and salary, and absence (with and without pay). They are currently refining their Employee Manual and this will be shared with the EPC contractors when they come on board, as they will be required to comply with the same policies.



The Company offers a comprehensive benefits package to its employees including group health, life and accident. In addition the Company provides training programs to enhance professional development for all levels of employees on general skills development, technical skills development in geology and surface mining, and will continue with new skills development on underground mining and milling.



Worker’s Organizations



The employees at Guyana Goldfields do not belong to a union at this point. Because they are in the exploration phase which has a temporary workforce that has varied considerably throughout the years, the local unions have not sought to organize the Company’s workforce. The unions have approached Guyana Goldfields for information, and the Company has provided them with the information they have requested. The Company has also spoken with their employees and explained that they have the right to form and join workers organizations and to bargain collectively with their employer.



It is envisioned that during construction and operations, the workforce is more likely to choose to unionize. There are three unions that are likely to vie for representation of the employees: The Guyana Bauxite and General Workers Union; The Guyana Minerals, Metals and Workers Union, and the National Association of Agricultural, Commercial, Industrial Employees (NAACIE). They are not allowed to solicit members on si
te but can approach employees outside operations and give employees membership forms. The Company has shared their manpower rolls with the three unions. The law requires a union to have 40% of the employees elect to join their union. At present the government is quite pro-union and pro-employee, increasing worker’s rights on occupational health and safety (OHS), unemployment insurance and severance pay.



Guyana Goldfields is an equal opportunity employer; there is no discrimination in hiring, and there is a requirement to hire a certain percentage of Guyanese nationals.



The Company has never completed a retrenchment plan, and there has been natural ebb and flow of employees over the years of exploration, as is the nature of that phase in the mining sector. However, when the Company is moving from construction to operations and from operations to decommissioning, Human Resources will consider addressing the reduction in manpower and provide support as outlined in Performance Standard 2 for retrenchment planning (See Action # 4 of ESAP).



Grievance Mechanism



The Company developed its grievance mechanism in August 2011, which includes a formal process following the Ministry of Labor’s legislation. The mechanism consists of several stages including complaint, grievance, conciliation and arbitration. It acts as an early warning system to help management identify and resolve worker issues. Training has been provided to Georgetown Managers, Camp Managers, Security, Mechanics, Equipment Operators, and all staff. There have not been many written grievances received as most people seem to approach management staff that they know and feel comfortable with, if and when they have an issue. Recently, the Company has received two complaints via the HR Managers Facebook page. However, as the Company is going to grow substantially, and the vast majority of people will transfer over to be contractors employees, the Company recognizes the importance of further strengthening the documentation and tracking process. In addition, they will need to further train their own employees and contractors on the grievance mechanism process to improve uptake of the process.



The most prevalent complaint or grievance raised has been related to salaries either due to employees not happy with the amount agreed to after some time or as a result of the payment system. The new system of direct bank deposit has caused some confusion and, therefore, outreach sessions were organized involving the Accounts Department and in some instances the Human Resources Manager. This provided a forum for employees to raise queries and seek clarification. This did help considerably in addition to the posting of a Salary Payment Schedule.



The Company has agreed to improve the systematic documentation and tracking process of their grievance mechanism, as well as their analysis of those complaints received, to interpret whether or not they have systemic issues which need to
be addressed and monitored. They will also ensure that their contractors do the same. They will report on this in their Annual Monitoring Report (AMR) to IFC.



Protecting the Work Force



The Company has a policy of hiring only employees 18 year of age and above and this policy will also apply to contractors. This is done through a check of employee’s birth certificates at hiring.



Occupational Health and Safety



As mentioned above in the section on Management Plans of Performance Standard 1, the Company has developed a number of SOPs related to worker occupational health and safety. There has been a consistent level of improvement from IFC’s initial involvement to the present time regarding health and safety at the various operational facilities. In 2012, 200 hours of training were received by each employee and 726 personnel were trained in various initiatives. To date (Oct. 2013), 200 hours of training have been received by 1019 employees. A number of training modules have been prepared and rolled out to employees and these include, among others; emergency response and first aid following mock safety drills; safe operations of ATVs, light vehicles and heavy equipment; life and fire safety; welding and cutting safety, compressed gas storage and handling and transport; electrical safety, spill prevention and response, waste management and medic orientation.



Specific protocols and procedures are established for camp life, including no drugs or alcohol, no unauthorized possession or removal of camp or employment property, no sexual harassment or unlawful harassment, and no use of Company equipment at any time without proper approval. All employees have been issues with proper Personal Protective Equipment (PPE). Basic First Aid is available at each camp and a medic is on staff. The Company has a malarial protocol for all employees and visitors.



Specific protocols exist for a variety of OHS issues, and include, but are not limited to the list of SOPs above. The key issue of concern is rolling out all of these SOPs to the employees of the EPC and ensuring that the EPC is in compliance with its Environmental, Social, Health and Safety Implementation Plans (ESIPs) as outlined above in the section on PS1.



In addition, the EPC will be required to be in compliance with many of the requirements of PS2 and this will be the responsibility of Guyana Goldfields to ensure that this occurs, by including the requirements in contracts as well as through regular monitoring and enforcement of Company protocols and procedures. Contracted workers will be trained on the use of the Company’s Employee Grievance Mechanism.



The Company’s Human Resources Policy specifically prohibits forced or child labor and it is understood that these conditions and a minimum hiring age of 18 are extended to all contractors. Detection of any forced or child labor issues on the part of any project supplier or contractor is considered grounds for cont
ract termination

Ambient Conditions



The Project is located within the Cuyuni Basin in the Guyana Shield with an average rainfall of 2,450 millimeters per year. The site is drained by the Cuyuni River, which borders the Project to the north, along with several associated tributaries. The general area is dominated by tropical forest intermingled with aquatic environments in the form of rivers and numerous small, largely low gradient streams. Seasonal flooding of bottomland forests occurs during the wet seasons which typically run from mid-April to mid-August and again from mid-November to the end of January.



The area of the wider concession where surface and underground mining is planned has been partially cleared over the years to facilitate exploration activities. Dust levels in the prospecting areas and along trails are low due to the high humidity and frequent rainfalls, except for a few isolated, localized, and heavily-trafficked sections of road during dry season conditions.



Based on groundwater monitoring conducted in 2006 and 2007, shallow groundwater exists within the unconsolidated overburden at depths ranging from approximately 1 m to 4 m below ground surface. Based on ground water elevation data, the flow of groundwater in the saprolite as well as the deeper bedrock zone is mainly towards the Cuyuni River from the northeast to the northwest.



Surface water samples collected in the Project area during both the dry and rainy seasons show low levels of metals mostly below detection limits and the presence of higher levels of turbidity and total suspended solids (TSS), mainly attributed to increased sediment loads from uncontrolled ASM dredging operations upriver from Aurora.



The Project area is mostly uninhabited with the nearest informal community (Aranka) located approximately 16 km downstream. Hence, air quality in the project area is good and no sensitive community receptors exist close to the future construction and mining operations.



Water Management



Due to the climatic conditions present in the area, water is one of the most critical aspects of the Project in relation to environmental impacts, mitigation and management.



The Company has developed a water management approach to address flood protection for the open pit and underground operations, the handling of water impacted by mining and mineral processing activities and the management of site runoff. Guyana Goldfields will also develop, together with the selected EPC contractor, a Construction Water Management Plan to make sure water resources are conserved and protected. Specifically, and as noted in the ESIA, the objectives of this Construction Water Management Plan will include (i) diverting as much water as possible away from the open pit and Tailings Management Area; (ii) minimizing the use of fresh water and maximizing reuse of process water (including TMA supernatant/reclaim water); (iii) reducing the sediment load in runoff from waste rock stockpile
s to below IFC’s limits for TSS; (iv) maintaining trafficable site access during storm events; and (v) maintaining discharge water quality values below IFC EHS Guidelines and ICMC discharge limits. In this sense, the Company has agreed to sign on to the Cyanide Code and work through the process of ICMC Certification (see Action # 6).



During the development of the ESIA, the Project carried out an initial water balance model using the GoldSim™ software platform which simulated operational levels for the Mine Water Pond (MWP), Fresh Water Pond (FWP), and TMA from predicted precipitation and other inflows and outflows associated with Project infrastructure. Based on these findings, preliminary designs for major mine infrastructure assume that excess water may accumulate in specific seasonal situations, and, for the sake of environmental, safety, and operational reasons, must be periodically discharged to the environment following its collection and treatment.



The Water Management Plan will be operated in conjunction with a Tailings Management Plan which will include a cyanide detoxification circuit in the process plant to routinely achieve a concentration of <0.5 mg/L weak acid dissociated (WAD) cyanide (CNWAD) in the as-deposited process tailings stream as per IFC EHS Mining Guideline limits and CNWAD maximum permissible values of the ICMC. Detoxified process tailings will be directed via pipeline to a dedicated TMA constructed approximately 1 km south of the process plant. It is important to note that even though the tailings will already be detoxified to permissible environmental discharge levels, additional degradation of residual cyanide in the as-deposited tails may be expected from exposure to ultraviolet (UV) radiation at the TMA surface, volatilization, and the formation of various metallic cyanide complexes in the tailings mass.



Based on geochemical analyses of waste rock stockpile ore, it has been determined unlikely that Acid Rock Drainage (ARD) will be generated in any of the waste rock stockpiles, although some limited potential appears to exist associated with one specific area of saprolite. The design of the Project contemplates the construction of perimeter drains around the footprint of each prepared stockpile pad, and routed to the MWP or to dedicated settling ponds for additional dilution or treatment, as necessary, prior to being permitted to discharge to the environment. Discharge limits will be identical to those used for the MWP under IFC’s EHS Guidelines. As the tailings solids settle, a supernatant pond will be formed that will be decanted by barge mounted pumps and recycled back to the mill and process plant for a variety of industrial uses. Monitoring wells and surface water monitoring stations will be installed up-gradient of all projected sedimentation pond locations.



Solid and Liquid Non-Hazardous and Hazardous Waste



As part of the design work for the Project, the option of filtered tailings (“d
ry stack”) was evaluated by the Company as opposed to detoxified tailings slurry disposal. However, this option was initially discarded due to several technical considerations including geotechnical handling difficulties during the movement of material, the difficulty of desiccation of these tailings in extremely wet environments such as in Guyana and the fact that saprolite ores with high percentages of clay minerals are not conducive to effective filtration, with related high filtration costs and low efficiencies.



The Company has agreed to sign on to the Cyanide Code and will work through the process to get ICMC Certification for the Project (see Action # 6).



Following a review of the design of the Project, waste rock stockpile footprint areas were also reduced by 38% from 219 ha to 136 ha. Even though ARD is not expected to be an issue for these materials, toe drains and settling ponds will be provided for each stockpile to address potential TSS issues in stockpile runoff and to permit treatment or dilution if ARD trends are ever observed in any waste material.



For the management of non-hazardous and hazardous waste, the Company will adopt a waste management strategy - operationalized through a Waste Management Plan - focused on prevention, minimization, reuse, recycling and final disposal.



It should be noted that limited formal recycling opportunities exist in Guyana. Also, at present, there are no permitted hazardous waste treatment and disposal facilities in the country, and insufficient capacity exists for appropriately controlled offsite disposal of municipal and other solid waste (with the exception of the hospital in Georgetown that does have a medical waste incinerator that could potentially accept the Project’s clinical waste). Due to these limitation, the Company plans to construct, permit and operate an appropriately designed landfill at Buckhall and at the Aurora site for municipal and non-hazardous solid waste. Medical waste will be accumulated in dedicated containers and periodically sent to the Georgetown hospital medical waste incinerator for disposal. All other hazardous waste will be accumulated in dedicated steel intermodal containers located within the security perimeter at the Aurora and Buckhall sites, and retained in controlled storage pending identification of an appropriately permitted and economically viable hazardous waste disposal or treatment facility.



Cyanide Management



Sodium Cyanide will be used as part of the mineral extraction process for the mine. In alignment with GIIP, the Company will follow the requirements of the ICMC for the procurement, transport and handling of Sodium Cyanide. In addition, Project components and processes (such as the mineral separation process plant, detoxification plant, tailings pipeline, TMA and associated facilities) have been designed to comply with the requirements of the ICMC. Prior to the transport and use of Cyanide, a Cyanide Management Plan wil
l be prepared as part of the ESMS to place specific requirements in line with GIIP. A few of these requirements include the purchase and transport of cyanide from ICMC authorized producers and transporters, the transportation of cyanide reagent as dry briquettes in dedicated stainless steel ISO delivery/mixing containers, the storage of high strength cyanide solution separate from acids or other reactive materials, the implementation of secondary containment for all cyanide solution transfer, mixing, leaching and detoxification tanks, construction of cyanide storage, leach and detoxification tanks and piping systems in open air to avoid accumulation of cyanide gas, and day to day monitoring and management of the processing plant and the TMA in accordance with the Mill/Leach Plant Operations and Tailings Management Plan.



Petroleum Products and other Hazardous Materials



Among some of the hazardous materials to be used during the various phases of the Project include, among others, No. 4 fuel, gasoline, aviation fuel, lubricants, hydraulic fluids, sodium cyanide and other chemical reagents, explosives and laboratory chemicals.



As part of its Management System, the Company will develop a Hazardous Materials Management Plan to make sure transport, storage and use of petroleum products and hazardous materials comply with GIIP. A Spill Prevention, Control and Contingency Plan will also be developed to address emergencies related to the transportation and handling of these products.



Energy Use



Early in the Project design process, various power options were evaluated including the construction of a series of hydroelectric power alternatives on the Cuyuni River and the Julian Ross Itabu, as well as a combined hydropower and biomass alternative using trees removed from the proposed reservoir area. However, these alternatives were rejected following an Alternatives Analysis due to their related complex impacts on the environment.



Initial power design work in 2009 estimated the need for a total installed generating capacity of 40.74 MW for the Project. However, additional iterative design work significantly reduced the Project’s energy demands to a total installed generating capacity of 28 MW which resulted in a 31.3% reduction in energy needs. Energy will be supplied through No 4 fuel-fired generators (3.5 MW each) - 3 generators during construction and 5 additional generators during operations. No 4 fuel was also selected as a compromise between the higher cost diesel fuel and HFO which is difficult to transport and handle and generates significantly greater air emissions. It is estimated that fuel consumption will be approximately 6.1 million liters during the 18 month construction phase and 40 million liters/year at 10,000 tonnes per day mill throughput during the operations phase. It is expected that greenhouse gas (GHG) emissions for the Project during construction will be around 9,400 tonnes per year and during operations 94,
000 tonnes per year.





Emergency Preparedness and Response



As part of its ESHS MS, the Company has prepared an Emergency Preparedness and Response Plan (EPRP) to minimize the potential for incidents and accidents during construction and operation of the mine. This Plan governs emergency situations at the Project site, Buckhall and the access road related to transportation of Cyanide and fuel products. The Plan specifies engagement protocols with Barama personnel in case of responses to spills and with Guyana police and security forces in the event additional resources are needed in response to particular criminal or security emergencies. The Plan also includes guidance on specific reporting requirements for the GGMC and Guyana EPA in relation to emergencies, releases of contaminants, pollution incidents or any observations of illegal wildlife trapping or trading.



All employees of the Company together with the EPC contractor and other subcontractors will undergo training on the EPRP through camp inductions and periodic more specialized training on incident and accident scenarios and response.

Community Health and Safety



The main community health safety and security impacts from the Project include risks associated with hazardous materials and personnel transport, the potential for a tailings dam failure, health issues exacerbated by influx and health issues associated with artisanal miners.



Transport of materials and personnel from the Buckhall Port to the Aurora Site can pose a significant risk on both Company and contractor personnel and on other users of the M3 road, including personnel from the Barama Logging Company and ASMs traveling along the route. In order to mitigate the risks associated with these transport activities, the Project will develop a comprehensive Transport Management Plan which will include a safety risk assessment of the entire transport route to identify high risk areas, determine allowable speeds, times of travel and other safety measures to protect drivers and equipment. As part of this Plan, appropriate signage will be placed along the route and Company vehicles will be fitted with a GPS tracking device to control speeds. This Plan will also include a safety training program (See Action # 5 of ESAP).



Based on global seismic hazard maps, the site is located in an area of low to moderate seismic risk. The initial TMA and river dike structure design were subject to a high level independent engineering review by Knight Piesold in July 2013. According to this report, based on ANCOLD (May 2012), the tailings management system would be considered to have a “high” dam failure consequence category, resulting in a requirement to adopt a rigorous design process. This independent review did not identify any fatal flaws to the initial design of the TMA but did identify several recommendations for further work including (i) the need to formalize a detailed dam break assessment to ensure risks are fully assessed; (ii) that a detailed dilution/concentration/water balance model be formalized that confirms that the continual discharge from the TMA under all operating and climatic conditions will meet discharge limits; and (iii) that a sensitivity assessment be undertaken on the achieved in situ density of deposited tailings to confirm embankment freeboard and staging provisions are adequate for a range of values.



Security Personnel



The Company at present has an ex-police chief as the head of their security, who has participated in some Human Rights training as well as UN Missions abroad. The security team at the mine site and in Georgetown is not armed. Currently the security personnel patrol the Barama public road, as well as the new extension to the road the Company has constructed in the past few years, at three checkpoints. There are checkpoints along the roads, so that the Company knows who is entering and potentially going in to the Guyana Goldfield property. The Company is primarily controlling and monitoring the access of artisanal and small scale miners to the interior. In addition the
y have also demarcated the concession of the Aurora Mine and put up several guard huts along that boundary line, as people were beginning to infiltrate the Guyana Goldfields concession. The security team has received some training on weapons and use of force by the Guyanese National Police, but is not armed at present, with the exception of the two most senior managers. This will change during construction and especially during operations, when at that time the Company will need to ramp up their security protocol and will consider having some security armed.



The Company has agreed to the requirements of Performance Standard 4 and will complete a Security Management Plan to be implemented at the time of construction and operations that will be in line with the Voluntary Principles on Security and Human Rights. In addition, changes will be needed to their Community Grievance Mechanism to address potential complaints on Security Personal (See Action # 7 of ESAP).

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From the beginning of IFC’s involvement in 2006, the Company has identified their various stakeholders and engaged periodically with them throughout the exploration phase. When the Company was applying for their Environmental License from the Guyana EPA in 2009/2010, the ESIA completed by ERM contained a Stakeholder Engagement Plan (SEP). That process required a certain level of community consultation and the Company met with communities in Bartica, Itaballi, Buckhall, Kurutuku (the nearest Indigenous Peoples settlement 40 km upstream on the Cuyuni from the Project site), Parika and Aranka Mouth, as well as some ASM communities adjacent to the Aurora Concession. At that time, the Company also met with various environmental groups such as World Wildlife Fund (WWF), Conservation International (CI), and Iwokrama Rainforest Program (Iwokrama) as well as with the three Guyanese Indigenous People’s NGOs, the Amerindian Peoples Association (APA), The Amerindians Action Movement of Guyana (TAMOG) and Guyanese Organization of Indigenous People (GOIP). In addition, meetings were held with The National Trust of Guyana, and the Ministries of Environment, Local Government, Amerindian Affairs (MOAA) and Health.

The Company has also consulted with the GGMC, who recommended that Guyana Goldfields maintain good relations and open communications with the ASM, which the Company has done. Periodically, both community members and ASMs have prevailed on the camp’s medical officers for emergency first aid and medical evacuation from the camp site.

Another phase of stakeholder consultation took place beginning in January 2012, when Guyana Goldfields’ representatives, along with an Environ social specialist and the Company’s senior local consultant, conducted public consultations with two local unincorporated communities, Aranka Mouth and Buckhall, deemed to be within the Project’s social area of influence; and also meetings in Georgetown with representatives of the GGMC, Amerindian Peoples Association (APA) and the Ministry of Amerindian Affairs (MOAA). The meeting’s objectives were to (i) provide the four major stakeholders (Buckhall, GGMC, APA and MOAA) with an update on the Project; (ii) formally present information on the Project; and (iii) provide all stakeholders present with an opportunity to raise questions and any concerns they may have on the Project so they can be considered prior to completion of the final updated ESIA. As observed during the public consultations at Aranka Mouth and Buckhall and the meetings in Georgetown with GGMC, MOAA, and APA, all parties consulted were interested to hear about the Project’s progress and appreciated the opportunity to raise questions and provide their opinions and suggestions, and they appeared overall to be in support of the Project. While community residents welcomed the prospect of job opportunities and community support, they did express concerns about the potential for further contamination of the river, and the use of cyanide, fearing the possibility of another spill like the one that occurred at OMAI Gold Mines in 1995. The Company and their consultants addressed these concerns at the meetings, giving details of the mitigation plans in place to address and avoid these types of impacts.

In meetings with the Company, both the MOAA and APA were highly supportive of the Project’s past recruitment of Amerindians from the villages St. Cuthbert’s Mission and Moruca. In addition, they expressed interest in being involved in future project corporate social responsibility (CSR) activities involving Amerindians, public consultation meetings and recruiting activities in particular.

Guyana Goldfields will make a copy of the ESRS, ESAP and related ESIA studies and reports available in the following locations near the project site for a period of 60 days starting December 23, 2013.

Georgetown Office

Administrative Office in Buckhall

Administrative office at Aurora Site

The ESIA has been available on the Guyana Goldfields web site since October 11, 2013.


For further information, questions or comments please contact:

Guyana Goldfields Inc.
141 Adelaide St. West
Suite 1608
Toronto, Ontario, M5H 3L5
Canada

Attention: Jacqueline Wagenaar
Vice President, Investor Relations & Corporate Communications
Tel: 416-628-5936 Ext 2295
Email: mailto:jwagenaar@guygold.com


AGM Inc.
7 North Road
Lacytown
Georgetown
Guyana

Attention: Violet Smith
Country Manager
Tel: (Office): 592-225-8371
Email: mailto:vsmith@guygold.com

Broad Community Support is not applicable for this project

Company actions to ensure EPC Contractor’s ESHS Compliance with Mine ESMPs	Anticipated Date
The Company will ensure that the selected EPC Contractor develops individual ESHS operating procedures (Environmental, Social, Health and Safety Implementation Plans) based on the requirements of the Company’s overall ESHS MS prior to the commencement of work. The ESIPs will address the following issues, among others: • Pollution Prevention (Noise, Vibrations, Dust, Petroleum & Fuels Management, etc); • Air Quality Management; • Erosion Control and Revegetation; • Biodiversity Management; • Water Resources Management; • Solid and Liquid Non-Hazardous and Hazardous Waste Management; • Waste Rock Management; • Transport Management; • Hazardous Materials Management; • Emergency Preparedness and Response; • Occupational Health and Safety; • Cultural Heritage Management; • Stakeholder Engagement; • Labor Management; • Community Health, Safety & Security Management; • Environmental Monitoring Plan (EMP).	February 15, 2014
ASM and Influx Management Plan
The Company will review and update their ASM and Influx Management Plan annually based on the potential impacts that are occurring in the area, and assess whether the relevant mitigations measures are adequate and add additional measures as required.	March 1, 2014 and thereafter, update annually based on monitoring of ASM activities and influx level.
Independent Environmental and Social Monitoring
The Company will hire an Independent Environmental and Social Consultant (IESC) firm to satisfaction of IFC to carry out regular ESHS audits of construction activities for reporting back to the Lenders.	April 1, 2014
Retrenchment Plan
A Retrenchment Plan will be completed for the phases moving from Construction to Operations, and from operations to Decommissioning as per the requirements of PS2.	Three months prior to the beginning of the operations phase (December 1, 2014) and the decommissioning phase (at end of mine life).
Transport Management
The Company will update the Transport Management Plan which will include a risk assessment of the entire transport route to identify high risk areas and mitigation and safety measures to protect drivers and other users of the M3 road.	April 1, 2014
Tailings Management
Carry out a detailed dam break assessment to identify potential risks associated with failure of the facility and incorporate appropriate mitigation into the design. Also, incorporate the recommendations in the Knight Piesold report dated July 2013.	April 30, 2014
Appoint consultants (approved by IFC) to carry out regular and ongoing independent audits of the Tailings Management Area (TMA) at a minimum on a yearly basis to make sure design, construction and operation of this facility follows GIIP.	April 30, 2014 (appoint consultants) and review annually thereafter.
Obtain International Cyanide Management Code (ICMC) Certification for the Project.	Become a signatory of the ICMC Code by April 1, 2015
	Obtain ICMC Certification by June 1, 2017
Security Management Plan
The Company will complete a Security Management Plan in line with PS4 to be implemented at the time of construction and operations that will be in line with the Voluntary Principles on Security and Human Rights. In addition, changes will be needed to their Community Grievance Mechanism to address potential complaints on Security Personal.	April 1, 2014
Biodiversity Management Plan (BMP)
Develop a Biodiversity Management Plan (BMP) in compliance with PS6 to implement the mitigation hierarchy during Project construction and operation to ensure that avoidance, management and mitigation measures are identified and implemented, that disturbed lands restoration combined with an offset strategy is incorporated to achieve No Net Loss, and that a Biodiversity Monitoring and Evaluation Program (BMEP) is developed.	April 30, 2014