El Dorado, the “Lost City of Gold“, has fascinated and eluded explorers since the days of the Spanish Conquistadors. The story of El Dorado was born through a combination of myths and legends. Dating back to the 1500s, the story originated from the Muisca people who spoke of a golden city hidden in remote South America. The promise of an ancient city of gold enticed European explorers to search for El Dorado for more than two centuries. The geographical location of the mysterious city has morphed along with the myths and legends over the years. Gold coins, precious stones, and streets paved with gold are thought to be located somewhere in Columbia, Venzuela or Guyana.

Sir Walter Raleigh searched for the elusive city in 1595 and reportedly found it. He described El Dorado as a city on Lake Parime far up the Orinoco River in Guyana where “every stone they picked up promised either gold or silver“. The city was actually marked on English maps until its existence was disproved by Alexander von Humboldt during his Latin-America expedition in the early 1800s. Though many have searched and failed to find this city of gold, no evidence of such a place has ever been found.

One TSX listed company, Guyana Goldfields, has certainly not let the failed efforts to find El Dorado prevent them from finding gold in Guyana. The company has been successfully operating in Guyana for 15 years and now boasts a resource estimate of just over 6.6 million ounces of gold from 2 different projects. UBS analyst Dan Rollins likes the company. On July 25th Rollins wrote, “Given the company’s attractive valuation, market capitalization of less than $1 billion, near-term production potential from Aurora and exploration potential at Aranka, we believe Guyana Goldfields could be an acquisition target for an intermediate or mid-cap producer seeking to expand its presence in South America.”

MiningFeeds.com recently connected with Claude Lemasson, President and COO of Guyana Goldfields for an exclusive interview.

The European myth concerning the gold-paved city of El Dorato originated from the Guianas but gold was actually discovered there years later in the 1840s. Please tell our readers about your gold assets and the geology.

Guyana Goldfields has been operating in Guyana since 1996 and has established a second office in the capital of Georgetown. Throughout the years of operating in the country, we have been able to significantly grow the land position and have accumulated over 417,000 acres. Our main groups of properties are called Aurora, where the Aurora Gold Project can be found with a total measured & indicated resource of 5.34M ounces of gold, and Aranka, where we discovered our newest property called Sulphur Rose hosting an initial gold inferred resource of 460,000 oz. The Aurora Gold Project is currently in the pre-development stage with construction and development slated to begin in the first quarter of 2012. Aurora is comprised of 3 main zones called Rory’s Knoll, Mad Kiss and Aleck Hill. Rory’s Knoll has disseminated pyrite and gold mineralization associated with intense silica-fuchsite-sericite-carbonate alteration found in a tonalite intrusive while the 2 other zones are mesothermal gold veins hosted in the shear zones of metavolcanic and metasedimentary rocks.

What are the current mining policies and regulations in Guyana and what does the royalty or fee structure look like?

We are currently in discussion with Guyana’s government on developing a Mineral Agreement in order to obtain the final Mining License or Permit to operate and build the Aurora Gold Project. Earlier this year the government decreased its Corporate Tax from 35% to 30% for all large foreign mining companies to further attract investment into the country. Historically the royalty was at 5% and we are negotiating the royalty and other terms within the Mineral Agreement. We hope to conclude these discussions very shortly.

It has been reported that a new mining policy is needed in Guyana which takes into account the indigenous Amerindians which represent 7% of the population – what is your take on this situation?

This policy does not effect us as it only effects areas where indigenous Amerindians are located. We do not have any indigenous populations nearby and are developing projects where indigenous Amerindians not located.

You have an advanced project in Guyana, the Aurora project, with a NI 43-101 resource estimate of just over 6.7 million ounce of gold. When do you expect to reach production and estimated costs of production, and what additional hurdles do you have to overcome?

First commercial gold production at the Aurora Gold Project is targeted for the first quarter of 2014, producing an average of 300,000 oz/yr. The current mine plan is a combination of open pit and underground mining for the first 9 years with an average output of approximately 9,500 tpd and approximately 4,400 tpd for years 10-17 from underground feed only. Total mine life is 17 years with operating cash costs in the lower quartile of all producing gold mines at ~US$420/oz. Total planned production is over 4+ million ounces with the resource currently known to date. Exploration drilling continues on geophysic targets within the vast land package that has largely been unexplored.

You are also developing a secondary project, the Aranka project, please tell us about this project.

At the Aranka Properties, currently in advanced staged exploration, drilling of highly prospective targets is ongoing. The Company discovered a new gold zone at Sulphur Rose in early 2010 and identified an initial inferred resource of 460,000 ounces in December 2010.  A revised resource estimate will be issued in the fourth quarter of 2011 to take into effect infill drilling conducted earlier this year. We will continue to explore this region and surrounding areas within Aranka.

Have you developed any strategic partnerships to help advance your projects?

We have been partnered with The International Finance Corporation (IFC) of the World Bank Group since 2006 and are following recognized international standards. The IFC is currently the third largest shareholder at 6.3% ownership. We’ve received support from the IFC on our Environmental and Social Impact Assessment work and they have mentioned an interest in potential future financial assistance.

This interview is featured in the article 10 Most Interesting Gold Stocks – CLICK HERE – to read more.