Mahdia: Truth & Guyana Consequences

By Thom Calandra @ Large

Note: I bought 147,000 shares of Mahdia Gold after scoping out this bizarre situation for myself, on site in Guyana. 

GUYANA SHIELD –Mention the old Omai Mine in Guyana and even veteran brokers, bankers and asset managers say, “But wasn’t that the environmental mess, Cambior-Golden Star or something?"

Or something. Some 17 years after cyanide-tainted slurry spilled from Cambior’s Omai Mine into the Omai River, such is the legacy: the perception.

Facts and on-site inspection show otherwise. The Omai Mine site and its two large ponds are crystal clear and clean enough to swim in. The Guyana courts seven years after the spill happened declined to award any damages to the 20,000 or so people who were living along the Omai and Essequibo rivers.

A technical memo from AMEC Environment & Infrastructure of Ontario is expected to show samples collected from the area’s two main pits and downstream of a former tailings pond are clean. The sampling occurred in February and almost surely will indicate levels that satisfy international and Canadian water standards for toxins that include cyanide, arsenic, cadmium, chromium, lead and mercury.

Mahdia Gold is paying for that surface water sampling report, which is due out this week. I don’t really need to see it because I could drink the standing water at the site. Still, investors in the Omai Mine’s new operator, Mahdia Gold, and other Guyana parties as well, surely will want a look-see.

The Omai mine and its pits have been clean for many years. Less than two weeks after the collapse of Cambior’s tailings dam in August 1995, the Guyana government, along with independent observers, declared nearly all cyanide levels below detection. No one died in the spill; some fish and birds were killed.

Today, the residential areas near the mine and along the water look to my eyes to be populated and industrious: churches, community halls, stores and fleets of taxis.

At the mine itself, Mahdia Gold’s founder, Alan Zaakir, is leading a group of eight investors, engineers, a Canadian politician and a geologist across the property. Mr. Zaakir is a Canadian-Guyanese who says he has political aspirations in his native country. (Photo: Waste rock at Omai – Thom Calandra photo)

He and a group of other Canadians, plus a Reno, Nevada, geologist and a well known stocks trader from Toronto, tried a year ago to draw me to Guyana, where I already had seen one project, Sandspring Resources’ Toroparu copper and gold property, twice in two years. I could not make that trip.

A year later, Mahdia Gold, with the assistance of the Guyana government and local law enforcers, has attained legal control of the former Omai Mine, its barracks, satellite dishes, airstrip, workshops, equipment and 7,240 acres of mineralized property.

Mahdia four months ago ejected hundreds of artisan alluvial miners from the “bone yard,” a pock-marked hillside of laterites that had some squatters yielding 10 ounces of gold a day. “That’s with just 25 percent recovery rates.”

Speaking is Mahdia Gold’s lead geologist and president, David Bending of Nevada. Omai under the stewardship of Cambior, Golden Star and then, acquirer Iamgold, shipped 3.7 million ounces of gold in the 11 years into 2006. “Then it shut,” says 57-year-old Mr. Bending, “and all this stuff, even the junk you see, was what they left.”

Iamgold fled for what it said was a more attractive pasture of minerals in Suriname. “We’re here for the ounces Omai left behind,” says Mr. Zaakir, whose advisers and connections in Guyana include a former president, many ministers and the current prime minister and president.

I see below us a river is bustling with gold dredges, fishing boats and along its edges, commerce. The community of Mahdia, a region of about 3,500 people, is busy with a new hotel, store fronts, churches and schools.

Linden, the nearest official city, has 20,000 people, many hoping the Omai Mine once again becomes the 200,000-ounce-plus yearly gold producer, and 385,000 in a peak year, that it was in the 1990s. (Photo: Mike Wekerle, former Republic of Guyana president Bharrat Jagdeo and Alan Zaakir in Georgetown)


None of this will come easy. Mr. Zaakir, age 47, says he hopes soon to name a new CEO who can accelerate a 12,000-meter exploratory drilling program and begin permitted production of the two waste pits and that bone yard. Iamgold and its predecessors clearly left a footprint on the area, largely hunks of twisted, rusted and rotting hulks of machinery.

Mr. Bending, who has spent much of his career in Guyana and South America, says he believes a Mahdia Gold resource statement by year’s end will show 4 million ounces of gold in the two main pits and surrounding area. One of the pits, he says, is a geochem target that “could be as many as 3 million shallow ounces.”

One hopes so.

Much of the historic assaying at Omai showed disseminated pyrite, lots of stockwork diorite and numerous veins with snuggly high gold grades: 25-meter and greater zones of 8-gram-tonne gold. Mr. Bending and his team must “twin” those results while at the same time choosing to dip their wicks into step-out areas of fresh and untouched mineralization.

The Omai Mine already might have produced 4 million ounces of gold, when adding in artisanal mining over the years. The Omai’s name and stockpiles are cited in numerous academic studies, including one presented in Toronto in March: “Gold In Precambrian Shields” by Marc Bardoux, Graham Pegg & Howard Poulsen.

Now, I am no chaser of existing mines. As some of you know, I prefer fresh investing opportunities: properties in Colombia, Ghana, Cambodia and Nevada that have little or no legacy mining. History, it’s not for me. (Photo: One of the two main pits)

Yet Mr. Bending and Mr. Zaakir’s backers seem intent on twinning most of Cambior’s previous exploratory holes with private-equity cash they are raising this spring at 25-cents a share. (I will not participate but now own shares at approximately 31 cents each – please see note below)

Mahdia Gold (Canada: MGD; USA: MHGPF) and its Guyana Shield gambit have attracted a Canadian politician, John Reynolds of Vancouver, as a co-chairman, plus a coterie of Guyana lawyers and advisers, cabinet ministers, former cabinet ministers, a former president and … well, you get the idea.

Mr. Zaakir, who splits his time between Toronto and Guyana, has used his own money and helped to raise funds for a Georgetown orphanage, for Mahdia area schools and for other youth-oriented programs in this poor nation of just 750,000 people.

This enterprise’s ace in the hole is a strategic investor, Mike Wekerle, a flamboyant Toronto resident known for clever trading strategies that netted him hundreds of millions of dollars when he worked at GMP Securities. Mr. Wekerle says he and two other partners, including a media lobbyist, Paul Sparkes, have launched an asset management firm called Difference Capital Inc. that is based in Toronto.

Mr. Wekerle owns about 9 percent of Mahdia at present. Insider ownership, says Mr. Zaakir, is greater than 30 percent.  Mr. Zaakir notes the Canada-traded MGD shares soon will move to the Toronto venture arm from the so-called CNX exchange.

That’s all for now. I will have more when I return from Portugal (please see note below). Maps, cross sections and other materials can be seen at


-- THOM CALANDRA, March 26, 2012 (Photos by Thom Calandra)

Thom Calandra’s work has appeared in newspapers, newsletters, magazines and across the Web. He is a founder of CBS MarketWatch, now Dow Jones MarketWatch. He also founded Ticker Trax of Canada. His work can be seen at, which is a Torrey Hills Capital property. Thom also writes for Cambridge House Café, the publishing arm of Joe Martin’s Cambridge House conference presenter, and for The Gold Report. Thom supports the Gold Antitrust Action Committee at He and his family live in Tiburon, California.

Thom owns 147,000 shares of Mahdia Gold (MGD) purchased in the open market. His average is approximately 31 cents Canadian per share. Thom received nothing in the way of payment or shares from Mahdia Gold and its supporters. He is currently on his way to see gold and tungsten projects held by Colt Resources in Portugal. In this article, Thom also owns shares of Sandspring Resources (SSP) of Guyana.