TORONTO, Sept. 9, 2011 /CNW/ - Guyana Goldfields Inc. (TSX: GUY) ("GGI" or "the Company") is pleased to provide an update in 3 key areas on its 100% owned Aurora Gold Project in Guyana, South America:

• Definitive Feasibility Study - On-Track for December 2011
• Resource Estimate - Confirms Measured & Indicated Resource with improved modeling
• Drilling at depth at Rory's Knoll - Releasing spectacular results on extension at depth

Definitive Feasibility Study

GGI reports that the definitive Feasibility Study work for the Aurora Gold Project is on track for delivery of results and key highlights as planned by the end of the calendar fourth quarter of 2011.

The definitive Feasibility Study ("FS") work led by GGI Staff is aggressively continuing with technical work advancing well in all disciplines. The following main areas are being managed and supported as follows:

• Overall Coordination of DFS - GGI
• Off-site and On-site Infrastructure - GGI
• Resource Estimation, Open Pit and Underground Design and Engineering - SRK (Toronto)
• Underground Mine Shaft & Infrastructure - DMC "Dynatec" (Toronto)
• Processing (Crushing & Milling) - Ausenco (Montreal)
• Tailings, Water Management and River Dyke - AMEC (Mississauga)
• Hydro-Power - MWH (Argentina)

As the work is progressing, the Feasibility Study team has now locked in some key parameters:

• Open Pit Mining is expected to include 6 pits within a square mile, with bottom depths varying from 70 to 315 metres; the average strip ratio is expected to be between 9 and 10 to 1
• Underground Mining will concentrate on Rory's Knoll with access via a shaft and a main ramp from surface, to allow production from several mining areas concurrently, but will also include mining from underground satellite deposits via small ramps below the pits at Aleck Hill, Mad Kiss and East Walcott Hill
• The Mine Shaft will be approximately 1,200 metres deep, and mining will be done to approximately 1,300 metres deep
• Milling will be through a SAG mill and Ball mill combination with design throughput of 9,500 tonnes per day (increased from previous 8,000 tonnes per day in the Preliminary Assessment of August 2009); design is well advanced with ongoing work currently being focussed on optimization of the grinding circuit and the tailings disposal system and acquiring vendor quotations for the various plant components, including long-lead items
• Power will be provided from On-site Diesel Power Generators, as the base case for the FS
• An alternative source of power is a hydro-electric power project within 10 km of the mill that would have the capacity to replace a significant amount of the power required for the mine; a feasibility study on the hydro-project has been completed, indicating a positive economic and technical scenario; this is under review and will be included as an alternative in the FS
• The design of important components of site infrastructure such as the airstrip, personnel accommodations and power plant are sufficiently advanced to allow detailed design to be completed rapidly and construction to commence shortly after the Feasibility Study has been completed  and project has been approved
• Construction of certain critical off-site infrastructure facilities such as the access road and the Buckhall port and transfer facilities is well advanced
• Capital costs work will be completed in the final stages of the Feasibility Study, however early indications show that there will be escalation, particularly in the areas of steel, major equipment, fuel and shipping which will be included in the Feasibility Study. Due to the expansion of the underground, GGI anticipates undertaking the underground development at an earlier stage than previously planned which will require a larger initial Capex improving the net present value and internal rate of return on the project.

The Company has concluded its assessment on including Sulphur Rose and its initial inferred gold resource of 460,400 ounces (see press release dated December 31, 2010) into the Aurora Feasibility Study. Due to its difference in grade compared to Aurora, the stage of development of the discovery and the distance between the sites, the Sulphur Rose deposit will not be included with Aurora. GGI expects to grow Sulphur Rose and potentially combine it with other nearby discoveries within the Aranka properties. A revised resource estimate is expected to be completed for Sulphur Rose in the calendar fourth quarter of 2011 after which a Preliminary Assessment will be conducted for a stand-alone operation.

Another important requirement for the Aurora Project is obtaining the Mining License. GGI has conducted extensive negotiations with the Guyanese Government on the fiscal terms to be included in a Mineral Agreement. Such Mineral Agreement is a key requirement to obtaining the Mining License and we anticipate obtaining it in order to build and operate the Aurora Gold Project by year-end.

Resource Estimate for the FS

GGI reports a revised mineral resource statement for the Aurora Gold Project. This new estimate includes all drilling completed to the end of May 2011. The estimate was prepared by SRK Consulting (Canada), Inc. ("SRK") of Toronto, Ontario in accordance with National Instrument 43-101 ("NI 43-101") and provides an update to SRK's previous resource estimate issued earlier this year (see press release dated February 28, 2011).

The Feasibility Study is scheduled for completion at the end of the calendar fourth quarter of this year and will be based on the measured and indicated categories of this revised resource estimate. The main purpose of drilling for the first half of 2011 was to consolidate and strengthen the resource model as part of the Feasibility Study efforts as well as better define the known mineralization to allow the development of a solid mine plan for the Aurora Gold Project.

Highlights include 5.71 million ounces in the Measured & Indicated categories, including about 2.2 million ounces for the Open Pit and 3.5 million ounces for the Underground; and confirmation of the high grade nature of the Open Pit material at over 3 grams per tonne. A total of 1.17 million ounces in the Inferred category have been identified but will not be included in the Feasibility Study as per NI 43-101 regulations (Table 1).

Table 1: Resource Estimate

Note: The following references are made: Open pit = O/P; Underground = U/G

Between January and June 2011, GGI drilled an additional 163 core boreholes throughout the Aurora deposit, the majority targeting existing auriferous zones as infill with the objective of improving the confidence in the geological continuity of the gold mineralization.

Structural geology investigations, geological modeling and information from the infill drilling completed during the period, support a better definition of the structures hosting the gold mineralization within all the gold mineralized zones, and consequently improve the confidence in the geological continuity of the gold mineralization.

As a result of new drilling at Rory's Knoll and the improved understanding of gold mineralization continuity, the geological model for Rory's Knoll was revised. Several previously modeled internal waste zones inside Rory's Knoll were removed except geologically continuous waste zones that were remodeled and excluded from the resource model to support more confident mine planning. As a result of these enhancements to the geological model, size increases to the Rory's Knoll zone have been limited and its average grade was reduced slightly in the September 2011 resource model.

Limited deep drilling at Rory's Knoll however confirms the continuity of the gold mineralization to a depth of 1,550 metres below the surface and support vertically extending the mineral resources by over 200 metres.  Compared to the February 2011 resource statement, total reported Measured and Indicated tonnes at Rory's Knoll increased from 34.79Mt to 36.38Mt at a slight reduction in grade from 3.97 g/t Au to 3.79 g/t Au.

Infill drilling completed on the other auriferous zones (Aleck Hill, Mad Kiss and Walcott Hill termed the "satellite deposits") prompted revision to the geological interpretation. The boundaries of the gold mineralization were revised to take into account of the revised geological interpretation, thereby improving the confidence in the continuity of the gold mineralization. Previously poorly defined and new auriferous structures were intersected by the new drilling information. Compared to February 2011 resource statement, total reported Measured and Indicated tonnes within the satellite deposits increases from 7.38Mt to 10.66Mt at an increased grade from 3.79 g/t Au to 3.82 g/t Au.

"We are pleased by the improvement in the overall quality of the mineral resources in preparation for the Feasibility Study. The additional drilling has improved our confidence in the geological continuity of the mineralization. We are also continuing off-site infrastructure construction activities and will be in a position to start the mine development in the calendar first quarter of 2012 after the completion of the Feasibility Study. We remain very confident that this already robust project will move to development and soon join the ranks of world-class producing gold mines." said Mr. Claude Lemasson, President & Chief Operating Officer.

Mineral Resource Drilling Data

The updated mineral resource statement incorporates drilling data consisting of:

• Drilling for the February 2011 Resource Estimate totaling 209,000 metres of drilling in 776 holes with drilling data up to November 21, 2010.
• New infill drilling from November 22, 2010 up to the end of May 2011 totaling 82,556 metres of drilling in 163 holes.
• The new mineral resource statement contains a total of 291,556 metres of drilling in 939 holes.

Figure 1 shows the Measured & Indicated resource model blocks within the Aurora Gold Project which will be in the Feasibility Study. The image incorporates all drilling up to the end of May 2011 and assay results received by mid-August 2011.

http://files.newswire.ca/826/Figure_1.pdf

Drill hole assay results received prior to April 15, 2011 were issued in a previous press release (dated May 3, 2011). The complete assay results received between April 15, 2011 and September 3, 2011 for the one hundred and forty-one (141) new drill holes are tabulated in the attached intercept spreadsheets 1 and 2.

*Please note that highlighted information in Spreadsheet 2 is not included in the Feasibility Study.

http://files.newswire.ca/826/Spreadsheet_1.pdf

http://files.newswire.ca/826/Spreadsheet_2.pdf

Mineral Inventory

The revised resource estimate is based on a mineral inventory. Table 2 below summarizes the global tonnes and grade estimates in the block model constructed by SRK at various cut-off grades. It is to be noted that the figures presented in the following table should not be misconstrued with the mineral resource statement presented in Table 2. They are presented only to illustrate the sensitivity of the global tonnes and grade estimates to the selected cut-off grades.

Table 2: Global Tonnage and Grade Sensitivities

Note: COG references cut off grade; selected cut off grades are shown.
The reader is cautioned that the numbers presented in the table above should not be misconstrued with the mineral resource statement. They are presented only to show the sensitivity of the global quantity and grade estimates to the selection of cut-off grades.

Drilling at Depth at Rory's Knoll

At Rory's Knoll, where known mineralization previously went to a depth of 1,566 metres below surface (see press release dated May 3, 2011), results for Mother-Hole RKD-163 shows the mineralization extends to a depth of 2,100 metres and remains open.

RKD-163, a second mother hole for deep drilling, was stopped at 2,112 metres in mineralized tonalite and confirms the continuity of mineralization at Rory's Knoll to 2,100 metres and still remains open at depth. The new drilling depth extended the mineralization model approximately 530 metres below the known mineralization boundary.

• Mother-Hole RKD-163
  • 1,248 m @ 2.33 g/t Au from 815 m, including:
    • 64 m @ 5.07 g/t Au from 1,645 m
    • 80 m @ 5.02 g/t Au from 1,725 m
    • 124 m @ 6.15 g/t Au from 1,939 m
    • 20 m @ 10.80 g/t Au from 1,983 m
    • 32 m @ 10.03 g/t Au from 2,007 m

A 2D model of Rory's Knoll is shown in Figure 2 showcasing the new down dip mineralized extension to a depth of 2,100 m.

http://files.newswire.ca/826/Figure_2.pdf

Exploration drilling within the Golden Square Mile restarted in June 2011 with 5 rigs and will continue for the rest of the year. Any additional resources identified post the May cut-off may not be included in the Feasibility Study, however will be incorporated in an updated resource estimate in the future.

Dan Noone, Vice-President, Exploration states, "We are very delighted that we have extended the mineralization by 530m. In the current resource, an average of 300,000 ounces is added for every vertical 100 metres. This augurs well for adding more ounces at Rory's Knoll as well as at depth elsewhere within the Golden Square Mile and we are confident that we will continue achieving exploration success."

The Aurora deep drilling program is being carried out under the direction of Mr. Niel Silvio (Aus.IMM), a qualified person within the meaning of National Instrument 43-101. Mr. Silvio has reviewed the contents of this news release. Drill core samples were sent to and prepared at ACME Analytical Laboratories Ltd (ACME Lab) in Georgetown, Guyana, while assaying was done at ACME Lab in Santiago, Chile and Vancouver, Canada using FA-AAS with Fire-Assay gravimetric finish for samples with > 3,000 ppb Au.

The revised resource estimate was prepared by SRK resource estimation specialists Dorota El-Rassi P.Eng (APEO #100012348) and Glen Cole, P.Geo (APGO #1416) who are the independent "Qualified Persons" for the Purposes of NI 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and confirm that they have reviewed the information contained within this release.

About SRK Consulting

SRK Consulting is an independent, international consulting practice that provides focused advice and solutions to clients, mainly from earth and water resource industries. The SRK Group comprises over 1,000 professionals in 36 offices worldwide, offering expertise in a wide range of resource engineering disciplines.  The SRK Group's independence is ensured by the fact that it holds no equity in any project and that its ownership rests solely with its staff. This permits SRK to provide its clients with conflict-free and objective recommendations on crucial judgment issues. SRK has a demonstrated track record in undertaking independent assessments of Mineral Resources and Mineral Reserves, project evaluations and audits, technical reports and independent feasibility evaluations to bankable standards on behalf of exploration and mining companies and financial institutions worldwide.

About Guyana Goldfields Inc.

Guyana Goldfields Inc. is a Canadian based mineral exploration company primarily focused on the exploration and development of gold deposits in Guyana, South America where the Company has operated since 1996.  The Company is currently undertaking drilling and studies to advance and develop the Aurora Gold Project in Guyana.

At the Aranka Properties, currently in advanced staged exploration, drilling of highly prospective targets is ongoing. The Company discovered a gold deposit at Sulphur Rose containing an initial inferred resource of 460,400 oz and plans to release an updated resource estimate in the fourth quarter of 2011.  As at the date hereof, the Company has approximately $49 million in cash and short-term bank guaranteed investment certificates and no debt; there are approximately 83 million shares issued and outstanding.

Forward Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties.  These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Guyana, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of resource and reserve estimates, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk.  Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.