Centamin propels modern mining rules in Egypt
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“You had all this untapped geological potential available, but the old-style oil and gas concessions didn’t really work,” Horgan said on Wednesday at the Future Minerals Forum. “We’ve been negotiating the final details to a new royalty, taxation, free-carry model, basically bringing Egypt in line with pretty much the rest of the world.”
Centamin is investing in Egypt as wider interest in the Nubian Shield straddling the Red Sea gathers pace following neighbour Saudi Arabia’s third annual conference on developing an exploration super region stretching from Africa to Asia. Sukari, south of Luxor between the Nile and the Red Sea, has produced more than 5 million oz. of gold since it started production in 2009. Artisanal output dates from 2,500 BC.
Egypt’s current mining regulation was based on profit sharing with the government. The proposed law is to be a 5% royalty, a 22.5% tax rate and a 15% government free-carry stake. Over the life of a project, returns to the company and the state are about equal, Horgan said.
“Where we ended up is not quite as good as Western Australia or Canada, about the same as Côte d’Ivoire, and probably a bit better than Ghana,” Horgan said.
Grid savings
Centamin, which spent some $750 million over the past four years to improve efficiency at Sukari, Egypt’s only modern gold mine, plans to connect to the country’s electrical grid and company solar panels this year, alone cutting $41 million a year in diesel costs.
It wants to expand Sukari with nearby discoveries. It is exploring 3,000 sq. km in the eastern desert area near the mine. It’s budgeting 15,000 metres of reverse circulation drilling for the new area, metallurgical testing, a conceptual resource estimate and an optimization study to steer drilling.
It posted first results Jan. 9 showing 46 metres grading 3.3 grams gold per tonne from 91 metres down drill hole LSRC030 and 77 metres at 1.84 grams from 44 metres depth in drill hole LSRC012 at the Little Sukari prospect28 km west of the Sukari mine.
At the Umm Majal prospect 23 km west of the mine, drill hole UMRC006 cut 18 metres grading 2.33 grams from 21 metres depth and drill hole UMRC003 returned 15 metres at 1.46 grams from 4 metres down.
“Pretty happy with the first-pass results, good widths, grades,” Horgan said. “Depending on how that continues to develop from here, clearly we want to see the potential for a satellite feed to be sort of augmenting the Sukari abilities.”
Sukari, with a projected mine life to 2035, holds 194 million proven and probable tonnes grading 1.23 grams per tonne for 7.7 million oz. of contained gold, the company said last month. The mine also holds 392 million measured and indicated tonnes at 1.06 grams per tonne for 13.4 million oz. of contained gold.
Côte d’Ivoire
Centamin is advancing the Doropo gold project in Côte d’Ivoire to a feasibility study by mid-year. It might produce 200,000 oz. a year over a decade after $400 million in construction costs, Horgan said.
The company is poised to invest in a new project that could be exploration, developing or producing, somewhere in Africa or the Middle East in or near the London time zone, Horgan said. It was visiting the Saudi Arabia forum on a fact-finding mission, he said. Outside of Egypt, any project would likely have a gold component, he said.
“There’s obviously lots of potential here, lots of ground that is to be explored. We think we’ve got the skill set, the knowledge and the financial wherewithal to be able to do that so we’re here to look at opportunity.”
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