Egypt awards exploration blocks to Centamin, B2Gold, and Barrick Gold

Sukari gold mine, operated by Egypt's Centamin

EGYPT has awarded 82 exploration blocks to 11 companies in an international bid round for mineral exploration, said Reuters which cited the country’s petroleum minister Tarek El Molla said on Thursday.

Among the companies awarded concessions were Centamin, a UK-listed gold producer which already operates the 445,000 ounce a year Sukari gold mine in the country, and Canadian companies B2Gold and Barrick Gold, said the newswire.

In March, Egypt put 56,000 square kilometres of exploration concessions under the hammer as part of an effort to modernise its resources sector. It expected to attract about $1bn in investment in the Eastern Desert concessions of the state-owned Shalateen Mining Company.

“If we found ounces that we could bring to our mill, that would be NPV accretive,” said Martin Horgan, CEO of Centamin, during a conference call in October. Other potential concessions might be able to support a standalone mine, although details were “proprietary”, he said.

Importantly, there was an opportunity to depart from the 50/50 share royalty agreement typical of the oil and gas investment in Egypt that is currently applied to Sukari, he said. Centamin reported interim net income of $74.8m, a 280% increase year-on-year.

Endeavour Mining, a Toronto-listed gold producer and which has Egyptian telecoms entrepreneur-turned-gold bull, Naguib as its largest shareholder via his investment company, La Mancha, was not named as a beneficiary of the exploration block awards in the Reuters article.

However, Sawiris has previously stated his interest. “We are willing to participate in any area that could be promising,” Sawiris told Bloomberg News in February.

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