Centamin kickstarts Egypt gold exploration after Govt. talks over 19 licences progress

Sukari gold mine, operated by Egypt's Centamin

CENTAMIN would begin looking for gold in Egypt after discussions with the country’s government regarding 19 licences it awarded last year progressed.

In March 2020, the Egyptian government put 56,000km2 of exploration concessions under the hammer as part of an effort to modernise its resources sector.

Centamin was awarded 3,000km2 of this property.

“We will get working in the second half of the year,” said Martin Horgan, CEO of Centamin during the presentation of the UK-listed firm’s second quarter production numbers. “We now have a route map to move forward.”

Horgan said gold mines developed from newly released government prospects would be subject to a “standard” fiscal regime of a 5% royalty and 28% corporate tax as well as a 15% free carry (or net profit interest). Currently, Centamin has a 50:50 profit share over its Sukari mine in Egypt with the government.

Separate discussions would be held with the government in the event Centamin discovered economically accessible gold at a satellite site of Sukari, said Horgan.

It is notable that for a company that has had outstanding success with Sukari, Centamin has been unable to build upon it.

Centamin maintained full year gold production guidance of 400,000 to 430,000 ounces following second quarter production of 100,228 oz

All-in sustaining costs (AISC) have been guided to $1,150 to 1,250/oz sold which compares to the second quarter AISC of $1,290/oz.

The company generated $177.5m from gold sales of 97,229 oz at an average realised gold price of $1,822/oz sold. Centamin does not hedge gold.

The performance provides further evidence that Sukari had been “re-set” following a difficult period in which production targets were missed.

Currently, Sukari has a 12-year life of mine with a proven and probable gold reserve content of five million ounces as of December 31. This compares to seven million ounces 18 months previously.

The firm’s exploration budget was increased to $17m from $5m previously following “… positive strategic review of the company’s West African portfolio”, it said.

Centamin announced in May that it was “… to progress its Doporo project in Côte d’Ivoire after a preliminary assessment said its mineral prospects could support $275m in investment.

A preliminary economic assessment of Doporo implied a 13 year life of mine producing average annual gold of 207,800 oz for the first five years, and 150,959 oz over the life of mine. The prospect contains a total of two million ounces at an average all-in sustaining cost of $904/oz.

The prefeasibilty stage would be completed by mid-2022 at a cost of $14m with a definitive feasibility study due t be completed in mid-2023, although there was also scope to adjust these time lines, said Horgan.

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