Wednesday, April 23, 2014

MENA Mining (vii): Egypt-1

This post was originally published July 25, 2011

MENA Mining (vii): Egypt-1

In these posts I will not touch any political events and associated risks, rather will try to give an outline of Egypt’s mining industry. A comprehensive report on Egypt and its economy is provided by the Alexander Nubia company on their Webpage Investing in Egypt - commissioned by Alexander Nubia International Inc. and produced by Steven's & Company.
Due to its rather attractive geology, mining in Egypt has a long history – more than 6,000 years -- and various metals were mined: gold, copper and iron. There were many gold mines around Egypt and in Nubia. A good overview of ancient Egypt mining is presented on this page. (This detailed geologic map can be downloaded from this source (big file)
  There was a considerable slowdown in Egypt’s mining industry after the 1952 revolution till late 80ies. After that, crude oil and natural gas alongside with marble and construction material from quarries were the first to emerge as mining priorities. However, most of country's vast resources are still not developed: iron ore, phosphates, manganese, limestone, gypsum, talc, asbestos, lead, zinc. Just these numbers give a general feeling of  opportunities: among the list of Egypt’s resources are: about 50 million tons of coal, 48 million tons of tantalite (4th largest in the world), an estimated 6.7 million ounces of gold in the Eastern desert. Over the period from the fiscal year of 1999-2000 to 2009-2010, a total of 176 petroleum agreements and amendments were inked. As foreign companies started operations in oil and gas, a rather slow process of non-hydrocarbons mining started. However, this process is not fast-paced, and one of the main stalling issues is the mining policy, as the Government tried to copy oil & gas business model to conventional mining with profit-sharing law. Here is how one of the companies explains their business arrangement:
  Source: SMW GOLD

The Egyptian Mineral Resources Authority (EMRA), is one of the oldest in the world and the first to be established in 1896 in Africa and Middle East,. Its mission is to geologically map the country and to discover; explore and assess its mineral wealth.
Its activities are:
·                  Licensing of exploration and exploitation activities
·                  Promotion of invest in mineral commodities
·                  Exploration and assessment
·                  Surveying and geological mapping
·                  Geophysical studies
·                  Shallow Drilling and well logging
·                  Natural and environmental Studies
·                  Training programs
·                  Publishing

A local Egyptian search engine dalili lists 50 mining companies, most of them located in the Northern part.

 Here is a brief overview of major activities.
There are 95 known small gold deposits and occurrences of gold-quartz formation, confined to the Precambrian basement, the Nubian-Arabian shield. Reserves for some deposits reach 0.15-1.2 tons of gold with 11 - 29 grams per metric ton (g/ t). After extremely long dormant period gold mining in Egypt accelerated at a very fast tempo. According to Egyptian government domestic gold production in 2010 amounted to 300,000 ounces, as compared to 1,000 ounces in 2009. The ministry has drafted a mining map locating 120 gold mines it believes were used by the pharaohs – these are slated to be proposed to foreign firms.

A very good resource for these interested in gold is, which I consider one of the best. 

The largest exploited gold deposit is now the SukariHere is how the Sukari project is represented by 24hGold:

Total production of Sukari integrated plant at Mubarak complex for the production of gold, silver and copper, since startup in January 2010 until 2nd of October 2010, is about 3.4 tons, and according to the production plan, it’s expected to produce about 5-6 tons of gold from Al Sukkari mine during 2010, which exceeds what was produced in Egypt over the last century (7 tons).
The other project is Hemsh mine at the Eastern Desert, which witnessed production of the first gold bar in April 2007 after a halt of more than 50 years. Gold regular commercial production, since its start up, in January 2008 till 2010 reached about 100 kilograms.

 The biggest and most known company that operates in gold sector is Centamin Egypt Limited (LSE: CEY, TSX: CEE).

These two documents describe  latest developments:

Alexander Nubia International Inc(AAN - TSX Venture) is another gold miner, developing their flagship Abu Marawat project in the Eastern Desert. While detailed information on the project is available on the company’s page, those interested may download from SEDAR REVISED TECHNICAL REPORT ON THE ABU MARAWAT CONCESSION, PREPARED FOR ALEXANDER NUBIA INC. EGYPT– that besides detailed technical information has these exploration cost tables:

 Nuinsco Resources Limited  (TSX:NWI)- is another Canadian company actively involved in gold mining. Since January 2009, it is developing two projects are: Umm Samra gold Concession Area located in the Eastern Desert of Egypt (790 sq. km - 7 gold occurrences) and Bukari. Both are adjacent to Sukari Gold Mine. Details explanation is in the corporate presentation. It is worth to note that company’s effort in the Middle east was so successful, that it is now in the process of establishing a spin-off company  NuMENA Minerals Corp., that will be involved in acquisition and exploration mineral projects in the MENA region

A small Russian mining exploration company SMW Gold is involved in exploration of gold deposits in the districts of Fawakhir, El Sid, Atalla, El Urf and several others in the Eastern Desert. corporate presentation explains in details its activities.

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