Resolute turns eye to Egypt

PERTH (miningweekly.com) – Gold miner Resolute Mining has been awarded two large scale exploration concessions in Egypt, advancing the company’s strategy of building a portfolio of exploration and development assets in highly prospective regions.

“We are pleased to have been successful in our application for these large-scale exploration concessions in Egypt,” said Resolute MD and CEO John Welborn.

“We are eager to secure new high-quality exploration assets on the African continent that provide the opportunity to discover and develop future gold mines. The Bokari and Um Samra concessions fit our criteria of exploration tenure within well-endowed gold belts that have potential to yield large mineable deposits.”

The Bokari and Um Samra concessions cover 1 583 km² and 819 km², respectively, and are located some 70 km and 100 km from the Sukari gold mine, operated by London-based Centamin.

Both the concessions contain extensive artisanal workings, but have not been subject to significant modern exploration work.

While Resolute was optimistic about the new tenures, the miner warned that it would have to negotiate "appropriate fiscal terms" with the Egyptian government before any development work could be considered at either project.

Egypt has adopted a production sharing agreement (PSA), under which the concession holder would pay the government a production share, in addition to a royalty.

Centamin had previously taken the decision not to participate in the bid process for the two concessions on the basis that the PSA terms were not commercial, with the Sukari mine currently operating under a cost recovery model, rather than the PSA.

Resolute said on Thursday that the company was committed to working with the Egyptian government towards establishing a set of terms that would meet the needs of both parties. The company noted that the current PSA model posed "significant challenges" for gold miners, adding that it limited the potential for the successful development of gold mines.