Centamin (LON: CEY) (TSX: CEE) said on Thursday that exploration around its flagship Sukari gold mine in Egypt has allowed it to identify the potential for a satellite open pit within the concession as well as extensions of the underground orebody.
The West Africa-focused gold miner also said it had completed the first airborne geophysical survey in Egypt, which it said was a milestone for the company and the country’s hard rock sector.
“[The] positive drill results have demonstrated the upside potential in the orebody that can support both life of mine extensions and an increase in underground production,” chief executive Martin Horgan said in the update.
The company plans to incorporate drilling completed up to end-June into a mineral resource and reserve update, which is scheduled for completion in the fourth quarter of 2022.
Shares in Centamin jumped on the news and were trading 6% higher at 80.9p in London close to the end of the day.
Sukari, Egypt’s sole gold-exporting mine and the first large-scale modern gold operation in the North African nation, contributes up to $900 million a year to the country’s gross domestic product.
Horgan said the company has made “excellent progress” across its pipeline of projects that offer growth and diversification.
Centamin is advancing a pre-feasibility study for its Doropo gold project, in the northeast of Côte d’Ivoire. Drilling has focused on both converting existing inferred resources to indicated resources and testing newly identified growth targets, it said.
During the second quarter of the year, the miner kicked off exploration field work in Egypt’s Eastern Desert.
Despite bountiful reserves of the precious metal and a rich mining history that supported the making of elaborate Pharaonic jewellery, Egypt’s mineral wealth remains largely under-explored and undeveloped.
The lack of activity was due, in part, to the country’s past system of royalties and profit-sharing agreements, which made it difficult and unprofitable for miners to explore for and exploit minerals.
A legislative overhaul in 2020 eliminated the need for miners to form joint ventures with the Egyptian government. It also limited state royalties to a maximum of 20%.
The country also announced a series of upcoming gold bid rounds, which have so far attracted mining heavyweights as well as juniors.
Other than Centamin, companies that have won concessions in Egypt over the past year include Barrick Gold, B2Gold, Aton Resources, Altus Strategies’ subsidiary AKH Gold, Lotus Gold and Red Sea Resources.