Egypt has awarded eight new gold and metal mining exploration licences in the Eastern Desert region, as the government moves forward with a plan to attract foreign investment to the sector and unlock vast untapped mineral resources.
The companies that won the licences are Lotus Gold, AKH Gold, Marine Logistics Gold Mining and Ankh Resources. They join an increasing number of miners that have set their eyes on the West African country, such as Barrick Gold (TSX: ABX) (NYSE: GOLD), B2Gold (TSX, NYSE: BTO) and Red Sea Resources.
Despite plentiful reserves and a rich mining history that gave rise to elaborate Pharaonic gold jewellery, Egypt has just one commercial gold mine in operation — Centamin’s (LON: CEY) (TSX: CEE) Sukari mine.
The lack of mining activity was due, in part, to the country’s past system of royalties and profit-sharing agreements. They 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.
Canada’s Aton Resources (TSX-V: AAN) secured a license in early 2020, and the company launched last year an ambitious exploration drilling and development program focused on building Egypt’s second operating gold mine. The country, which links northeast Africa with the Middle East, has targeted $1 billion in new investments in the mining and energy sectors by 2030.
(With files from Reuters)