Egypt’s Ministry of Petroleum and Mineral Resources revealed on Tuesday the discovery of a gold deposit with estimated resources of 1 million ounces.
The asset was found in the mineral-rich Eastern Desert, on a mining concession run by state-owned Shalateen Mining Company, Ahram Online reports.
The government did not provide details on the methodology used to determine the deposit’s size. If it were to produce 1 million ounces, it would be worth about $1.8 billion at today’s prices.
It did note it expected more than $1 billion in investments related to the development of the deposit over the next 10 years.
It also said that Shalateen and the state regulator, the Egyptian Mineral Resources Authority, would form a new company to develop the deposit.
Egypt has been trying to lure foreign investors to its mining sector with new regulations introduced earlier this year. They eliminated the need for miners to form joint ventures with the Egyptian government and limited state royalties to a maximum of 20%.
Before today’s announcement, the country had set a goal of attracting $375 million in the next two years. Direct investments, in turn, were expected to rise from $700 million to $1 billion by 2030.
Canada’s Aton Resources (TSX-V: AAN) secured a gold mining license in the country in February. It was the second permit issued in Egypt since 2005, when Centamin (LON:CEY) (TSX:CEE) — the country’s main gold producer — was granted its license for the Sukari mine.
A month later, Cairo began auctioning 56,000 square kilometres of exploration concessions in the Eastern Desert.
It recently extended the auction’s original July deadline to September 15 due to delays caused by the coronavirus pandemic and to extend the opportunity to more potential bidders.
Unlike Egypt’s natural gas sector, the country’s mineral wealth remains largely under-explored and undeveloped.
The lack of activity was due, in part, to Egypt’s past system of royalties and profit-sharing agreements. They made it difficult and unprofitable for miners to explore for and exploit minerals.