Sokary Gold Mine's production targeted to hit 510k-540k ounces in 2020: Centamin Egypt chairman

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Tue, 19 May 2020 - 02:18 GMT

FILE PHOTO: An employee sorts gold bars in the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, December 15, 2017. REUTERS/Leonhard Foeger

FILE PHOTO: An employee sorts gold bars in the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, December 15, 2017. REUTERS/Leonhard Foeger

CAIRO – 19 May 2020: General Manager of Centamin Egypt Youssef al-Raghy told Egypt Today that the size of target production of Sokary Gold Mine in 2020 is 510,000 -540,000 ounces with investments worth $630-$680 per ounce and $870-$920 per sold ounce.

Raghy stated that unnecessary capital expenditure has been temporarily postponed because of COVID-19 crisis. Hence, such expenditure is estimated to become $150-$170 million in 2020 compared to $190 million in the previous year.

The Centamin Egypt chairman pointed out that no infections have been detected at Sokary Gold Mine so far, and that all protective measures are implemented.

Centamin Egypt announced Monday that cash flow generated from gold production in 2019 resulted in $107 million disbursed to Egypt in profit share and royalties.

The company clarified that profit share distribution to Egypt recorded $87.1 million and royalty payments hit $19.7 million.

According to statement, almost $500 million in profit share and royalty payments has been received by Egypt, to date. The company clarified that the amount of gold purchased for Egypt’s favor rose to 25,721 during 2019, up from 26,621 during 2018.

The Mineral Resources Authority gets 55 percent of the Centamin profits from its operations in Sukary Mine after the company recovers the investment costs, and also gets 3 percent royalties, as the company supplies the royalty value to the Mineral Resources Authority twice a year.

The company’s profit after tax increased 13 percent on a year-on-year basis to $172.9 million during 2019.

“On December 31, 2019, the net payable in EGP to the Central Bank of Egypt (CBE) is approximately the equivalent of $30,893 (2018: US$40,618 net receivable owing from CBE,” it stated.

On December 20, 2016, Sukari Gold Mining Company entered into a contract with the CBE. The agreement provides that the parties may elect, on a monthly basis, for the CBE to supply SGM with its local Egyptian currency requirements for that month (to a maximum value of LE 50 million). In return, SGM facilitates the purchase of refined gold bullion for the CBE from SGM’s refiner, Asahi Refining.

This transaction has been entered into as SGM and requires local currency for its operations in Egypt (it receives its revenue for gold sales in US dollars). Some 26 transactions have been entered into at the date of this report, 12 of which in 2020, pursuant to this agreement, according to the agreement.

“On behalf of the board, I would like to thank the Egyptian Mineral Resource Authority (“EMRA”), not only for their support during 2019, but also for the last 10 years in particular, which with their guidance has seen Egypt placed firmly on the map as a country with immense opportunity to become a leading gold producer,” Chief Financial Officer and Executive Director on the board Ross Jerrard.

“We believe that Sukari is the first of several Tier 1 gold assets which will benefit Egypt for generations to come. In addition to employing and training 2,249 Egyptians,” he added.

Established in 2005, Sukari Gold Mining Company is a joint venture between the Australian Centamin Company and the Mineral Resources Authority, based on an agreement between the company and the government in 1994.

Centamin Egypt operates the Sukari Gold Mine, which has reserves estimated at 15.5 million ounces of gold, making it one of the largest gold mines in the world.

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