Source Financial Times, 15 Feb 2009
A mine known to the pharaohs has re-entered service as modern Egypt's only large gold producer.
A papyrus map indicates that the Sukari gold deposit, in Egypt's eastern desert near the Red Sea, was mined during the time of the pharaohs more than 2,000 years ago. Later, the Romans mined gold there, literally scratching the surface of a deposit that modern surveys show to extend deep into the earth.
Centamin, the Aim-listed miner, opened the mine last week. It will produce 200,000 ounces of gold per year as the mine enters its first phase of full-scale development, Josef El-Raghi, chief executive, said during the Mining Indaba conference in Cape Town.
Chris Rollison, analyst at BMO Capital Markets said: "If this resource was anywhere but Egypt, it would have been developed decades ago".
But he said that nationalist economic policies of Gamal Abdel Nasser, Egypt's president from 1956 to 1970, prevented surveyors from using advanced technology to quantify the resource size of Sukari.
Centamin estimates it holds nearly 13m ounces of potentially recoverable gold.
Sami El-Raghy, chairman, and his son Josef, chief executive, are Egyptian-Australians who developed mining industry experience after the elder emigrated to Perth in Western Australia.
They have been developing Sukari since 1999, when Centamin bought the company owning the rights to explore around the Red Sea hills, the only area of the country known to contain the metal.
The Sukari mine enters production as the price of gold starts its fourth week above $900 per ounce, largely on investors' perception – heightened during times of economic turmoil – that it holds better value than paper currency.
The precious metal's scarcity, malleability, and lustre all contribute to its status as a medium of exchange. But the Sukari mine's pharaonic origin is a reminder that gold holds value largely because it has always been perceived to have value – even back to the age of the pyramid-builders.
The company is raising C$60m ($48m). It said in late January it needed additional funding because of adverse movements between the US and Canadian dollarand construction delays at Sukari.
Its share price closed up 3¼p at 54p in London on Friday.