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Egypt court upholds govt contract with gold producer Centamin

Egypt's gold producer Centamin resumes operations in country's largest mine following court rule to overturn the termination of 2012 government contract

Ahram Online, Wednesday 20 Mar 2013
Centamin Egypt
Centamin Egypt (Photo: AO)
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Egyptian Supreme Administrative Court suspended on Wednesday last year’s verdict that cancelled the contract between the government and global gold producer Centamin.

The court upheld the 2004 contract between the government and Centamin, which operates Egypt's biggest gold mine, Sukari, located in the country’s southeastern desert.

In October 2012, the Australia-based gold-mining firm was ordered to halt its local operations in Egypt due to alleged irregularities in the way Centamin had renewed its contract to exploit the country's largest gold mine.

The 2004 contract gave Centamin Egypt the right to exploit around 160 square kilometres in Sukari. Under the deal, net revenues from the gold mine were split 50-50 between Centamin and the government.

Last week, Centamin released a forecast that annual gold production from its Sukari mine in Egypt would rise by 20 percent to reach 320,000 ounces in the coming year.

The forecast production marks the third consecutive year of growth for the mine's output and is based on a cash operating cost of $700 per ounce, with fuel marked at international prices.

The company targets an output of 450,000 to 500,000 ounces of gold per annum as of 2015 from the Sukari site.

Centamin shares that are listed in London Stock Exchange rose by 1.3 percent on Wednesday’s trading following the verdict. 

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