Sukari Gold Mine (Photo:Al-Ahram)
Gold mining company Centamin announced on 10 December a takeover of Ampella, an Australian mining company with significant gold assets in Burkina Faso and elsewhere in West Africa.
The value of the transaction is $40.9 million and $0.16 a share. Centamin offered Ampella shareholders one Centamin share for every five Ampella shares. The offer was described as “the most value-enhancing alternative available to Ampella shareholders at the current time” by Ampella’s board of directors.
Centamin has Egypt's largest gold mining operation, the Sukari Gold Mine in the Eastern Desert, which is also the company's flagship operation.
The Sukari project began in 2007, and by mid-2009 the operation was producing gold. The company stopped production in 2012, however, because of disputes with the Egyptian government over diesel fuel supplies and its gold exports. In October of that year, an Egyptian court ruled its rights to the Sukari mine were invalid and ordered operations to a halt.
In March 2013, the Egyptian Supreme Administrative Court suspended the verdict that cancelled the contract between the government and Centamin. Regardless, Centamin’s profit dropped by more than a third in the third quarter of 2013 due to a sharp drop in bullion prices.
The company still maintained it was well-placed to exceed a targeted increase in full-year output. The Sukari gold mine was expected to bring in more than 320,000 ounces in 2013, and increasing to 450,000-500,000 ounces per year by 2015.
2013 Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at just more than $43 million through September, which was slightly lower than some analysts had expected. Centamin is based on the UK-governed island of Jersey and listed on the London Stock Exchange.