Egypt: Altus Strategies aims to accelerate gold exploration, CEO says

By David Whitehouse

Posted on Thursday, 9 June 2022 08:27
The gold producing potential of Egypt's Eastern Desert remains largely unexplored. REUTERS/Amr Abdallah Dalsh

Altus Strategies plans to accelerate its gold exploration strategy in Egypt while considering partnerships to take discoveries towards production, CEO Steven Poulton tells The Africa Report.

Large gold discoveries are on the cards in the next five to ten years in Egypt, Poulton says. Egypt is “the best frontier on the planet for gold exploration.”

Altus is quoted on the London Stock Exchange’s AIM market and Canada’s TSX Venture Exchange. Its strategy focuses on exploration, and Poulton prefers to leave production to partners. Companies which try to do both don’t tend to have the best results, he says.

“Our philosophy is to cover as much ground as possible as quickly as possible. We’d like to make 10 Sukari-type discoveries, not just one.” The Sukari gold mine, the only one in the country in operation, is run by Centamin.

Parts of Egypt fall within the Arabian-Nubian Shield which extends across countries on the Red Sea and contains some of the world’s largest gold deposits. But previous profit-sharing agreements in Egypt acted as a deterrent to exploration activity, leaving gold production lagging behind that in neighbouring Sudan.

Poulton is confident that historic under-exploration is set to end following regulatory reform in 2020. Miners are no longer obliged to form joint ventures with the government, and state royalties are limited to a maximum 20%.­ The changes have prompted a wave of interest from miners including Centamin, Barrick and B2Gold.

  • “There’s some bureaucracy and some things are being done for the first time,” under the new rules, which overall have been working “very smoothly,” Poulton says.

Production Lead Times

Altus has a range of assets in Africa including iron ore and gold discoveries in Cameroon, copper and zinc in Morocco, and copper in Ethiopia. The company, whose shareholders include La Mancha, said in May that sampling in its current four projects in Egypt showed high grade gold prospects. It also won two further gold licenses from the Egyptian Mineral Resource Authority under the country’s second international competitive bid round.

The global average for getting discoveries into production is about ten years, which is longer than it used to be in the late 1990s. That is because there is now a greater tendency to keep drilling a discovered asset to attract more capital, says Poulton, a geologist by training.

Getting Egyptian discoveries to the production stage should be “faster and more straightforward” than in many other places, given that there is little surface cover such as jungle, glacial till and ice. So it may be possible to shorten the lead time from ten to seven years, he says. “Egypt will prove to be one of the faster jurisdictions.”

  • Altus is willing to consider partnerships in Egypt to help finance projects, which partners could at a later stage take over and run with their own manpower, Poulton says.
  • The company has a stream of royalties from projects in Australia, Chile and the Côte d’Ivoire, which reduces the need to raise money.
  • Partnerships are “not driven by a dire need to raise money” and there is no rush to conclude new ones,  Poulton says.

Bottom line

Altus is confident that Egypt’s modernised mining code means that gold exploration in the country is a one-way bet.

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