Member Info for Cowichan

Tuesday 13 / August / 2019

MP Tarek Metwally, a member of Parliament's Industry Committee, announced that he would propose a proposal to Prime Minister Mostafa Madbouly during the fifth session of the parliament to establish a Ministry of Mineral Resources for the good management of its resources.

MP Tarek Metwally said in remarks to "Echo of the country", that Egypt is full of mineral wealth, but there is no optimal exploitation of these wealth to be better managed.

https://www.elbalad.news/3940339

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This would be a good idea for Egypt especially as the mining industry is now governed by a very different set of tax regulations...

Wednesday 14 / August / 2019
President Abdel Fattah El Sisi, President of the Republic, has ratified Law No. 145 of 2019 amending some provisions of the Mineral Resources Law promulgated by Law No. 198 of 2014.

Article (5) The
Prime Minister shall issue a decree amending the provisions of the executive regulation of the decision of the President of the Arab Republic of Egypt by Law No. 198 of 2014 to issue the Mineral Wealth Law in implementation of the provisions of this Law, within a period not exceeding three months from the date of its provisions.

(Article VI)
"This law shall be published in the Official Gazette and shall come into force as of the day following its publication. This law shall be stamped with the seal of the State and shall be enforced as one of its

https://www.dostor.org/2764085

Just so everyone is clear about this — the issue wasn't if Centamin was listed on the TSX (that is the stock exchange where most in North America are able to easily hold/trade/receive dividends in the company, including myself) The issue was/is that we are excluded from the S&P Gold Miners Index.
There are currently 68 gold related companies on this index and Centamin's inclusion on this list would go a long way to help our company gain exposure to new investors. Like I said before the volume of shares Centamin trades in Toronto is dismal — truly 1/1000th of our peers which is just another indication to me the promotional abilities of Buchanan are non-existent... ergo it's time to drop the lot in the toilette

https://www.kitco.com/stocks/tsx.html

This is something I've raised before but it deserves another look.

Perhaps the #1 reason Centamin lags its peers in terms of valuation (please save your comments regarding single source producer, Egypt uncertainty, ongoing court case... this is a separate issue)

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S&P TSX Gold Index consists of 68 precious metal mining companies traded on the Toronto Stock Exchange (TSX). Those companies and their current share prices are listed below: click the link

https://www.kitco.com/stocks/tsx.html

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We are not in the index. We need to be part of the group. Toronto is the market for gold investors (sorry London) Until we appear on this list our trading volumes in Canada will continue to be a 1/1000th of our peers. Please contact Centamin Investor Relations (and the TSX) as I have in regards to this issue and we'll all benefit. Thanks!

Hi Tibbs,
I appreciate Siko's unique perspective concerning Egypt but I think the minutiae of the mining law changes have not been shared to many outside of government.

One person who has an insider's view is Australia's Ambassador to Egypt. Here's a couple of his recent tweets:
'Received a briefing on the new Egyptian mining law from the Chair of the Parliamentary Committee for Industry, Eng. Mohamed Amer. The new law is critical for encouraging investment and creating jobs in the sector.'

https://twitter.com/AusAmbEgy/status/1151436586908815360

'A very positive meeting with Minister for Petroleum and Mineral Resources, Tarek El Mulla, on reforms in the mining sector. Congratulated him on the recent passage of the new mining law and briefed him on Australian expertise in mining.'

https://twitter.com/AusAmbEgy/status/1150768673373794304

Both comments sound quite positive to me — and coming from a guy who's certainly in the know! Cheers.

I'd like to get a look at their data...

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"Egypt is estimated to have some 7 billion ounces of gold ore reserves in about 122 concessions,” the source added.

http://english.ahram.org.eg/News/337604.aspx

...central banks bought a total of 224 tonnes of gold between April and June. Official gold reserves increased by 374.1 tonnes in the first half of the year — “the largest net H1 increase in global gold reserves in our 19-year quarterly data series,” the analysts said in the report.

https://www.kitco.com/news/2019-08-01/World-Gold-Council-Reports-Central-Banks-See-Ravenous-Demand-For-Gold-In-Q2-To-Protect-Against-Looming-Risks.html

Management is focusing on these areas in Quarter 3 2019:

REGIONAL EXPLORATION
Upside potential from the regional surface exploration programme,
including seismic and surface drilling programme at V Shear and Quartz
Ridge.

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You have to go back to August 2011 to find the commencement of drilling at V Shear...

'Regional exploration returned significant intercepts for first pass drilling at the V Shear prospect (approximately 1km north of the Sukari process plant) including 16m @ 3.00g/t from 151m. Follow up programmes are currently being planned....'

It's been at least FIVE years since any drilling has been carried out beyond Sukari proper —now this:

Surface rig arrived on site in Q2, with a
exploration drilling commencing in Q3,
starting with V Shear

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personally I think management has been waiting for Egypt to offer better mining terms - now that the law has changed - BAM! starting to drill again... coincidence? I think not

I hope some of these gold products can eventually succeed. Anything that makes owning gold more accessible to the masses is a positive in my view.

At the U.S. launch, Glint will enable you to save in, exchange between and spend from dollar and gold wallets. And, in time, it will bring foreign currency wallets (already available in Europe), giving the ability to send gold and currencies to anyone with a smartphone as easily and instantly as you might send a text message, and at low to no cost, as well as paying bills. Fees are transparent and simple with a small 0.5% fee when buying or selling gold or spending in foreign currencies. There are no hidden fees, because Glint uses the real inter-bank exchange rate when spending in 150 currencies around the word. There is no fee when making a USD or gold-based purchase in the USA using the Glint Debit Mastercard.

Clay Wilkes, CEO of Galileo, which is powering Glint’s integration with Mastercard in the U.S., said, “We welcome Glint’s innovation in the U.S. market, giving consumers the choice to use gold—rather than dollars—to support everyday financial activities like buying a cup of coffee, paying bills or even getting cash from an ATM. Our robust APIs provide the flexibility for Glint to make gold-based transacting in the U.S. as simple and convenient as using a debit card. Glint identified an untapped opportunity and we’re delighted to work together to deliver a scalable solution that leverages the Mastercard payments network.”

https://glintpay.com/glint/glint-launches-us-today/

Hi Siko,
First, never said YOU posted rumor or speculation. I apologize if that is how my post read.

Second, there are many, many times I have felt blessed to have your input on all things Egypt. In fact it is my sincere wish that you are rewarded for all the time and effort you've made to keep us informed.

Third, I have no insight except what I dig up in the news. Going by that alone I will add this:
a) the new royalty scheme was apparently constructed with the help of global industry insiders based on the best practices in mining jurisdictions like Canada, Australia & USA
b) the royalty scale will be adjusted based on the underlying commodity - as your original link pointed out a salt miner was up in arms with the idea of paying rent plus a yet to be determined royalty rate - until the specific 'executive regulations' are in place THAT salt miner is only 'speculating' on the ultimate royalty rate ie HE is starting a rumor
c) I think it's logical to say that when the executive regulations are finalized we'll see a gold royalty is not the same rate as a salt royalty - just as a dolomite royalty will not be the same rate as black sand, etc.
d) the whole point of the government changing the terms is to be more competitive - if we take the law at face value that will be accomplished

Of course one could argue that this royalty CANNOT be ALL the tax a new miner would pay - it's too cheap compared to Centamin's 50/50 split - unfair even - which is why I personally believe (warning: I am speculating!) Sukari will be renegotiated under the new terms - you don't change the rules for one and not all -

One last thought, remember all the hoopla with the government removing petrol subsidies? It took several years, tons of critical media coverage and push back from everyday Egyptians but it got done.

Wishing you all the best on your visit to Egypt Siko ! Chat later ;-)

1) Royalties typically do not take a % of production - they are essentially a tax on profits
2) A 'tax' over and above the new royalty schedule is indeed NOT mentioned in the new law

Since a restaurant, Uber, travel company etc does not pay a royalty in addition to a standard tax is it not a stretch to say a mining company will pay a standard tax in addition to a royalty?

Oil producers and solar energy providers are also treated differently in terms of revenue paid to the state.

Feel free to ignore my queries but as you have stated in the past you typically refrain from commenting on rumors or speculation.

Wow, that is a harsh assessment.

I would like to know how a royalty system capped at 20% could possibly be worse than a 50/50 profit share for Centamin?

I am aware there has been some criticism from the quarry industry i.e. crushed rock & industrial materials used in construction but that is to be expected any time the system changes.

If you have any news links in regards to Centamin's 'unofficial' response share please post !

If the past is any indication the vocal critics in Egypt are prone to speak out against reforms that benefit foreign investment — which makes your assessment even harder to understand.

(I'm surprised we didn't talk more about this as a group — excerpt from July 18th prelims)

'[Underground] grade was lower than planned partly due to the fact that approximately half of the scheduled underground waste development material mined during the quarter was mineralised above 2g/t and therefore reclassified as ore and processed through the mill.

This positively impacted ore tonnes whilst driving down the average grade.'

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A good 'problem' to have, especially as future plans for the open pit eventually get expanded beyond the current ultimate pit design

Quality, error-free journalism has never been Egypt's strong point...

(reactions to the mining law amendments are sure to be mixed - some even saying the reforms could have gone further - which would be a totally new attitude towards foreign investment in Egypt ! )

Tue, Jul. 16, 2019 Cairo

Although little is known about the draft amendments, which were passed by the cabinet and will soon be out, the announced new clauses attracted different reactions by experts and officials...

According to local media outlets, clauses introduced to the law seek to control the mining process, prevent random drilling and protect the country’s resources from stealing.

Geologist and mining expert Abdel Aal Attiya criticizes one of the amended clauses that allows EMRA to issue licenses for mining materials, navigators, research and exploitation, while stipulating a ratification from the minister or governor or the new Urban Communities Authority. “The draft law should have assigned to a sole authority concerned with regulating the mineral resources, instead of several bodies having the final say on licensing mines, which would hinder investments,” Attiya tells Business Today Egypt...

Minister of Petroleum and Mineral Resources Tarek el-Molla explained to the media that the amendments aim to attract reliable investments, as they seek the separation of exploration process from the utilization stage in a way that promotes the guarantee of state’s rights, and stimulates investment in the mining sector...

Youssef el-Raghy, chairman of Centamin, tells Business Today Egypt. Centamin’s Sukari is the only operating gold mine in Egypt, with its exports representing 2% of Egypt’s total ex- ports. Although Centamin claims it is capable of pumping projects 20 times the size of Sukari mine...

https://www.egypttoday.com/Article/3/72865/Sitting-On-A-Gold-Mine

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( And finally it's refreshing to see some positive chatter about Centamin's role in facilitating the purchases of Egypt's record high gold reserves...)

The country’s reserves and exports of the yellow metal recorded an increase during the first quarters of the current fiscal year. According to Trade Economics, Egypt’s reserves of gold reached an all time high in the second quarter of 2019, hitting 78.60 Tonnes from 78.40 Tonnes in the first quarter of the year. Gold Reserves in Egypt averaged 75.81 Tonnes from 2000 until 2019.

Australian miner sues Egyptian government over collapse of billion-dollar deal

The Australians are seeking compensation in an international tribunal after Egypt, which was a joint partner in the venture, abruptly pulled out of the project in 2015 and sought to strip the company of its right to explore the mine.

Gippsland – which has since morphed into an ASX-listed e-sports outfit Emerge Gaming – is using a clause in an investment agreement signed with Egypt by the Howard government in 2001 to argue the country "breached a variety of obligations with respect to how they conducted themselves", according to the chair of the Australian company.

Mike Rosenstreich chairs Tantalum International Ltd (TIL), the company established by Gippsland to enter into a 50-50 joint venture with the Egyptian government's mining authority, Egyptian Company for Mineral Resources (ECMR).

He says the Australian firm has a "strong legal case" to seek "significant" damages due to what he labels "ridiculous" behaviour by the Egyptian government.

TIL is hoping for the Egyptians to come to the table to avoid a protracted dispute as occurred in the Pakistan case, which took eight years.

TIL has filed initial documents to the tribunal, while the Egyptian government is yet to file materials.

"There's always a way of cleaning these things up quietly and expeditiously for both parties," says Rosenstreich.

https://www.smh.com.au/business/companies/australian-miner-sues-egyptian-government-over-collapse-of-billion-dollar-deal-20190718-p528d7.html

My guess is a very successful attempt to trigger stop loss selling. Poor chap was fleeced!

Strange to see a Canadian seller give away his/her shares today at a 25% discount... who does that?
https://web.tmxmoney.com/quote.php?qm_symbol=CEE