The project, however, doesn’t meet Centamin’s capital allocation standards and the company has decided to explore third-party development options.
“Building a strong active growth pipeline is central to our strategy,” chief executive Martin Horgan said.
“The Batie West project has potential to deliver a profitable mine, but not one that would currently meet our strict investment criteria.”
The company’s stock lost 8.45p in early morning trading, recovering slightly during the day to reach 114.40p around closing time, 5.6% lower than the previous day.
The company had better news regarding its other projects. It said it had approved the start of a pre-feasibility study at Doropo, in the northeast of Ivory Coast, which it believes has “strong development potential”.
Centamin will invest $14 million on advancing the project to pre-feasibility study by mid-2022.
The review, which began in the second half of 2020, also showed potential for the ABC project. Located in northwest Ivory Coast and sitting 460 kilometres west of Doropo, ABC continues to deliver strong priority greenfield target generation along the 60 km Lolosso gold corridor, Centamin said.
The board has approved a further $3 million exploration program for the Kona and FarakoNafana permits for the period to June 2022.
Turning a page
Centamin has proved resilient to recent challenges, beyond those brought by the covid-19 pandemic.
After fending off a takeover attempt by Canada’s Endeavour Mining (TSX:EDV) in early 2020, it appointed a new chief executive officer, Martin Horgan. The hire ended a six-month period without a top boss.
The company went through some major board changes. Those included seeing Josef El-Raghy migrate from executive chairman to chairman, 18 years after becoming managing director.
In October, the miner lowered guidance for 2020 after stability issues at the Sukari’s west wall forced the company to halt mining in the high-grade zone.
By December, the company had figured out a three-year plan for its flagship (and only) operation. The scheme aims to cut costs and boost efficiencies at Sukari, which opened in January 2010.
The operation, which comprises a large open pit and an underground mine, contributes up to $900 million a year to Egypt’s gross domestic product.
Centamin recently posted a significant increase in production during the first three months of the year. This led the company to confirm annual gold production guidance of between 400,000 and 430,000 ounces split equally between the first and second halves of the year.
Egypt has seen an influx of mining investments over the past few months, following drastic changes to regulations.
The northeastern African country has also hosted gold exploration license auctions, which have so far attracted mining heavyweights as well as juniors. Among the companies that have been awarded concessions over the past year are Centamin itself, as well as Barrick Gold, B2Gold, Lotus Gold and Red Sea Resources.
The government has targeted $1 billion in new investments in the mining and energy sectors by 2030.
