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Wednesday, 11 March 2020

OilMin slashes rental fees on gold exploration blocks in a bid to lure investors

Oil Min slashes rental fees on gold exploration blocks in a bid to lure investors: The Oil Ministry will cut rental fees on gold exploration blocks by 80% as it tries to persuade international investors to bid in its upcoming mining tender, the local press reported citing unnamed sources. Investors will pay just EGP 5k per sq km in rental fees, down from the EGP 25k written in the newly-amended Mineral Resources Act. Bidding for the first gold exploration tender since 2017 will open on 15 March for a four-month period, and will cover a 56k sq km area in the Eastern Desert.

The new tender will be the first tender of its kind since amending the Mineral Resources Act, which the government hopes to stimulate investment in the sector. Under the new regulations, gold mine operators will pay the minimum 5% royalty and income tax of 22.5% once production starts.

Several foreign companies have expressed interest in participating in the tender: Canada’s Forbes & Manhattan Group and Franco-Nevada Corporation and US-based giants Newmont Corporation and Barrick Gold recently joined a growing list of potential investors including Centamin, Sprott and Kinross Gold. Aton Resources in February was awarded Egypt’s first new gold exploration license in 15 years, and will explore the Eastern Desert’s Hamama region under a 20-year license.

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