By Jon Yeomans
At gold mining company Centamin, they have a motto: “If it was easy, someone else would have done it already.” It’s apt for a business that has built Sukari, one of the world’s biggest gold mines, in a country better known for revolutions and regime change than digging up precious metals.
“Egyptian civilisation has been around 6,000 years, and they’ve been mining all that time,” says Andrew Pardey, the unflappable Australian chief executive of the FTSE 250 company. The problem is, he explains, that Egyptian mining lost its way, as investment faltered and legal uncertainty reigned. “Sukari was mined in pharaonic times and then Roman times. The last of the mining was done by the British before Egypt got independence.”
To hear Pardey tell it, the sands of Egypt are ripe for exploration: he brandishes a treasure map of the eastern Sahara, pockmarked with dots signifying gold deposits identified by the British and others before Nasser led Egypt to its freedom in 1953. As the only miner operating in the country, Centamin is in pole position to exploit these opportunities. “Sukari’s not unique,” he says. “That whole eastern desert, there are similar deposits.”
Sukari is “the only world-class gold mine not in the hands of the majors”, explains Pardey, who joined Centamin in 2008 and took the top job in 2015. “We have a mine life in excess of 20 years. We have no debt and no hedging in place, so with the improvement in the gold price, we see all the benefits of that. Which is unique, compared to our peers.”
In production since 2010, Sukari is about 450 miles south east of Cairo, and has cost $1.1bn (£850m) to build. A trading update last week confirmed the mine is on track to hit its target of 470,000 ounces of gold this year; it has a further 14 million ounces in the ground. Sukari began as an open-pit mine – its vast, stepped sides sink into the ground like an inverse pyramid – to which Centamin has added extensive underground operations: around 45pc of the ounces mined now come from below ground.
Centamin began paying a dividend in 2014. It has been one of the biggest beneficiaries of Brexit, with its share price leaping 47pc to £1.60 on the back of a rise in the price of gold. The metal has climbed 8.4pc since the referendum to $1,362 an ounce as investors seek a safe haven. “The gold price has gone up, and we predominantly deal in US dollars, so it’s positive for us,” says Pardey.
Pardey is sanguine about Brexit’s wider effects on the mining industry. “I don’t think it’s going to have any impact on the large miners, which already have a global spread. And the junior miners, if they’re doing any raisings, they’re generally done outside the UK anyway.”
Pardey, born in Sydney, is a geologist by training. After graduating from university, he sought his fortune in the goldfields of his home country. “Like all geologists you end up in Kalgoorlie for a time, in Western Australia. From there I headed off overseas. I worked for AngloGold Ashanti, a brief time with Guinor Gold [a private explorer in Guinea], then across to Egypt.” On joining Centamin, Pardey was appointed general manager of Sukari, charged with building the mine. The site was chosen, he says, not because it was the best deposit, but because it was close to the water supply of the Red Sea.