By Peter @Newton Bell, September 29, 2016

In my first article on Aton Resources (TSXV: AAN), I introduced the company’s Abu Marawat concession and described how evidence of rich historical mining activity guides their exploration activities today. This second article will tell you more about their ongoing activities at the Abu Marawat deposit and the Hamama project, which are marked in the northern section of the map below. Stay tuned for a third article that discusses challenges facing the company.  

A map showing some of the major mines and known gold deposits in the Arabian-Nubian Shield.

Mark Campbell, the CEO of Aton Resources, is based in Cairo and is leading an aggressive exploration campaign in one of the world’s last, great, under-explored areas of gold mineralization: The Arabian-Nubian Shield. His goal is to find Africa’s next big gold deposit. Campbell believes that Aton’s 768 sq. km. Abu Marawat concession has the potential, itself, to become a mining district. With the great mineral wealth found in the Arabian-Nubian Shield in ancient and modern times, the company is certainly looking in the right place.

Despite the rich history of mining on Aton’s concession, it remains largely untouched by modern exploration techniques. Aton is currently running a remote sensing and spectral imaging campaign to get a better sense of what is out there. The results of this high-tech exploration campaign will help Aton prioritize the large number of targets that exist within the 40km gold trend that runs across the Abu Marawat concession from the Hamama project in the west to the Abu Marawat gold deposit in the east.

A map showing the deposits, exploration targets, and historical mine sites in the Abu Marawat concession.

Aton has the potential to become an exploration machine, producing large amounts of exploration news year-round on a variety of targets at low cost. They can use conventional drilling activities to advance particular deposits towards development and production, use high-tech exploration activities to survey their entire property, and use low-tech exploration activities to advance brown-field targets. As they advance several exploration campaigns that each use different exploration methods, they may reframe their concession as a mining district with the potential for several economic mineral deposits.

A picture of channel sampling activity on Aton’s Abu Marawat concession. 

It is unique to have such a large concession with so many targets, such little prior exploration, and such low operating costs. I think that all of this good stuff is the reason Mr. Campbell calls the Abu Marawat concession a "geological Disneyland".

Sir Bakis, a historical British mine on Aton’s Abu Marawat concession.

The Abu Marawat concession includes over a dozen targets at different stages of exploration. The most advanced is the Abu Marawat gold deposit, where the company established an initial NI 43-101 resource estimate in 2012 of approximately 400,000 ounces of gold equivalent. Aton has not advanced the Abu Marawat deposit further since then, but it may well serve as an ‘ace up the sleeve’ for them in the future as it has expansion potential.

The second most advanced target in the Abu Marawat concession is the Hamama project, which has three zones and measures approximately 3 km. in strike length. Hamama remains open along strike and Aton believes that there is potential for the strike length to double. They are currently working towards an initial resource estimate for the Hamama project.

A map showing locations of drilling activity on the Hamama target area.

A particularly compelling feature of the Hamama project is the Hamama West zone, which contains some of the highest grade gold results found on the concession in a near-surface ‘oxide cap’. Aton has recently completed a diamond drill campaign totalling 37 holes in 3,428 meters at Hamama West and the assay results continue to come in.

A photo of core samples from the 2015 campaign that brought new excitement to the Hamama West zone.

I am excited to see the results from Hamama West and will be keen to learn more about how the oxide cap fits into our geological understanding of the project. Is it a typical structure in VMS deposits? How large and rich could it be? I am not a geologist, but even I could get a sense of the geological significance of the sheet mineralization that outcrops at Hamama West, and made a point of it in my first article. I look forward to interviewing the Aton team further about these technical topics and reporting back to the CEO.CA community with quality content.

The entryway to an ancient mine on Aton's Abu Marawat concession. 

As may be expected, there are great stories hidden in the history of mining at Aton’s concession. The Hamama project was actually identified and studied in the 1980s by Sami El-Raghy, who founded Centamin and brought the Sukari mine into production in 2009. The Sukari gold mine was a company-maker for Centamin, despite the apparent challenges of doing business in Egypt.

To the best of my knowledge, Centamin (LSE: CEY, TSX:CEE) is the only other Canadian-listed gold mining company active in Egypt. It has done well by its shareholders and currently provides one of the highest dividend yields in the gold industry globally. Centamin earned US$140M in free cash flow from Sukari in 2015 and reports that the mine still has a 20-year reserve life with 12 million ounces of gold. Sukari is a massive and long-lived mine that has supported Centamin’s market capitalization of $3 billion.

As a point of comparison, Aton’s Abu Marawat concession is bigger and has more geological variety than Centamin's concession at the Sukari mine. Whereas Centamin found a company-making mine, Aton Resources is searching for a world-class mining district.

As Mr. Campbell said in an interview with me, “We will approach this in a step-wise progression of working our way down the three-kilometer strike length at Hamama. Which may, you know, end up being a six-kilometer strike length. To put that into context, the Sukari mine is two kilometers. So, it's a process, a step-wise, logical process of exploration and that's what we'll do.”

I found Mr. Campbell to be highly personable in our conversation and look forward to releasing the full transcript soon -- it comes in at just over 6,500 words.

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This is not investment advice. Do your own due diligence. I hold shares in the company.