By Peter @Newton Bell, September 28, 2016
In the early 1900s, British geologists came to Egypt in search of the nation’s rich ancient mineral wealth. They must have been inspired by the striking array of metals and gems that adorned the burial sites of ancient Egyptian rulers. Just think of how the sarcophagus of Tutankhamen still inspires awe in people today -- where did these riches come from?
The British who came to Egypt followed this exploration adage: “you should start by looking where the old timers stopped mining.” In the early 20th century, many British miners explored and developed mines at ancient archeological sites where people had mined high-grade veins with 10-20% copper. The British miners successfully extracted base metals, precious metals, and gemstones from the Eastern Desert, but their success was overshadowed by the discovery of oil and gas in the mid-20th century. Since then, there has been little mining activity in Egypt and some of the land with the richest mineralization has surely sat dormant.
Aton Resources Inc. (TSXV:AAN) is now bringing modern exploration techniques to one of the last great under-explored areas in the world today, the Eastern Desert of Egypt. Aton’s concession is located in the Eastern Desert, the Northern part of the Nubian Shield to be exact, and it contains many historical mining sites that suggest the area has great geological potential.
Like those who came before, Aton follows the clues left by past miners. What was a mystery to miners in ancient times was better understood by British miners 100 years ago, and is even better understood by Aton today. Aton has a broad set of modern geological exploration techniques available to investigate around these historical sites, so it's exciting to consider what they may yet discover.
The technical diagram below shows the significance of Aton’s historical mining sites in a way that only a geologist could love. See the “Ancient copper workings” marked on the surface of the earth in the diagram? These historical workings correspond to places where sheets of mineralization outcrop. Aton drilled these holes in 2015 and the results marked a ‘win’ for our conceptual understanding of the Hamama West zone in the Abu Marawat concession.
The entire Abu Marawat concession covers over 738 sq. km. and contains a 40-km gold trend, anchored by two deposits on opposite ends with many early-stage targets in between. The area along the trend contains two historical British gold mines, referred to as Sir Bakis and Semna. Aton believes that the sheer size and number of targets on their concession means it has the potential to become a "Mining District" with concurrent exploration, development, and mining activities.
The scale of the geological opportunity Aton faces is daunting. The CEO, Mr. Mark Campbell, is ambitious in his goals for Aton Resources, but also runs a tight ship. In an interview, he said “One thing that always scares me is a geologist with a chequebook.”
He also commented, “I think we have all been in junior resource stocks of many varieties, carried out feet-first,” and he is trying to set a better example with Aton. A big part of this leadership is delivering low-cost exploration activities. Mr. Campbell told me that the finding costs were approximately US$15 per ounce of gold equivalent for their 2012 resource estimate, which is small relative to the current gold price above US$1,300 an ounce. The finding costs on Aton’s next resource estimate may prove smaller still.
Thinking of the concession as a mining district is an important shift that is happening now in the story of Aton Resources. By expanding the focus to consider all of the targets in their concession area, Aton is developing an exploration pipeline that will be able to generate ongoing news flow on several fronts in a low-cost manner. The company’s large prospective concession, in-country expertise, and strong shareholder base suggests they are positioned to deliver game-changing exploration results immediately and for years into the future.
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This is the first in a series of articles that I have prepared on Aton Resources for the CEO.CA community. It has been my pleasure to learn and write about the company. I particularly enjoyed reading all of the past comments on the #AAN channel. A big shout out to @stateside and the Comanus Rising podcast for his long-term commitment to the company.
Thanks very much for taking the time to read and comment on this article. Please stay tuned for additional content, including a full transcript of my conversation with Mr. Mark Campbell.
This is not investment advice. Do your own due diligence. I hold shares in the company.
