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Golden future in store for Egypt?
04:56 - Source: CNN

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Thousands of years after the glory of ancient Egypt, explorers are searching for untapped gold reserves

Gold mining currently makes up 1.3% of the country's GDP, but the government hopes to grow that to 5%

CNN  — 

Not far from the Valley of the Kings in Luxor, Egypt, ancient gold mines dating back thousands of years lie abandoned deep beneath the scorched desert soil.

An important source of minerals during the heydays of the ancient Roman and Egyptian civilizations, the mines now have a new function – as a guide in the search for new sources of gold in Egypt’s eastern desert.

“We are looking where they had mined gold before,” says Mark Campbell, CEO of Alexander Nubia, an exploration company working in the area.

The ancient mines offer clues for where to drill. Not having to figure it out from scratch saves the explorers time and money.

“Using modern mining techniques and technology, we hope to recover a lot of the gold that they missed, because they were unable to mine it and process it.”

A new gold rush on the horizon?

Thousands of years ago, slaves dug out the gold in underground shafts and the mineral was used for trade and crafts. Now, analysts say they the industry could flourish again.

“If you look at the potential of the mineral resources in Egypt, it’s very significant,” says Yousef Husseini, Vice President of EFG Hermes.

“The Egyptian mineral resource authority has identified over 120 gold deposits in the eastern desert alone, so that gives you an idea of the tip of the iceberg out there.”

“It’s going to add a lot of GDP growth,” Husseini adds.

For now, only one large mine, the Sukari Gold Mine, is operating in the region – with an output of around 500,000 ounces per year.

Overall, the industry makes up a mere 1.3% of Egypt’s GDP, according to the Egyptian Mineral Resources Authority, but the government hopes to expand that to 5% over the next ten years.

A time for investments

On the downside, modern extraction techniques are expensive, and while some gold has already been found, there is a risk there is not enough.

“The issue is the quantity to make it commercial to spend the money to go and mine it,” says Campbell.

“When you go building a mine, you are talking about a sizable investment. Somewhere in the order of 500 million to a billion dollars.”

Leonard Karr, a geologist with Alexander Nubia says he is sure there is gold in the area.

Karr says eastern Egypt is “like a geologic Disney World,” with silver, copper, lead and zinc also expected to lie beneath the surface.

And so far their findings, albeit small, have been encouraging, he says.

“Literally we have just scratched the surface here – there is a lot more to discover.”