ASCOM Geology and Mining

Founded in 1999 as the geology arm of Arab Swiss Engineering Company (ASEC), ASCOM has been historically involved in quarrying limestone and clay for major cement companies in Egypt. After ASEC was acquired by Citadel Capital in 2004, ASCOM was identified as a company with strong growth potential and was spun off as a separate entity in February 2007, allowing ASCOM’s scope and vision to expand significantly.

ASCOM today continues to lead in the field of geology and mining within North and East Africa, the Gulf and the Levant regions offering the market a unique interface between science and field applications. In addition to research and development activities related to its mining assets, ASCOM has also moved up the value chain within the industrial minerals sector with the production of calcium carbonate and glasswool.

ASCOM’s operations can be summarized as follows:

• Quarry management with a focus on complete outsourcing solutions for cement plant quarries operating in Egypt and Sudan.
• The mining of building materials, particularly aggregates with operations in Egypt, Algeria and the UAE.
• The mining of precious metals particularly gold, with ongoing exploration projects in Ethiopia and Sudan as well as exploration and production in Algeria.
• The manufacturing of industrial minerals, namely calcium carbonate, glasswool and rockwool in Egypt.

ASCOM (ASCM.CA on the Egyptian Exchange) has a paid in capital of US$ 60 million. In just three years the company has expanded from one legal entity to 15 companies with a presence in five countries employing approximately 1,100 people.

OPERATIONAL UPDATE

ASCOM has grown to become the largest specialized company in the quarry management sector within the MENA region. Over past decade, ASCOM has developed its unique expertise in this field, particularly within the cement industry. ASCOM manages the bulk of the large cement quarries in Egypt and Sudan, mining over 35 million tons per annum.

In the building materials sector, ASCOM has gone from being a service provider to holding concessions for mining aggregates, silica sand, gravel and other basic raw materials. The aim was to expand beyond the domain of the cement industry. Today, ASCOM operates a number of small quarries in Egypt and has two fully specialized companies operating in the aggregates market in the UAE and Algeria.

ASCOM established ASCOM Precious Metals Mining (APM) as a logical progression to consolidate all exploration operations of precious metals mining under one entity. After years of hard work, the company recently announced strong positive results in their exploration fields in Western Ethiopia. The company currently has five concessions in Ethiopia.

The company has also started fieldwork on its recently acquired concessions in Sudan’s Blue Nile State. APM’s Ethiopian and Sudanese concessions are both located within the Arabian-Nubian Shield, an under-explored area that is highly promising for its gold and gold-plus-base-metal mineralization.

APM is working on all concessions with a primary focus at present on the concessions in Asosa, an 800-square-kilometer area in Western Ethiopia, specifically the Dish Mountain and Abetslo concessions, where results have identified two well-defined gold and gold-plus-metal targets showing tonnage and grade potential to suggest an economic discovery is possible. A drilling phase began in October 2010 and surveys are ongoing in Sudan.

Further to the West, ASCOM holds a 27% stake in GMA Resources, a UK-listed gold exploration and production company that owns 52% of a promising exploration and production operation in southern Algeria, which produced 23,000 ounces of gold in 2010. GMA has initiated an aggressive exploration program with the aim of securing a minimum of two years of feedstock in order to maintain current production levels while also identifying new larger tonnage and lower grade reserves to expand the business.

ASCOM’s first manufacturing plant, the Minya Technical Calcium Carbonate plant, was commissioned in 2009. The 180,000 tons per year milling plant specializes in the production of calcium carbonate, a material with vast applications in the fields of plastics, paper, paint and chemicals. ASCOM holds a number of concessions for high-quality calcium carbonate in Upper Egypt within close proximity to the plant.

The plant is making steady progress and has made full use of its production capacity in the second half of 2010, a strong achievement for a newly operational greenfield. A project to double its capacity at a price equal to 30% of the original investment cost is currently underway. The majority of this new capacity would be in the fine to superfine products enabling growth into the high value and high growth export markets.

ASCOM is also working on completing the erection of its glasswool and rockwool plant in Egypt. The plant is expected to start operations by the end of 2011 with a capacity of 50,000 tons per year.
Both plants are focused on export markets and are accordingly established as free zone companies allowing them to take advantage of low tax and customs regulations.