The gold price seems to be reaching new heights every day - but not all gold mining companies have followed suit. Some have seen production fall owing to local difficulties, while some of the explorers have disappointed.

Centamin Egypt, on the other hand, seems to be doing well and looks like an attractive proposition for any equity investor wanting exposure to the increasing gold price.

Centamin has a single large project, the Sukari project in Egypt's Eastern Desert. It has 12.9m ounces of resources (9.39m ounces measured and indicated plus 3.54m ounces inferred [1] , and is already in production, the first gold having been brought out in June 2009. Centamin management claims it is Egypt's first large scale modern gold mine - and while it is on a pretty large scale already, it could double production levels over the next couple of years.

What's the downside? Well the resources are pretty low grade, at only 1.53g of gold per tonne of ore. There are higher grade areas within the resource, at 4-7 g per tonne, and at places - particularly underground, where concentrations as high as 17 g per tonne have been found.

Still, the lower mineralisation near-surface deposits can be effectively open-pit mined. That's already ongoing, and the open pit operations could increase production to 325,000 oz/year by 2013 [2] . That's the bread and butter.

The jam on the cake will be the underground operations; construction of the access shaft is already in progress though full scale underground mining isn't expected to start till 2011. Underground mining will allow Centamin to access the much thicker mineralisation further down. 

The combination of underground and open pit production should ramp up to 500,000 ounces a year or more by 2012, on the existing resource base. That will involve a £60m investment in expansion and mining facilities - but the good news is that the company already has the money, so it's not a hostage to the fortunes of the bond markets or banks' appetite for risk [3] .

And there's the tantalising hint of more to come, since drilling has shown that the mineralisation continues to the north of the existing production zone (and elsewhere: I particularly like the comment in the company presentation to investors that “Elephants don't travel on their own”).

What's more, this is going to…

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