Centamin Egypt Limited
TSX : CEE
LSE : CEY

Centamin Egypt Limited

May 05, 2010 02:08 ET

Centamin Egypt Activities in the Quarter Ended 31 March 2010

TORONTO, ONTARIO--(Marketwire - May 5, 2010) - Centamin Egypt Limited ("Centamin" or "the Company") (TSX:CEE)(LSE:CEY), the gold mining group in Egypt, is pleased to announce its third quarter results.

HIGHLIGHTS

Operations

  • Gold production of 36,621 ounces was achieved from the Company's Sukari Gold Mine
  • Gold sales totalled 32,994 ounces at an average sale price of US$1,105 per ounce
  • Cash operating cost averaged US$403 per ounce
  • Stage 1 process plant throughput rates achieved nameplate capacity of 4.0Mtpa with metallurgical recovery averaging 90% for the quarter
  • Proven and probable ore reserves increased to 7.1Mozs from the previous 6.4Mozs

Mine Expansion / Development

  • Stage 2 Sulphide circuit commissioning activities and first sulphide feed to commence in the forthcoming quarter
  • Final total capital cost estimate for both stages US$267M
  • Stage 3 (secondary crushing) design and capital estimation activity commenced during the quarter targeting throughput increase to 5.0Mtpa
  • Stage 4 (8-10Mtpa) scoping study to determine the optimum process design route for expanding the completed Stage 3 process plant commenced during the quarter
  • Underground decline development advanced 925m for the quarter
  • Eight drill rigs continued resource definition drilling activities targeting Amun, Hapi and Pharaoh gold zones
  • Gold mineralisation continues to be confirmed in Quartz Ridge (6km NE of Sukari) with further drilling planned 

Corporate Activities

  • Mr Harry Michael appointed CEO
  • Mr Josef El-Raghy appointed Executive Chairman 

Commenting on the quarterly results, Josef El-Raghy, Chairman of Centamin Egypt, said:

"Significant progress has been achieved during the three months to March, with gold production in line with expectations yet cash costs substantially less than anticipated for the inaugural quarter. We have set a solid foundation for 2010 and with the sulphide circuit coming on stream during the current quarter we remain on track to produce 200,000 oz of gold in our first year."

SUKARI GOLD MINE

Production Statistics

    March 2010 Quarter December 2009 Quarter
Ore Mined ('000t) 984 894
Total Mined ('000t) 4,326 3,914
Strip Ratio waste/ore 3.4 3.4
Ore Processed ('000t) 919 140
Head Grade (g/t) 1.41 1.11
Gold Recovery (%) 90.0 70.6
Gold Produced (1) (oz) 36,621 244
Cash Operating Cost of Production (2) US$/oz 403 n/a
Gold Sold (oz) 32,994 n/a
Average Sales Price US$/oz 1,105 n/a

Notes:-

(1) Gold produced is gold poured and does not include gold-in-circuit at period end. The previously reported figure of 1,118 ounces for the December quarter included gold in circuit.

(2) Cash operating costs excludes royalties, exploration and corporate administration expenditure.

Operational Performance Overview

For the March quarter, a total of 984,461 tonnes of ore @ 1.05g/t Au was mined. Total waste movement for the March quarter was 3.3M tonnes, with a resulting stripping ratio of 3.4:1. With the mine exposing greater quantities of sulphide ore, feed grade is expected to increase throughout the year in accordance with current, and previously advised mine development plans.

Mobilisation of a further RH120 excavator occurred during the quarter and scheduled for second quarter delivery are an additional four 785C, 150t dump trucks. Following the December resource upgrade, the open pit ore reserve increased to 7.1Moz based on a US$700/oz gold price and drilling completed up to 01 November 2009.

Mill throughput for the quarter was 919,004 tonnes via the Stage 1 (CIL) circuit, with average throughput rates and recoveries steadily improving throughout the period. A total of 1.2M tonnes of low grade ore was delivered to dump leach pads during the quarter bringing total placement to approximately 2.0Mt at an average dumped grade of 0.5 g/t. Irrigation of the first cell commenced late in the quarter.

Average cash costs per ounce for the quarter were $403.

Underground Mine Development

The underground operation recorded an advance of 925 metres for the March quarter (1,072m in total), including development of the main decline, ventilation decline and escape way infrastructure. The decline is currently 75m below surface and the planned development is expected to provide initial access to the orebody 250m below surface towards the end of 2010. The Company continues to target initial production of 500,000tpa.

Exploration

During the quarter, resource definition drilling continued to be mainly concentrated in the Hapi, Amun Deeps and Pharaoh Zones. In total, 15,207m of diamond and 838m of RC drilling was completed during the quarter. Significant assays returned were as follows:

D1444 – 18m @ 2.37g/t from 224m
D1508 – 7m @ 5.17g/t from 522m
D1509 – 13m @ 4.06g/t from 600m
D1510 – 53m @ 1.50g/t from 361m
D1523 – 17m @ 1.79g/t from 139m
QZ016 – 15m @ 1.05g/t from 1m
QZ022 – 7m @ 2.30g/t from 77

SUKARI PROJECT EXPANSION

Stage 3 Expansion

During the period, design and engineering of the Stage 3 plant expansion commenced. This primarily involves installation of a secondary crushing circuit and related infrastructure that will be integrated into the existing process plant crushing circuit. Stage 3 is targeting a mill throughput increase of 25% to 5Mtpa and project completion is expected in mid 2011.

Stage 4 Expansion

A scoping study has commenced to determine the optimum process flow route for a plant expansion up to 10Mtpa. Initial test work has indicated a number of crushing and grinding alternatives exist to achieve this outcome. Upon completion of the study, in the second half, detailed design and costing of the preferred route as well as ordering of long lead items will commence. Stage 4 completion is targeted to occur in 2012.

It is estimated that during 2010, $30m of capital will be directed towards Stage 3, Stage 4 and additional mining fleet. 

RESOURCE AND RESERVE DEFINITION

Sukari Global Resource

0.5 g/t Cut-off Au Tonnes (Mt) Grade (g/t Au) Gold (Moz)
Measured & Indicated 210.19 1.52 10.29
Inferred 66.3 1.6 3.4
TOTAL 276.5 1.5 13.7

Note to table: Figures in table may not add correctly due to rounding.

Sukari Mineral Reserve

Proven Probable Mineral Reserve
Tonnes (Mt) Au (g/t) Tonnes (Mt) Au (g/t) Tonnes (Mt) Au (g/t) Cont Au (Moz)
69.1 1.37 90.1 1.41 159.3 1.39 7.1

Note to table: The mineral reserves are based on drilling up to 01 November 2009, a gold price of US$700 per ounce and a cut-off grade of 0.4 g/t Au for oxide and sulphide material and 0.5 g/t for transitional.

Sukari Global Resource and Mineral Reserve Growth

To view the Sukari Global Resource and Mineral Reserve Growth chart, please visit the following link: http://media3.marketwire.com/docs/centamin_0505_sukari_global_resource_and_mineral_growth.pdf

CORPORATE ACTIVITIES

Mr Harry Michael joined the Board of Centamin as Chief Executive Officer. Mr Michael was most recently Executive Director, Chief Operating Officer and Vice President of Operations of Equinox Minerals Limited.

Following Mr Michael's appointment, Mr Josef El-Raghy, transitions to the role of Executive Chairman of Centamin.

At the end of the quarter, the Company had $35.1M in available cash funds. The Company remains debt free, unhedged and on track for 200,000 oz of gold production in 2010.

On behalf of Centamin Egypt Limited

Josef El-Raghy, Chairman

05 May 2010

Centamin will host a live audio webcast on Wednesday, 05 May 2010 at 09:30am (London, UK time) to update investors and analysts on its results.

The live audio webcast will be available on:

http://mediaserve.buchanan.uk.com/2010/centamin050510/registration.asp

A replay of the webcast will be available on the same link from 11.00am on Wednesday, 05 May 2010.

COMPETENT PERSONS STATEMENT

Quality Assurance and Control and Qualified Person

The information in this report that relates to ore reserves has been compiled by Mr Andrew Pardey. Mr Pardey is a Member of the Australasian Institute of Mining and Metallurgy and is a full time employee of the Company. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a "Competent Person" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in the "National Instrument 43-101 of the Canadian Securities Administrators" and "CIM Definition Standards For Mineral Resources and Mineral Reserves" of December 2005 as prepared by the CIM Standing Committee on Reserve Definitions of the Canadian Institute of Mining. Mr Pardey's written consent has been received by the Company for this information to be included in this report in the form and context which it appears.

The information in this report that relates to ore reserves has also been independently verified by Mr Pieter Doelman, an employee of Coffey Mining Pty Ltd Perth. Mr Doelman is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience, relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking, to qualify as a "Competent Person" as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in the "National Instrument 43-101 of the Canadian Securities Administrators" and the "CIM Definition Standards For Mineral Resources and Mineral Reserves" of December 2005 as prepared by the CIM Standing Committee on Reserve Definitions of the Canadian Institute of Mining. Mr Doelman consents to the inclusion of this estimate in reports.

The information in this report that relates to mineral resources is based on work completed independently by Mr Nicolas Johnson, who is a Member of the Australian Institute of Geoscientists. Mr Johnson is a full time employee of Hellman and Schofield Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a "Competent Person" as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101 of the Canadian Securities Administrators". Mr Johnson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by geologist Mr Richard Osman who is a full time employee of the Company, and is a member of the Australasian Institute of Mining and Metallurgy with more than five years experience in the fields of activity being reported on, and is a 'Competent Person' for this purpose and is a "Qualified Person" as defined in "National Instrument 43-101 of the Canadian Securities Administrators". His written consent has been received by the Company for this information to be included in this report in the form and context which it appears.

The assay samples were analysed by Ultra Trace Pty Ltd, Canning Vale, Western Australia.

Refer to the updated Technical Report which was filed in May 2009 for further discussion of the extent to which the estimate of mineral resources/reserves may be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issue.

ABN 86 007 700 352

Contact Information

  • Centamin Egypt Limited
    Josef El-Raghy
    Chairman
    + 61 (8) 9316 2640
    www.centamin.com
    or
    Buchanan Communications Limited
    Bobby Morse
    + 44 (0) 207 7466 5000