Centamin Egypt Limited

Centamin Egypt Limited

December 21, 2010 07:00 ET

Centamin Egypt Limited: Results of Sukari Scoping Study Stage 4 Expansion and Award of EPCM Contract

TORONTO, ONTARIO--(Marketwire - Dec. 21, 2010) - Centamin Egypt Limited ("Centamin" or "the Company") (TSX:CEE)(LSE:CEY), the gold mining group with operations in Egypt, is pleased to announce the results of a Scoping Study for a possible expansion of the Company's Sukari Project to process approximately 10 million tonnes per annum ("Mtpa") of ore.

The key objectives of the Scoping Study were to:

  • Confirm superior project economics of an expanded project compared to the currently underway expansion (to 5Mtpa complete mid 2011);
  • Confirm the preferred process flow route to achieve the above plant throughput rate; and
  • Determine the optimum mining rate to support such an expanded process plant.

The Scoping Study for the process plant expansion was conducted by Senet, whilst Centamin personnel carried out the mining studies and financial evaluations. All engineering capital estimates were carried out to a +/-30% estimate as is usual at this stage of evaluation with a more definitive capital estimate expected in Q2 2011 at the completion of the front end engineering phase.

The key results of the study were as follows:

  • Substantially superior comparative project economics were delivered on the 10mtpa plant and required mining scenario compared to the base case (5Mtpa process plant);
  • The preferred process flow route selected was a conventional SAG/Ball Mill grinding configuration (similar to the current plant configuration) due to its low technical risk, comparable economics and existing site operating knowledge with the Sukari orebody;
  • A high open pit mining rate option peaking at 74Mtpa was selected to maximise plant feed grade in the early years of the project based on the most recent proven and probable reserves and pit designs;
  • Resultant gold production peaked at 700,000 oz pa in 2015 and averaged 415,000 oz pa over the 15 year study period (2012-26) with Life of Mine operating costs of around $425/oz;
  • Capital cost for the expanded plant was estimated at approximately $179M (excluding contingency and additional mobile mining equipment).

With the robust economics of more than doubling the current capacity of the Sukari Gold Project confirmed, Centamin has tendered an EPCM contract for this expansion to various international engineering groups, with GBM Minerals Engineering Consultants (UK) being the successful bidder. Front end engineering and design of the expanded plant has now commenced by GBM, with an emphasis on finalising these designs to enable ordering of long lead items as well as commence early, key areas of project implementation that would provide material short term benefits to existing operations if the plant expansion was to be accelerated.

For the purposes of this study, no underground production was included as it would not materially affect plant sizing decisions and only positively impact open pit mining rate. An integrated project plan including the underground development is expected to be completed by mid 2011.

As part of this accelerated project implementation, the Company has purchased an additional second hand MAK 7MW HFO/Diesel medium speed generator and associated spare parts as part of its power supply expansion. This unit is identical to the units currently in operation in Sukari and will take power generation capacity from the existing 35MW to 42MW. Tenders have also been issued for expansion of the raw water supply and air services to accommodate the expanded process plant with work to commence early in the first quarter of 2011.

It is expected that the Board will provide a final commitment to proceed with construction of the project expansion late in the first quarter/early in the second quarter of 2011, which would include the placing of orders and deposits for long lead items (such as mills, key mining equipment and large electrical equipment), once front end engineering and design, detailed capital cost and schedule are substantially in place.

Commenting on the expansion plans for Sukari, Josef El-Raghy, Chairman of Centamin, said:

"With the significant and growing size of the Sukari deposit, the Scoping Study justified that Centamin can more than double the capacity of its process plant and deliver strong returns over a long mine life. It remains our target to complete the Stage 4 expansion by the end of 2012 and to fund this expansion out of existing Sukari cashflow. I am pleased to also have GBM with their diverse engineering experience world wide as our EPCM contractors for such an important part of the growth of Sukari into a significant long term gold producer."

For Centamin Egypt Limited

Josef El-Raghy, Chairman

21 December 2010

ABN 86 007 700 352

Contact Information

  • Centamin Egypt Limited
    Josef El-Raghy
    + 203 5411 259 or + 61 8 9316 2640
    Buchanan Communications Limited
    Bobby Morse
    + 44 (0) 207 466 5000
    Buchanan Communications Limited
    Katharine Sutton
    + 44 (0) 207 466 5000