TORONTO, ONTARIO--(Marketwire - July 29, 2010) - Centamin Egypt Limited ("Centamin" or "the Company") (TSX:CEE)(LSE:CEY), the gold mining group in Egypt, is pleased to announce quarterly update.
HIGHLIGHTS
Operations
- Gold production of 30,236 ounces was achieved from the Company's Sukari Gold Mine
- Gold sales totalled 30,759 ounces at an average sale price of US$1,203 per ounce
- Cash operating cost averaged US$569 per ounce
- Operating profit for the quarter of US$19.1m
- Successful commissioning of the stage 2 sulphide circuit with design throughput achieved
- Record monthly mine production of 1.98Mt achieved in May
- The Sukari gold resource increased to 10.99Moz Measured and Indicated and 3.5Moz Inferred during the quarter
Mine Expansion / Development
- Stage 3 design and engineering activities targeting throughput increase to 5.0Mtpa continued during the quarter with several key contracts awarded
- Stage 4 (8-10Mtpa) Scoping Study continued and is due for completion during Q3 2010
- Underground decline development advanced 852m for the quarter completing 68% of initial decline development prior to commencement of ore access drives
- Eight drill rigs continued resource definition drilling activities targeting Amun, Hapi and Pharaoh gold zones
Corporate/Finance Activities
- Maiden Operating Profit of US$19.1M for the quarter
- Planned transition to Calendar Year (31 December) accounting period effective 01 January 2011
Commenting on the quarterly results, Josef El-Raghy, Chairman of Centamin Egypt, said:
"Having successfully commissioned the Sulphide Circuit during the quarter, the Sukari operating team can focus on optimising all aspects of the project and push for our targeted 2010 gold production of 200,000 oz at under $400/oz for 2010. As the Sukari resource continues to grow, we will be able to deliver substantial production growth in the months and years ahead."
SUKARI GOLD MINE
Production Statistics
Notes:-
(1) Gold produced is gold poured and does not include gold-in-circuit at period end.
(2) Cash operating costs excludes royalties, exploration and corporate administration expenditure.
Operational Performance Overview
For the June quarter, a total of 1.4Mt of ore @ 0.95g/t Au was mined with a record total quarterly material movement of 5.3Mt and resultant waste to ore ratio of 2.8:1. Whilst greater quantities of sulphide ore were being exposed the transitional-sulphide contact was slightly deeper than originally anticipated (approx 15m) deferring the full presentation of the higher grade sulphides to the process plant. Full sulphide exposure in the Stage 1 pit is now scheduled for the July to September quarter.
During the quarter a further four CAT785C, 150t dump trucks were delivered taking the mining fleet to 14 CAT 785C dump trucks and 3 RH120 excavators and a variety of ancillary equipment. In preparation for an increase in mining rate early in 2011 orders were also placed for a fourth Terex RH120 excavator, three CAT785C dump trucks and a CAT993K front end loader. Mine productivity continued to improve during the quarter and it is expected this will flow to a positive and significant reduction in unit mining cost in subsequent quarters.
Process plant throughput for the quarter of 847,077t was affected by continued commissioning activities, specifically a number of unscheduled stoppages to replace worn or damaged SAG mill liners and lifters. A steel liner system has been ordered and will be installed during the fourth quarter. Dump leach pads have been extended through the quarter and irrigated with a total placement by end of quarter of approximately 2.0Mt of low grade ore at an average dumped grade of 0.5 g/t.
Resultant cash cost per ounce for the quarter was $569, higher than expected due primarily to lower gold production.
The Sukari gold mineral resource increased to 10.99Moz Measured and Indicated, plus 3.5Moz Inferred during the quarter representing an increase of 5% over the previous disclosed resources. A revised mineral reserve estimate is scheduled for completion in the third quarter.
Underground Mine Development
Underground decline development recorded an advance of 852 meters for the June quarter (1,924m in total), which included development of the main decline, ventilation decline and escape way infrastructure. First development ore is scheduled to be produced during the fourth quarter of 2010. The Company continues to target ore production of 500,000tpa at full ramp up.
Exploration
During the quarter, resource definition drilling continued to be mainly concentrated in the Hapi, Amun Deeps and Pharaoh Zones. In total, 17,272m of diamond drilling was completed during the quarter. Significant assays returned were as follows:
D1529 – 156m @ 2.07g/t from 230m
D1530 – 38m @ 2.56g/t from 180m
D1533 – 28m @ 2.11g/t from 454m
D1534 – 11m @ 2.17g/t from 528m
D1545 – 15m @ 2.46g/t from 234m
D1552 – 37m @ 4.84g/t from 624m
D1554 – 7m @ 2.27g/t from 40m
Regional exploration activities focused on Quartz Ridge with 1,765m drilled confirming Sukari "style" mineralisation. Significant assays returned were as follows:
QZ013- 6m @ 2.92 g/t Au from 89m
QZ036- 3m @ 15.54 g/t Au from 40m
SUKARI PROJECT EXPANSION
Stage 3 Expansion – Secondary Crushing
Design and engineering of the Stage 3 plant expansion continued throughout the quarter. Contracts awarded during the quarter include crushers, feeders, HV switchgear and weightometers. Tenders for civil and structural installations are underway with construction activities scheduled to commence during the third quarter of 2010.
Stage 3 is targeting a mill throughput increase to 5Mtpa and project completion is expected in mid 2011.
Stage 4 Expansion – 8 to 10Mtpa
A scoping study continued during the quarter to determine the optimum process flow route for a plant expansion of up to 10Mtpa. Initial testwork 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 the ordering of long lead items will commence. Stage 4 completion is targeted to occur in 2012.
RESOURCE AND RESERVE DEFINITION
Sukari Global Resource (as at 01 June 2010)
Notes to table: Figures in table may not add correctly due to rounding. Proven and probable ore reserves are included in mineral resources.
Sukari Mineral Reserve (as at 01 February 2010)
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 graph associated with this press release, please visit the following link: http://media3.marketwire.com/docs/sukari_global_resource_and_mineral_reserve_growth_graph.pdf
CORPORATE ACTIVITIES
At the end of the quarter, the Company had $35M in available cash funds. The Company remains debt free, unhedged and on track for 200,000 oz of gold production in 2010.
The Company will transition its accounting cycle to a calendar year basis, effective 01 January 2011. As a part of this transition, full year financial statements shall be available for the financial year ended 30 June 2010 and for the year ending 31 December 2010.
On behalf of Centamin Egypt Limited
Josef El-Raghy
Chairman
28 July 2010
Centamin Egypt Limited will host a conference call on Thursday, 29 July 2010 at 08:30am (London, UK time) to update investors and analysts on its results. Participants may join the call by dialling one of the following four numbers, approximately 10 minutes before the start of the call.
From UK: (toll free) 0808 238 7396
From US: (toll free) 1866 793 4273
From Canada: (toll free) 1866 423 2066
From rest of world: + 44 (0)20 3364 5947
Participant pass code: 358488#
A live audio webcast of the call will be available on:
http://mediaserve.buchanan.uk.com/2010/centamin290710/registration.asp
A replay of the webcast will be available on the same link from 10am on Thursday, 29 July 2010.
CORPORATE INFORMATION
CORPORATE DIRECTORY
Directors
Mr Josef El-Raghy, Chairman
Mr Harry Michael, Chief Executive Officer
Mr Trevor Schultz, Executive Director of Operations
Mr H Stuart Bottomley, Senior Non Executive Director
Mr Colin Cowden, Non Executive Director
Dr Thomas Elder, Non Executive Director
Professor G Robert Bowker, Non Executive Director
Senior Management
Mr Marco Di Silvio, Chief Financial Officer
Mrs Heidi Brown, Company Secretary
Registered Office
57 Kishorn Road, Mount Pleasant WA 6153, Australia
Tel: + 61 8 9316 2640
Fax: + 61 8 9316 2650
Email: centamin@centamin.com.au
Website: www.centamin.com
Egypt Office
361 El-Horreya Road, Sedi Gaber, Alexandria, Egypt
Tel: + 203 5411 259
Fax: + 203 522 6350
Auditor
Deloitte Touche Tohmatsu
Level 14, 240 St Georges Terrace, Perth WA 6000
Share Registries
Australia
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
Perth WA 6000
Telephone: + 61 8 9323 2000
Facsimile: + 61 8 9323 2033
Canada
Computershare
100 University Avenue, 8th Floor
Toronto, Ontario, ON M5J 2Y1
Telephone: + 1 416 263 9311
Facsimile: + 1 416 981 9777
United Kingdom
Computershare Investor Services
PO Box 82, The Pavilions, Bridgwater Road
Telephone: + 44 870 702 0003
Facsimile: + 44 870 703 6116
Stock Exchange Listings
London Stock Exchange, LSE code: CEY
Toronto Stock Exchange, TSX code: CEE
ABOUT CENTAMIN EGYPT LIMITED
Centamin is a mineral exploration, development and mining company that has been actively exploring in Egypt since 1995. The principal asset of Centamin is its interest in the Sukari Project, located in the Eastern Desert of Egypt. Construction at the Sukari Project commenced in March 2007 with the first gold bar being produced on 26 June 2009.
Optimal design throughput at the Sukari Gold Project was achieved during December 2009. In January 2010, the Company announced that the Sukari Gold Project had achieved yet another important milestone with the commencement of gold exports to a nominated overseas gold refinery.
The Sukari Project is the first large-scale modern gold mine in Egypt. Centamin's operating experience in Egypt gives it a significant first-mover advantage in acquiring and developing other gold projects in the prospective Arabian-Nubian Shield.
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.
FORWARD LOOKING STATEMENTS
Certain information contained in this report, including any information on Centamin's plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute forward-looking statements. Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. Centamin cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Centamin to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements. These factors include the inherent risks involved in exploration and development of mineral properties, changes in economic conditions, changes in the worldwide price of gold and other key inputs, changes in mine plans and other factors, such as project execution delays, many of which are beyond the control of Centamin.
Nothing in this report should be construed as either an offer to sell or a solicitation to buy or sell Centamin securities.
ABN 86 007 700 352