NR-> 1/4 reportRecord gold production: 53,189 oz for the 1/4 :-) SP is up in London.
Centamin Egypt Limited Quarterly Report for the Three Months Ended 31 December 2010
2/1/2011 3:36:31 AM - Market Wire
TORONTO, ONTARIO, Feb 1, 2011 (Marketwire via COMTEX News Network) --
CentaminEgypt Limited ("Centamin" or "the Company") (TSX:CEE)(LSE:CEY), thegold mining group in Egypt, is pleased to announce its quarterly update.
HIGHLIGHTS
Operations
-- Record quarterly gold production of 53,189 ounces was achieved from the
Company's Sukari Gold Mine, with production averaging over 20,000 ounces
per month in November and December.
-- Record quarterly material movement of 6Mt from the Sukari open pit.
-- Cash operating cost averaged US$498 per ounce for the quarter.
-- Successful installation of the steel liner and lifter system in the SAG
Mill in early November increased process plant throughput rate and
availability for the remainder of the quarter. No further issues were
encountered or expected from this area.
-- First development ore from the underground development was mined and
processed following intersection and access to the high grade Hapi Zone.
-- Close spaced stope definition drilling commenced to provide key
information for the assessment of the optimal underground mining method
to be employed for commercial ore extraction.
-- Expected 2011 production will be in the range of 250-290,000 ounces with
average cash costs around US$450/oz. Further guidance is planned for mid
2011 as more information becomes available on the timing and scale of
commercial underground production rates.
Mine Expansion / Development
-- Stage 3 construction activities remained on schedule during the quarter
with the completion of civil works and the arrival of the secondary
crusher to site. The project remains on schedule and budget for mid 2011
commissioning.
-- The Stage 4 Scoping Study was completed confirming the superior project
economics of a 10Mtpa expansion and determining the optimum process and
mining configuration to achieve the same.
-- Front end engineering and design work commenced on the Stage 4 expansion
with a view to long lead time items being ordered late Q1 - early Q2
2011.
-- A further 881m of underground development advance was made for the
quarter, with the development focus shifting to ore drive and cross cut
development ahead of trial stoping.
-- Eight drill rigs continued resource definition drilling activities
targeting Amun, Hapi and Pharaoh gold zones with a revised resource
statement expected during Q1 2011.
Corporate/Finance Activities
-- Operating profit for the quarter of US$18.4m.
-- Cash and liquid bullion assets of US$166M.
-- The Company raised net proceeds of US$132M during the quarter via a
share placement.
-- The Company remains debt free and unhedged.
-- All capital and ongoing operating expenses continue to be financed
from cash flows generated by the Company's gold revenues.
Current Political Situation in Egypt
Recentpolitical events in Egypt have not affected the safety of the Company'semployees or its day to day operations at its flagship project, Sukari.The Company looks forward however to a speedy resolution to the currentuncertainty and remains confident that such resolution will notnegatively impact on the Company's investment.
Commenting on the quarterly results, Josef El-Raghy, Chairman of Centamin said:
"Asexpected, the installation of steel liners and lifters in the SAG millduring the quarter has substantially improved plant operations andreliability. The two consecutive months of record gold production inNovember and December demonstrate the deliverability of a substantiallyhigher production profile in 2011 with our existing operations. Thisproduction will be further enhanced following the completion of Stages 3and 4 of the plant expansion, as well as the continued ramp up ofproduction from the underground mine."
SUKARI GOLD MINE
Production Statistics
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December September June March
2010 2010 2010 2010
Quarter Quarter Quarter Quarter
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Ore Mined ('000t) 2,123 1,682 1,400 984
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Total Mined ('000t) 5,975 4,916 5,305 4,326
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Strip Ratio waste/ore 1.8 1.9 2.8 3.4
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Ore Processed ('000t) 773 605 847 919
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Head Grade (g/t) 2.30 1.75 1.37 1.41
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Gold Recovery (%) 88.1 82.6 86.5 90.0
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Gold Produced - Total (1) (oz) 53,189 30,243 30,236 36,621
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Gold Produced - Dump Leach (oz) 2,387 3,049 2,791 -
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Cash Operating Cost of
Production (2) US$/oz 498 638 569 403
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Gold Sold (oz) 35,150 31,228 30,759 32,994
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Average Sales Price US$/oz 1,369 1,239 1,203 1,105
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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
Forthe December quarter, a total of 2.1Mt of ore @ 1.07g/t Au was minedwith a total quarterly material movement of 6.0Mt and resultant waste toore ratio of 1.8:1. This represents the highest quarterly ore movementto date and a 21% increase over the previous quarter mining activity.The increase in production is attributable to improved excavatorproductivity, coupled with the production benefit from the fourth TerexRH120 excavator, which began production during Q3. Mining of the Stage 1pit was completed through to the 1052mRL and Stage 2 mining progressedto the 1136mRL. Mining also commenced in Stage 1A cutback on the easternflank of Stage 1, with mining completed to the1100mRL.
A varietyof ancillary equipment to support mining and related project activitieswas delivered during the quarter. A CAT993K front end loader iscurrently being commissioned, whilst three CAT785C 150t dump trucks andfurther ancillary equipment are scheduled for delivery during the firsthalf of 2011 to support the projected increase in mining volume and aspart of the 5Mtpa plant expansion.
Process plant throughput forthe December quarter of 772,900 tonnes was 28% above the previousquarter, underpinning the benefit of the introduction of the SAG millsteel liner and lifter system in early November. As outlined in theprevious quarter, the steel liner and lifter system replaced the polymetsystem which was prone to intermittent failure. The installation of thesteel liners has enabled a sustainable increase in mill throughput andavailability.
Dump leach pads continue to be irrigated with atotal placement by end of quarter of approximately 2.8Mt of low gradeore at an average dumped grade of 0.5 g/t.
Resultant cash costper ounce for the quarter was US$498, in line with expectationsfollowing the replacement of the polymet liner and lifter system duringthe quarter.
Underground Mine Development
Undergrounddevelopment recorded an overall advance of 881 meters for the quarter,including continued development of the main Amun decline (105m), oredrives and cross cut development (640m) as well as completion of theventilation decline and escape way infrastructure. The main ventilationexhaust fan was successfully installed and commissioned during thequarter which will allow further decline development to take place inthe coming quarters.
Following the intersection of the high gradeHapi Zone mineralisation as expected at the 920 level, a total of39,577 tonnes @ 6.1g/t of development ore was produced during thequarter. By the end of the quarter, ore drive development had continuedthrough to the 905 level.
A total of 672m of undergrounddefinition drilling was completed during the quarter. Determination ofthe optimal underground mining method shall take place during the firsthalf of 2011, following completion of definition drilling program.
Exploration
Duringthe quarter, resource definition drilling continued to be mainlyconcentrated in the Hapi, Amun Deeps and Pharaoh zones. In total,16,663m of diamond drilling was completed during the quarter. Thecurrent drill program continues to show success in targeting the downdip and along strike extension of the Hapi Zone and other parallel highgrade structures within the main porphyry. These zones along the entirestrike length of Sukari Hill (2.5km) are the target of the comprehensiveinfill and extension drilling with 8 diamond coring rigs:
D1583 - 19m @ 2.85g/t from 53m D1588 - 10m @ 3.26g/t from 174m D1588 -100m @ 1.52g/t from 462m D1589 - 10m @ 5.53g/t from 152m D1591 - 23m @3.65g/t from 530m D1592 - 43m @ 1.19g/t from 35m D1601 - 51m @ 1.43g/tfrom 235m
SUKARI PROJECT EXPANSION
Stage 3 Expansion - Secondary Crushing
Constructionactivities continued throughout the quarter with steel erection on thetransfer tower, crusher building and screening building all underway,following mobilisation of the principal construction contractor. Steelerection is well progressed with completion of steel deliveries due inearly 2011. Installation of the secondary crushing equipment to site isscheduled throughout the first quarter of 2011.
Stage 3 is targeting a mill throughput increase to 5Mtpa and project completion is expected in mid 2011.
Capital expenditure for the quarter and calendar year were US$6M and US$8.5M respectively.
Stage 4 Expansion - 10Mtpa
Duringthe quarter, the Stage 4 scoping study was completed. The Companyannounced that the preferred process flow route selected was aconventional SAG/Ball Mill grinding configuration (similar to thecurrent plant configuration) due to its comparable economics andexisting site operating knowledge with the Sukari orebody.
FinalBoard commitment for the Stage 4 expansion is expected during the firsthalf of 2011, following completion of front end engineering and designactivities. Stage 4 completion is targeted to occur in 2012.
Itis intended that both Stage 3 and Stage 4 expansions will be financedentirely from cash flow generated from production and gold sales.
RESOURCE AND RESERVE DEFINITION
Sukari Global Resource (as at 01 June 2010)
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0.5 g/t Cut-off Au Tonnes (Mt) Grade (g/t Au) Gold (Moz)
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Measured & Indicated 235.73 1.45 10.99
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Inferred 68.9 1.6 3.5
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TOTAL 304.6 1.48 14.5
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Notes to table: Figures in table may not add correctly due to rounding.
Proven and probable ore reserves are included in mineral resources.
Figures are below the August 2010 mined surface.
Sukari Mineral Reserve (as at 01 August 2010)
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Proven Probable Mineral Reserve
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Tonnes Tonnes Cont Au
Tonnes (Mt) Au (g/t) (Mt) Au (g/t) (Mt) Au (g/t) (Moz)
---------------------------------------------------------------------------
102.4 1.09 142.9 1.19 245.4 1.15 9.1
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The mineral reserves are based on the resource model announced on 08 June
2010 which includes drilling up to 31 May 2010 and below the August 2010
mined surface, a gold price of US$900 per ounce and a cut-off grade of 0.3
g/t Au for oxide transition and sulphide material.
Toview the Sukari Global Resource and Mineral Reserve Growth graph,please visit the following link:https://media3.marketwire.com/docs/sukari.pdf.
CORPORATE ACTIVITIES
Atthe end of the quarter, the Company had US$166M in available cash andliquid bullion assets. The Company remains debt free and unhedged.
DuringDecember 2010, the Company raised net proceeds of US$132M, followingthe successful placement of 51.5M shares at 167 pence. Centamin intendsto use the net proceeds for the next stage of its growth strategy.
MrHerbert Stuart Bottomley retires as a non executive director of theCompany effective 02 February 2011. The Board would like to thank Stuartfor all of his time, effort and guidance over the past five years, andwishes him the best in his personal endeavours.
On behalf of Centamin Egypt Limited
Josef El-Raghy, Chairman
01 February 2011
Centamin Egypt Limited will host a conference call on Tuesday, 01 February
2011 at 11:30am (London, UK time) to update investors and analysts on its
quarterly results. Participants may join the call by dialling one of the
following four numbers, approximately 10 minutes before the start of the
call. Participant pass code: 862573#
From UK: (toll free) 0800 368 1895 From US: (toll free) 1866 928 6049
From Canada: (toll free) 1866 561 8617 From rest of world:
+ 44 20 3140 0693
A live audiowebcast of the call will be available on:
https://mediaserve.buchanan.uk.com/2011/centamin010211/registration.asp.
A replay of the webcast will be available on the same link from 1.00 pm
(London, UK time) on Tuesday, 01 February 2011.
COMPETENT PERSONS STATEMENT
Quality Assurance and Control and Qualified Person
Theinformation in this report that relates to ore reserves has beencompiled by Mr Andrew Pardey. Mr Pardey is a Member of the AustralasianInstitute of Mining and Metallurgy and is a full time employee of theCompany. He has sufficient experience which is relevant to the style ofmineralisation and type of deposit under consideration and to theactivity he is undertaking, to qualify as a "Competent Person" asdefined in the 2004 Edition of the "Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves" and is a"Qualified Person" as defined in the "National Instrument 43-101 of theCanadian Securities Administrators" and "CIM Definition Standards ForMineral Resources and Mineral Reserves" of December 2005 as prepared bythe CIM Standing Committee on Reserve Definitions of the CanadianInstitute of Mining. Mr Pardey's written consent has been received bythe Company for this information to be included in this report in theform and context which it appears.
The information in this reportthat relates to mineral resources is based on work completedindependently by Mr Nicolas Johnson, who is a Member of the AustralianInstitute of Geoscientists. Mr Johnson is a full time employee ofHellman and Schofield Pty Ltd and has sufficient experience which isrelevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is undertaking to qualify as a"Competent Person" as defined in the 2004 edition of the "AustralasianCode for Reporting of Exploration Results, Mineral Resources and OreReserves" and is a "Qualified Person" as defined in "National Instrument43-101 of the Canadian Securities Administrators". Mr Johnson consentsto the inclusion in the report of the matters based on his informationin the form and context in which it appears.
Information in thisreport which relates to exploration, geology, sampling and drilling isbased on information compiled by geologist Mr Richard Osman who is afull time employee of the Company, and is a member of the AustralasianInstitute of Mining and Metallurgy with more than five years experiencein the fields of activity being reported on, and is a 'Competent Person'for this purpose and is a "Qualified Person" as defined in "NationalInstrument 43-101 of the Canadian Securities Administrators". Hiswritten consent has been received by the Company for this information tobe included in this report in the form and context which it appears.
Allexploration and resource samples were analysed by Ultra Trace Pty Ltd,Canning Vale, Western Australia. All mine based production samples wereanalysed by Sukari Assay Laboratory, Egypt.
Refer to the updatedTechnical Report which was filed in December 2010 for further discussionof the extent to which the estimate of mineral resources/reserves maybe materially affected by any known environmental, permitting, legal,title, taxation, socio-political, or other relevant issue.
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
Canada
Computershare
100 University Avenue, 8th Floor
Toronto, Ontario, ON M5J 2Y1
Telephone: + 1 416 263 9311
United Kingdom
Computershare Investor Services
PO Box 82, The Pavilions, Bridgwater Road
Telephone: + 44 870 702 0003
Stock Exchange Listings
London Stock Exchange, LSE code: CEY
Toronto Stock Exchange, TSX code: CEE
ABOUT CENTAMIN EGYPT LIMITED
Centaminis a mineral exploration, development and mining company that has beenactively exploring in Egypt since 1995. The principal asset of Centaminis its interest in the Sukari Project, located in the Eastern Desert ofEgypt. Construction at the Sukari Project commenced in March 2007 withthe first gold bar being produced on 26 June 2009.
Optimal designthroughput at the Sukari Gold Project was achieved during December2009. In January 2010, the Company announced that the Sukari GoldProject had achieved yet another important milestone with thecommencement of gold exports to a nominated overseas gold refinery.
TheSukari Project is the first large-scale modern gold mine in Egypt.Centamin's operating experience in Egypt gives it a significantfirst-mover advantage in acquiring and developing other gold projects inthe prospective Arabian-Nubian Shield.
FORWARD LOOKING STATEMENTS
Certaininformation contained in this report, including any information onCentamin's plans or future financial or operating performance and otherstatements that express management's expectations or estimates of futureperformance, constitute forward-looking statements. Such statements arebased on a number of estimates and assumptions that, while consideredreasonable by management at the time, are subject to significantbusiness, economic and competitive uncertainties. Centamin cautions thatsuch statements involve known and unknown risks, uncertainties andother factors that may cause the actual financial results, performanceor achievements of Centamin to be materially different from theCompany's estimated future results, performance or achievementsexpressed or implied by those forward-looking statements. These factorsinclude the inherent risks involved in exploration and development ofmineral properties, changes in economic conditions, changes in theworldwide price of gold and other key inputs, changes in mine plans andother factors, such as project execution delays, many of which arebeyond 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
SOURCE: Centamin Egypt Limited
CentaminEgypt Limited Josef El-Raghy Chairman + 61 (8) 9316 2640 or + 203 5411259 www.centamin.com Buchanan Communications Limited Bobby Morse /Katharine Sutton + 44 (0) 20 7466 5000
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