Centamin Egypt Reports on Activities in the Quarter Ended December 31, 2009
13 February 2010 - 2:29AM
Marketwired Canada
Centamin Egypt Limited ("Centamin" or "the Company") (TSX:CEE)(LSE:CEY) is
providing the following report on its activities in the quarter ended December
31, 2009:
Highlights
Construction and Development
- Completion of Stage 1 commissioning activities with remaining Stage 2
construction activities well advanced
- Process Plant performing in accordance with design specifications
Operations
- Mill throughput commenced following completion of Stage 1 construction
activities
- Continued increase in open pit mine production in both material and ore
movement
- Underground decline development underway
- Sukari Resource upgraded to a Measured and Indicated Resource of 210.2Mt
@ 1.52g/t Au for 10.29Moz Au with an Inferred Resource of 66.3Mt @
1.6g/t Au for 3.4 Moz Au
- 15,337m of resource diamond drilling completed
- Eight drill rigs on site continuing resource definition drilling to
target Hapi, Amun Deeps and Pharaoh Zone
- Regional Exploration continues - drilling commenced at Quartz Ridge Main
Quartz Vein structure during the quarter with 16 holes holes for 1,436m
completed to date. Drilling confirms mineralised quartz vein shear zone
structure
- Significant intersections received for the quarter include:
D1470 - 20m @ 3.61g/t from 310m
D1471 - 19m @ 13.7g/t from 804m
D1479 - 16m @ 8.16g/t from 547m
D1482 - 21m @ 4.19g/t from 593m
D1490 - 45m @ 2.11g/t from 325m
D1494 - 24m @ 3.19g/t from 311m
Corporate
- Successfully migrated to the main board of the London Stock Exchange in
November 2009
Subsequent Events
- Commencement of gold exports to a nominated overseas gold refinery
- ASX delisting completed
- Total reserves increased to 7.1 million ounces
Commenting on the quarterly report Josef El-Raghy, Managing Director/CEO of
Centamin, stated:
"The quarter saw the maiden feed through our mills at Sukari. This follows the
successful completion of Stage 1 construction activities and the achievement of
design throughput from the Sukari processing facility. We have also seen the
first gold being exported and sold at spot prices from Sukari which represented
one of the last major milestones in project execution. From the rate of
production and the recovery rates reached so far, Centamin remains on track to
hit its production target of over 200,000 oz Au in the current calendar year.
Corporately, our move to the Main Market of the London Stock Exchange during the
quarter was another step in the Company's growth as the Company continues to
evolve from a junior explorer to a significant gold producer".
SUKARI GOLD PROJECT - CONSTRUCTION
Stage 1 (oxide circuit) commissioning activities were completed during the
December 2009 quarter, with regular and sustained ore throughput achieved late
in the quarter. Stage 2 (sulphide circuit) construction is well advanced with
completion scheduled for February / March. Workforce levels have reduced in line
with the completion of construction activities and transition into full
production from the Sukari Gold Project. Engineering works for expansion of
throughput to 8 - 10 mtpa will commence in quarter one of 2010.
SUKARI GOLD PROJECT - OPERATIONS
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% Change
Unit Measure Dec 2009 Sept 2009 Dec vs. Sept
Quarter Quarter Quarter
----------------------------------------------------------------------------
Ore Mined '000 tonnes 894 904 (1)%
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Total Material Movement '000 tonnes 3,914 3,458 13%
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Ore Processed '000 tonnes 140 - n/a
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Head Grade grams/tonne 1.11 - n/a
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Gold Recovery % 70.6 - n/a
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Gold Produced ounces 1,118 - n/a
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Mine Production
Centamin conducts its open pit mining operations on an 'owner operator' basis.
Primary mining fleet includes ten CAT785C rear dump trucks and two O&K RH120E
excavators with additional mine support equipment in place. During the quarter,
a third O&K RH120E excavator was commissioned and commenced mining operations.
Additional trucking fleet is currently being shipped to Sukari and will be
commissioned during the June 2010 quarter.
During the quarter, ore was mined in Stage 1 from the 1136RL to 1112RL bench and
in Stage 2 from 1178RL to 1170RL. 37,023 grade control metres in Stage 1 and
Stage 2 were completed to the 1088RL and 1160RL respectively. For the December
quarter, a total of 893,694 tonnes of ore @ 0.82g/t Au was mined. Total waste
movement for the December quarter was 3.9M tonnes, with a resulting stripping
ratio of 4.4:1. Ore grades achieved during the December quarter are in line with
oxide ore forecasts and in accordance with mine development expectations. Access
to transitional ore areas, including the higher grade sulphide zones in Stage 2,
commenced during the December quarter. As the volume of higher grade zones
increases throughout 2010, the average mine grade is expected to increase in
accordance with current mine development plans.
Drilling and mapping has shown high grade gold is associated with strongly
sheared and sericite-hematite altered porphyry; with stock works of extensional
quartz veins and sheared contacts with the hangingwall rocks. Correlations
between the resource model and grade control continue to be satisfactory, with
mineralised controlling structures adequately appearing in the grade control and
mapping. To date, ore mined from Phase 1 and Phase 2 is 14% higher in gold
ounces compared to the reserve model. This is encouraging as we mine the top of
Sukari Hill where there is minimal resource drilling data coverage due to the
steepness of the topography.
Processing
Mill throughput commenced during the quarter, with 140,101 tonnes milled through
to the end of the quarter. Since the commencement of ore treatment, average mill
throughput rates and recoveries have increased steadily and have been
consistently achieving design capacity since the end of the December quarter. A
further 85,000 tonnes of crushed material has been transferred to dump leach
pads during the quarter. A total of 809,000 tonnes at 0.7 g/t have been
transferred to the dump leach pads since inception of leaching operations.
UNDERGROUND MINE DEVELOPMENT
Underground development at Sukari continues to progress well. The Amun decline
recorded a total advance of 147 metres through to the end of December.
The initial development has encountered variable ground conditions which were
expected in the footwall and close to surface. These have been managed with
simple ground support regimes, and have not affected the advance rates
anticipated. In the coming quarter, development rates will be increasing as more
personnel are mobilised. Planned development is expected to provide initial
access to the orebody towards the end of 2010. Stoping panels are scheduled to
commence production in early 2011.
The Company believes it has the opportunity to increase production by accessing
higher grade ore from an underground mine. The aim is to access this higher
grade ore earlier than otherwise would have been scheduled through surface
mining. As well as providing the haulage access for the planned underground
operation, the decline will also provide a platform from which to delineate
deeper targets which may form the basis of a larger underground operation
looking forward.
An initial underground mining rate of 500,000 tonnes per annum at a grade
between 5-10g/t Au is being targeted thus bringing higher grade ore feed into
production earlier than otherwise would have been scheduled through surface
mining averaging circa 2g/t.
RESOURCE DEFINITION
As previously reported in December 2009, the Sukari mineral resource was
upgraded to 10.29Moz Measured and Indicated, plus 3.4Moz Inferred. The total
Global Resource increased by 374,000 oz Au (4%) Measured and Indicated, and
175,000 oz Inferred (5%). Measured and Indicated resources account for 75% of
global resources.
Table 1 - Total Resource (December 2009)
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Total
--------------------
Measured Indicated Measured + Indicated Inferred
- --------------------------------------------------------------------------
Cut-off Tonnes Grade Tonnes Grade Tonnes Grade Gold Tonnes Grade Gold
----------------------------------------------------------------------------
g/t (Mt) (g/t (Mt) (g/t (Mt) (g/t (Moz) (Mt) (g/t (Moz)
Au Au) Au) Au) Au)
----------------------------------------------------------------------------
0.5 78.26 1.48 131.93 1.55 210.19 1.52 10.29 66.3 1.6 3.4
----------------------------------------------------------------------------
0.7 56.25 1.82 95.75 1.91 152.00 1.88 9.18 47.2 2.0 3.1
----------------------------------------------------------------------------
1 36.65 2.35 63.59 2.45 100.24 2.42 7.78 31.2 2.6 2.7
----------------------------------------------------------------------------
Note to Table: Figures in table may not add correctly due to rounding
----------------------------------------------------------------------------
To view Figure 1, please visit the following link:
http://media3.marketwire.com/docs/sukariFig1.pdf
South of 11312.5N (ie southern half of the Sukari hill outcrop), the Measured
and Indicated resource is estimated at 8.94Moz, equal to approximately 87% of
the total Measured and Indicated resource. The resource increase is based on
additional assay results from approximately 23,274 metres of drilling.
On 01 February 2010, the Company announced that the total reserves had increased
to 7.1 million ounces from the previously reported 6.4 million ounces. The new
mineral reserves are based on drilling up to 01 November 2009 and a gold price
of US$700 per ounce. Details of the new reserves calculated for Sukari are
listed in the table below. The reserves have been marginally depleted using the
31 December 2009 topographic survey and exclude material mined between April and
December 2009.
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Sukari Open Pit Mineral Reserve Estimate as at 31 December 2009
(reported at a cut-off grade of 0.4 g/t Au for oxide and sulphide
material and 0.5 g/t for transitional)
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Proven Probable Mineral Reserve
----------------------------------------------------------------------------
Tonnes Au Tonnes Au Tonnes Au Cont Au
(Mt) (g/t) (Mt) (g/t) (Mt) (g/t) (Moz)
----------------------------------------------------------------------------
New Reserve 69.1 1.37 90.1 1.41 159.3 1.39 7.1
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Previous Reserve 64 1.38 78 1.43 142 1.4 6.4
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Note to Table: new reserve figure includes 1,167,798t @ 0.74g/t
for 27,762ozs in the proven category
The current reserve has been calculated from a Measured and Indicated resource
of 210Mt at 1.5g/t Au for 10.2 million ounces. A total Measured and Indicated
resource increase of 0.80 Million ounces has resulted in a 0.60 Million ounce
increase in total reserves.
The Sukari pit is being developed in a number of stages and the mining and
processing schedule developed for Sukari uses an elevated cutoff grade through
the early years to increase the head grade to the processing plant. It is
currently assumed that the material between this elevated cutoff grade and the
cutoff grade used for the Mineral Reserve estimate is stockpiled and treated at
the end of the project life.
EXPLORATION
During the quarter, resource definition drilling continued to be mainly
concentrated in the Pharaoh zone north of 11300N, following the high grade Hapi
Zone at depth, deeper Hapi zones at the basal porphyry contacts, the west
dipping high grade shear zone basal porphyry contact at the eastern margins and
other mineralised structures within the porphyry (Figure 2). Drilling also
occurred in the south of the Sukari porphyry from Wadi Fault testing the along
strike continuity of the Amun Deeps porphyry blocks and mineralisation, Hapi
Zone and Downthrust Zone from 10800N northwards.
Several encouraging high grade assay intersections have been returned from the
Pharaoh Zone in the targeted Hapi Zone, deeper Hapi and eastern basal porphyry
contact zones (Figure 2), and deep drilling in the Ra Zone between 10800N and
11000N intersected high grade porphyry blocks in the Amun Deeps and Downthrust
zones. Results have significantly increased the resource base and advanced
understanding of the complex controls on gold mineralisation along strike and at
depth.
The drilling continues to show the high grade Hapi and related zones extend from
the far south Amun Zone north to the area of current drilling in the Ra and
Pharaoh zones. These zones, along the entire strike length of the Sukari Hill
(2.5km), are the target of current infill and extension drilling with eight
diamond coring rigs.
To view Figure 2, please visit the following link:
http://media3.marketwire.com/docs/sukariFig2.pdf
REGIONAL EXPLORATION
Work continued on the Quartz Ridge prospect, with RC drilling having completed
16 holes for 1,436m. A further 10 holes for approximately 1400m remain.
Significant mineralisation has been intersected in north-south orientated
drilling intersecting the quartz reef at 10m to 60m below wadi level. As
predicted from the surface results, gold is focused in the quartz reef with
minor mineralisation occurring as a weak alteration geochemical halo in the
wallrock adjacent to the vein. Drilling is continuing.
CORPORATE
Following completion of due diligence during the quarter, the Company was
admitted to the Official List of the UK Listing Authority and commenced trading
on the London Stock Exchange's Main Market for listed securities on 06 November
2009.
The Company had earlier announced its intention to be removed from the
Australian Securities Exchange ("ASX") official list. The application for
removal from the ASX official list was announced in October 2009 in an effort to
streamline listing and compliance costs. Removal from the ASX official list
occurred on 29 January 2010.
At the Annual General Meeting on 27 November 2009, Mr Sami El-Raghy announced he
would be stepping down as the Chairman of Centamin and as a member of the Board
on 31 December 2009 to pursue new personal endeavours and challenges. Sami has
overseen a successful transformation of the Company from a mining exploration
company into a significant gold producer. Mr Gordon Brian Speechly also stepped
down from the Board on 31 December 2009 due to other work commitments. Mr
Speechly has been a director of the Company since 15 August 2000. Further
appointments to the Board are currently being considered.
The Company remains debt free, unhedged and able to aggressively pursue further
exploration and development activities, including the underground development of
the high grade Amun Deeps Zone.
On behalf of Centamin Egypt Limited
Josef El-Raghy, Managing Director/CEO
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.
Table 1 - Significant Intersections from the Sukari Gold Project
- December 2009 Quarter
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HOLE NORTH EAST DIP AZI EOH FROM TO INTERVAL AUAR1
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D1470 11300 10948 -85 270 584.8
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incl. 326 327 1 16.1
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incl. 530 531 1 19.0
---------------------------------------------------------------------------
---------------------------------------------------------------------------
D1471 10900 10945 -63 270 991.2 804 823 19 13.7
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incl. 817 818 1.3 172.0
---------------------------------------------------------------------------
incl. 821 822 1 27.2
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---------------------------------------------------------------------------
D1474 10850 10955 -67 270 899.2 359 361 2 11.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------
D1475 11425 10890 -86 270 698.5
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incl. 352 353 1 12.7
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D1476 11750 10867 -84 270 623.8
---------------------------------------------------------------------------
incl. 578 579 1 18.0
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D1479 10700 10827 -68 270 778.5
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incl. 561 562 1 108.0
---------------------------------------------------------------------------
---------------------------------------------------------------------------
D1482 11750 10866 -63 270 653.8
---------------------------------------------------------------------------
incl. 40 41 1 10.3
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incl. 612 614 2 26.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------
D1485 10825 10791 -66 270 611.4
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incl. 513 514 1 16.3
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D1492 11675 10813 -85 270 658.3
---------------------------------------------------------------------------
incl. 647 648 1 51.5
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---------------------------------------------------------------------------
D1494 11450 10913 -87 270 637.8
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incl. 313 316 3 18.26
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Note: Intervals shown in the table are down hole intercepts, drilled at
high angles relative to the internal mineralized structures and the Sukari
Porphyry; true widths do not apply or are not used in drilling the
stockwork style mineralization at Sukari
ABN 86 007 700 352
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