Centamin Egypt Ltd
Gold Project: 9.39 Moz Measured and Indicated, Plus 3.5 Moz Inferred
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Dear Agoracom Family,
I want to thank all of you for your patience with us over the past 48 hours and apologize for what was admittedly a botched launch of our new site.
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Message: Reports on Activities in the Quarter Ended December 31, 2009
| February 12, 2010 | ||||
| Centamin Egypt Reports on Activities in the Quarter Ended December 31, 2009 | ||||
|
TORONTO, ONTARIO--(Marketwire - Feb. 12, 2010) - 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
"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 ----------------------------------------------------------------------------
% Change
Unit Measure Dec 2009 Sept 2009 Dec vs. Sept
Quarter Quarter Quarter
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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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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
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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
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0.7 56.25 1.82 95.75 1.91 152.00 1.88 9.18 47.2 2.0 3.1
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1 36.65 2.35 63.59 2.45 100.24 2.42 7.78 31.2 2.6 2.7
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Note to Table: Figures in table may not add correctly due to rounding
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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. ----------------------------------------------------------------------------
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 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 |
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