31st Jan 2006 10:05
Centamin Egypt Limited31 January 2006 Centamin Egypt Limited ("Centamin Egypt" or "the Company") 2nd Quarter Results to 31 December 2005 Highlights • Sukari JORC compliant resource upgrade to 4,493,882 ounces • Increase of 1,431,173 ounces or 47% • Mineralisation remains open to north, south and down dip • Cost per ounce discovered for current drilling programme, US$3 • Feasibility Study continues • Company receives Outstanding Performance Award from the Egyptian Government • Significant drill intersections for the quarter:- RCD 370 74.5m @ 4.63 g/t RCD 388 30m @ 3.65 g/t RCD 388 24m @ 9.70 g/t RCD 391 14m @ 3.93 g/t RCD 391 35m @ 4.21 g/t DDH 395 1m @ 573.00 g/t RCD 402 8m @ 9.09 g/t RCD 402 4m @ 14.02 g/t RCD 406 41m @ 3.69 g/t DGT 408 26m @ 4.23 g/t DDH 410 72m @ 2.30 g/t RCD 413 5m @ 19.21 g/t RCD 415 10m @ 3.64 g/t RCD 415 17m @ 2.56 g/t RCD 416 23m @ 6.92 g/t RCD 420 38m @ 2.62 g/t RCD 421 10m @ 3.54 g/t SUKARI PROJECT Resource Modelling Resource modelling and grade estimation of the Sukari geological resource wasrecently completed to JORC standards by independent resource consultants,Hellman & Schofield. The resource has been calculated from 451 diamond and RC holes for a total of86,581 metres of drilling up to the beginning of November 2005, an increase ofapproximately 20,000 metres from the current program, and is as follows:- Gold Resource Estimate by Category Cut-off Measured & Indicated Inferred Total g/t Mt g/t Moz Mt g/t Moz Mt g/t Moz July 0.5 26.4 1.42 1.20 16.9 1.54 0.84 43.3 1.47 2.042002 1.0 13.5 2.09 0.91 8.7 2.33 0.65 22.2 2.18 1.56 April 0.5 40.5 1.32 1.71 24.1 1.59 1.23 64.5 1.42 2.942003* 1.0 20.4 1.91 1.25 13.0 2.32 0.97 33.4 2.07 2.22 December 0.5 65.57 1.47 3.10 25.2 1.7 1.38 90.78 1.54 4.492005 1.0 34.24 2.16 2.38 13.9 2.5 1.12 48.12 2.27 3.51 * Includes cut grades for the high-grade Hapi ShootNotes: Due to rounding total figures may not reconcile No drilling took place from April 2003 to April 2005 The measured resources lie in areas where drilling data is available at anominal 25 x 25 metre spacing, indicated resources are approximately 25 x 50metre spacing and inferred resources in areas of broader spaced drilling. Theresources are estimates of recoverable tonnes and grades using MultipleIndicator Kriging with block support correction. The resource model extends from9900mN to 11000mN and to a maximum depth of 600RL (approximately 550 metresbelow surface). As part of the resource upgrade, an assessment of all QA-QC work was carried outon data collected during 2005, to check the sample quality used to determine theresource. All QA-QC checks display that sampling procedures at Sukari are of ahigh standard including:- • Standard samples all preformed well and within acceptable limits; • Blank samples all performed well, indicating that the sample preparation at Sukari is being carried out properly; • The pulverized material from Sukari is ground consistently to over 95% of particles passing 75 micron; • Au1 v Au2 repeatability is at the industry standard for Bankable Feasibilities; 90% of data with a HARD value of 10. The AuAR is performing very well compared to the Fire Assay; • RC re-splits, diamond duplicates and crushed samples also perform well; • Diamond core recovery compared to gold grade, displays there is no significant correlation between grade and core recovery. Resource Drilling Programme Drilling during the December quarter focused on:- • Defining the extension of the wadi covered porphyry south of Sukari Hill; • Infill drilling of the Amun zone; • Definition of hangingwall porphyries; • Ra zone step out drilling; • Testing of mineralisation below the planned pit floor; • Development of tracks along the western side of the Sukari Porphyry from 11000N to 12200N (1.2km). Defining the extension of the wadi covered porphyry south of Sukari Hill Drilling was carried out on the wadi floor up to 100 metres south and to theeast of the Sukari outcrop between 9950N and 10100N which confirmed thecontinuity of the porphyry and also encountered extensive intersections of highgrade mineralisation (RCD 370 (10025N) - 4 metres @ 5.09 g/t, 74.5 metres @ 4.63g/t, 10 metres @ 2.48 g/t and 4 metres @ 3.4 g/t). Mineralisation was intersected in drill holes RCD370 (10025N), RCD416 (10000N),RCD383 (9950N), RCD384 (9975N). Mineralisation is related to intense sulphide and sericite veining within thealtered porphyry, relatively high percentage of arsenopyrite and pyrite arepresent in the core. More drilling is planned in this area, as drilling has notfully tested the potential of the continuation of the mineralised porphyry unitsouth of 9950N. Infill drilling with the Amun zone around the Main Reef Drill holes tested the upper portion of the Amun zone between 10250N and 10375N,which previously had limited drilling due to a lack of drill access. Drillingconfirmed the strike and dip continuity of the high grade historic Main Reef,previously worked by the ancients. Drill Holes 394, 399, 400, 401, 405, 406, 408, 413, 414, 415 intersected highgrade mineralised zones related to the Main Reef, the style of mineralizationwithin the vein varies from a laminated to a brecciated quartz vein, adjacent tothe quartz vein gold is related to sericite alteration and stockworkmineralization. Definition of hangingwall porphyries The value of the infill hangingwall targeted drill holes been highlighted fromthe results received from D 407B and D 411. Results show a very steephangingwall contact and some significant grades in porphyry at the hangingwallcontact for section 10325N, where little information or resource blocks wereshown previously. Ra zone drilling Holes were drilled in the Ra zone from 10875N to 11175N, gold mineralisation isrelated to quartz veining and alteration of the porphyry, with kaolinite andsilica the main alteration minerals. Mineralization is well displayed in thebroad runs of gold mineralisation as displayed by holes D 410, RCD420 and RCD421. Step out drilling below the planned pit floor Holes drilled to target down dip extensions of gold mineralisation and the mainporphyry unit at greater depths (RCD386, RCD388, RCD389, RCD391, D395, RCD402)shows that mineralization, the main porphyry and geological structures continuedown dip at depth and are often associated with high grades. Gold is related to typical Sukari mineralisation assemblages, that beingshearing, quartz veining, stockworks and alteration, typically sericite withzones of kaolinite. The ore body is still open along strike to the south and north and down dip tothe east at depth. Access Tracks and Rock-breakers Five rock breakers were at work at Sukari during December. Tracks for drillingaccess, a road to the proposed tailings dam and test pits were completed. Upper Gazelle was completed to 10950N. Accra, Pharaoh, Upper Pharaoh and Miketracks were developed. FEASIBILITY STUDY During the quarter work continued with Ausenco on the Bankable Feasibility Study(BFS) into the development of a 4 to 5 million tonne per annum processingfacility. The Scoping Study was completed in late December and has concluded that theflotation process, with lower estimated capital and operating costs and higherestimated recovery, can provide better economics compared to the whole of oreCIL process option. Furthermore it has been concluded that the 4 Mtpa flotationprocess route is economically more attractive as the significant additionalcapital cost required for the 5 Mtpa plant is not matched by current forecastproject returns. Gold recovery in the flotation process is however sensitive to the degree ofsulphide mineral oxidation and weathering of the ore. This process optiontherefore requires additional metallurgical information on the extent ofweathering in the ore so as to address the issues associated with the interfacebetween the geology interpretation and metallurgical performance of theweathered material. The study has proposed a review of the weathering codes andadditional testwork based on the outcome of that review. It is planned to undertake this additional metallurgical testwork in parallelwith engineering and estimating for the design of a flow sheet for flotationplus leaching of flotation tails and leaching of reground concentrate. The feasibility study is due for completion in the second quarter of this year. CORPORATE ACTIVITIES On the 26th of September, Mr Stuart Bottomley was appointed as a director of theCompany. Mr Bottomley worked as a portfolio manager for over twenty years, firstlywith the "Target Group" of unit trusts and subsequently with FidelityInternational. For the last twelve years, he has acted as a consultant to anumber of private and public companies with a growing emphasis on the miningindustry. In November, the Annual General Meeting of shareholders was held in London forthe first time, with a very strong attendance, reflecting the significantownership by UK and European investors. Based on this success it is intended tohold future meetings in the UK. During the quarter, the Company's wholly owned subsidiary, Pharaoh Gold Mines NLand one of its Egyptian geologists, Mr Ismail Abd El-Khalek were honored withawards for outstanding performance during 2005. These awards were presented byHis Excellency, Engineer, Sameh Fahmy, the Minister for Petroleum and MineralResources, on behalf of the Egyptian Government, acknowledging the Company's andMr Ismail Abd El-Khalek's contribution and commitment to the Egyptian mineralsindustry. During December, the Australian Ambassador to Egypt, Mr Robert Bowker visitedthe Sukari site with the Company's Chairman, Mr Sami El-Raghy. The visit formspart of the Company's policy of keeping the Australian Embassy informed withrespect to the Company's progress and activities in Egypt and ensuring a goodworking relationship. For Centamin Egypt Limited Josef El-RaghyManaging Director/CEO31 January 2006 For more information please contact: Centamin Egypt Limited or Bishopsgate Communications LtdTel: (08) 9316 2640 Fax: (08) 9316 2650 Tel: 020 7430 1600Josef El-Raghy ([email protected]) Maxine Barnes +07860 489 571Heidi Brown ([email protected]) Dominic Barretto +07930 450 156 http://www.centamin.com/ http://www.bishpsgatecommunications.com/ Information in this report which relates to exploration, geology, sampling anddrilling is based on information compiled by geologist Mr R Osman who is a fulltime employee of the Company, and is a member of the Australasian Institute ofMining and Metallurgy with more than five years experience in the fields ofactivity being reported on, and is a 'Competent Person' for this purpose. Hiswritten consent has been received by the Company for this information to beincluded in this report in the form and context which it appears. The information in this report that relates to mineral resources is based onwork completed by Mr Nicolas Johnson, who is a Member of the AustralianInstitute of Geoscientists. Mr Johnson is a full time employee of Hellman andSchofield Pty Ltd and has sufficient experience which is relevant to the styleof mineralisation and type of deposit under consideration and to the activitywhich he is undertaking to qualify as a Competent Person as defined in the 2004edition of the "Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves". Mr Johnson consents to the inclusion in the reportof the matters based on his information in the form and context in which itappears. Assay Intersections During the December Quarter 2005 Hole Northing Easting Azimuth Dip Length From To Interval Grade RCD370 10025 10518 270 -88 302.9 133 137 4 5.09 149.5 224 74.5 4.63 230 240 10 2.48 D371 10850 10427 270 -90 110.82 34 39 5 5.57 RCD372 10050 10528 270 -70 251 192.9 206 13.15 3.56 RCDGT376 10080 10509 270 -63 210 47 51 4 3.70 RCDGT378 10230 10512 266 58 239.8 80 180 100 1.75 DGT379 10525 10572 270 -60 310.4 129 138 9 2.90 159 165 6 4.12 184 185 1 20.50 DGT382 10601 10558 272 -62 340 208 229 21 2.20 RCD383 9946 10537 270 -70 295.1 190 196 6 7.71 235 242 7 8.48 RCD388 10300 10643 270 -81 349.7 244 274 30 3.65 incl 265 268 3 20.78 294 318 24 9.70 incl 295 296 1 185.00 incl 294 303 9 23.78 RCD391 10604 10832 270 -65 480.9 381 395 14 3.93 401 436 35 4.21 incl 425 426 1 20.20 RCD394 10263 10406 270 -60 115 69 80 11 2.08 D395 10750 10807 270 -55 480 196 207 11 2.86 352 353 1 573.00 371 378 7 2.77 RCDGT399 10299 10411 270 -60 180.1 77 81 4 5.88 RC401 10351 10402 270 -60 100 71 79 8 3.53 RCD402 10684 10858 270 -57 552 450 458 8 9.09 492 496 4 14.02 RCDGT405 10375 10401 270 -60 194.7 59 69 10 2.23 78 86 8 4.21 RCD406 10373 10450 270 -60 160 63 69 6 5.07 105 146 41 3.69 D407B 10325 10596 270 -60 251.05 167 202 35 1.52 DGT408 10255 10429 270 -60 296.6 92 118 26 4.23 246 248 2 13.55 D410 10871 10680 270 -75 528.1 104 110 6 3.91 128 129 1 21.60 325 397 72 2.30 443 450 7 5.78 D411 10925 10852 270 -20 343.82 47 55 8 2.59 RC413 10348 10438 270 -62 150 94 99 5 19.21 123 127 4 4.47 RCD414 10324 10434 270 -90 150 135 139 4 4.89 RC415 10300 10445 270 -60 150 95 105 10 3.64 112 129 17 2.56 RCD416 10000 10523 270 -83 306.6 159 172 13 2.80 212 235 23 6.92 incl 217 228 11 12.53 243 248 5 3.97 RCD420 11077 10801 270 -87 387 129 141 12 3.22 129 130 1 25.20 245 271 26 2.43 283 321 38 2.62 incl 283 296 13 3.01 incl 319 320 1 29.50 RCD421 11125 10769 270 -88 431.1 175 183 8 3.40 incl 176 178 2 10.77 208 215 7 3.32 305 315 10 3.54 incl 308 312 4 7.61 incl 356 358 2 7.14 RCD422 11176 10647 259 -88 422.9 206 208 2 7.38 RCD426 11118 10639 270 -70 472.8 187 188 1 7.84 RCD427 11070 10649 270 -87 370.4 128 131 3 4.89 RCD428 11070 10693 270 -70 602.8 115 122 7 2.11 RCD431 11084 10916 270 -88 237 0 5 5 5.00 incl 4 5 1 23.20 Rule 5.3 Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96. Origin : Appendix 8. Amended 1/7/98, 30/9/2001. Name of Entity Centamin Egypt Limited ABN Quarter ended ("current quarter") 86 007 700 352 31 December 2005 Consolidated statement of cash flows Centamin Egypt LimitedPharaoh Gold Mines NL (100%)Viking Resources Ltd (100%)North African Resources (100%) Cash flows related to operating activities Current Quarter Year to date $A'000 (6 months) $A'000 1.1 Receipts from product sales and related debtors1.2 Payments for (a) exploration and evaluation (2,781) (4,541) (b) development (120) (219) (c) production - - (d) administration (258) (434)1.3 Dividends received - -1.4 Interest and other items of a similar nature received 176 4051.5 Interest and other costs of finance paid - -1.6 Income taxes paid - -1.7 Other (provide details if material) - - Net Operating Cash Flows (2,983) (4,789) Cash flows related to investing activities 1.8 Payment for purchases of (a) prospects - - (b) equity investments - - (c) other fixed assets (99) (249)1.9 Proceeds from sale of (a) prospects - - (b) equity investments - - (c) other fixed assets - (6)1.10 Loans to other entities *(Refer Note 1) (3,000) (5,010)1.11 Loans repaid by other entities - -1.12 Other (provide details if material) - - Net investing cash flows (3,099) (5,265)1.13 Total operating and investing cash flows (carried forward) (6,082) (10,054)1.14 Proceeds from issues of shares, options, etc. 130 1301.15 Proceeds from sale of forfeited shares - -1.16 Proceeds from borrowings *(Refer Note 1) 3,000 5,0101.17 Repayment of borrowings 158 1581.18 Dividends paid - -1.19 Other (provide details if material) - - Net financing cash flows 3,288 5,298 Net increase (decrease) in cash held (2,794) (4,756) 1.20 Cash at beginning of quarter/year to date 15,907 17,9461.21 Exchange rate adjustments to item 1.20 43 (34)1.22 Cash at end of quarter 13,156 13,156 *Note 1 - From the March 2004 Quarter onwards, the funding of explorationexpenditure by the Holding Company to its subsidiaries is also disclosed as aninter-entity loan under sections 1.10 and 1.16 respectively. Payments to directors of the entity and associates of the Current quarterdirectorsPayments to related entities of the entity and associates of $A'000the related entities 1.23 Aggregate amount of payments to the parties included in item 1.2 239,792 1.24 Aggregate amount of loans to the parties included in item - 1.10 1.25 Explanation necessary for an understanding of the transactions - Salaries, superannuation contributions, consulting and directors fees paid to Directors during the quarter amounted to $207,806. - Mr S El-Raghy and Mr J El-Raghy are Directors and shareholders of El-Raghy Kriewaldt Pty Ltd ("ELK"), which provides office premises to the Company in Australia. All dealings with ELK are in the ordinary course of business and on normal terms and conditions. Rent paid to ELK during the quarter amounted to $13,263. - Mr S El-Raghy provides office premises to the Company in Alexandria, Egypt. All dealings are in the ordinary course of business and on normal terms and conditions. Rent paid during the quarter amounted to $5,931. - Mr C Cowden, a non-executive director, is also a director and shareholder of Cowden Limited, which provides insurance broking services to the Company. All dealings with Cowden Limited are in the ordinary course of business and on normal terms and conditions. Insurance premiums paid to Cowden Limited during the quarter amounted to $12,792. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows - 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest - Financing facilities availableAdd notes as necessary from an understanding of the position. Amount available Amount used $A'000 $A'000 3.1 Loan facilities - - 3.2 Credit standby arrangements - - Estimated cash outflows for next quarter $A'000 4.1 Exploration and evaluation 3,350 4.2 Development 650 Total 4,000 Reconciliation of Cash Reconciliation of cash at the end of the Current quarter Previous quarterquarter (as shown in the consolidated $A'000 $A'000statement of cash flows) to the relateditems in the accounts is as follows. 5.1 Cash on hand and at bank 940 849 5.2 Deposits at call 931 1,051 5.3 Bank overdraft - - 5.4 Term deposits 11,285 14,007 Total: cash at end of quarter (item 1.22) 13,156 15,907 Changes in interests in mining tenements Tenement Nature Interest at Interest at reference of interest beginning of end of quarter quarter (note (2)) 6.1 Interest in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased Issued and quoted securities at end of current quarterDescription includes rate of interest and any redemption or conversion rightstogether with prices and dates. Total number Number Issue price Amount paid quoted per security up per security (see note 3) (see note 3) (cents) (cents)7.1 Preference +securities (description) 7.2 Changes during quarter (a) increases through issues (b) decreases through returns of capital, buy-backs, redemptions7.3 +Ordinary securities 502,560,369 502,560,3697.4 Changes during 500,000 500,000 (See 7.9 below) (See 7.9 below) quarter (a) increases through options exercise (b) decreases through returns of capital, buy-backs7.5 +Convertible debt securities (description)7.6 Changes during quarter (a) increases through issues (b) decreases through securities matured, converted7.7 Options Employee Exercise price Expiry date (description Option Plan and conversion 2002 factor) 760,000 Nil 23.10 cents 12/11/2006 130,000 Nil 23.10 cents 17/11/2006 750,000 Nil 35.49 cents 15/12/2006 775,000 Nil 28.04 cents 04/02/2008 410,000 Nil 28.04 cents 17/02/2008 4,250,000 Nil 35.00 cents 31/10/2010 1,500,000 Nil 43.55 cents 08/12/2008 7.8 Issued during quarter 4,250,000 Nil 35.00 cents 31/10/2010 1,500,000 Nil 43.55 cents 08/12/20087.9 Exercised during 250,000 29.00 cents 11/11/2005 quarter 250,000 23.10 cents 12/11/20067.10 Expired/ lapsed during quarter7.11 Debentures (totals only)7.12 Unsecured notes(totals only) Compliance statement 1. This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4). 2. This statement does give a true and fair view of the matters disclosed. Heidi BrownCompany Secretary Date: 31 January 2006 Notes 1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2. The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2. 3. Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4. The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report. 5. Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Centamin PLC