Final Results

28th Sep 2007 14:51

Centamin Egypt Limited28 September 2007 CENTAMIN EGYPT LIMITED ABN 86 007 700 352 ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 Centamin Egypt Limited ("the Company") is pleased to provide extracts of theCompany's Annual Report for the year ended 30 June 2007. The printed version ofthe Annual Report is expected to be posted to shareholders who are registered asat 22 October 2007, on 23 October 2007. In addition the Company's Annual Information Form (AIF) has been lodged with theAustralian Securities Exchange and is in the process of being lodged with theCanadian Securities Administrators. Both documents can be downloaded in full from the Company's websitewww.centamin.com. COMPANY PARTICULARS_______________________________________________________________________________ DIRECTORS Mr Sami El-Raghy, ChairmanMr Josef El-Raghy, Managing Director/CEOMr Colin Cowden, Non Executive DirectorMr G Brian Speechly, Non Executive DirectorDr Thomas Elder, Non Executive DirectorMr H Stuart Bottomley, Non Executive Director COMPANY SECRETARYMrs Heidi Brown CHIEF FINANCIAL OFFICERMr Mark Smith PROJECT MANAGERMr Robert Sinclair GENERAL MANAGER - EGYPTMr Youssef El-Raghy HEAD OFFICE EGYPT OFFICE57 Kishorn Road 361 El-Horreya RoadMount Pleasant, Western Australia, 6153 Sedi GaberTelephone: + 61 8 9316 2640 Alexandria, EgyptFacsimile: + 61 8 9316 2650 Telephone: + 203 5411 259Email: [email protected] Facsimile: + 203 5226 350Website: www.centamin.com Email: [email protected] BANKERSAustralia United KingdomNational Australia Bank Limited Clydesdale Bank Plc50 St Georges Terrace 50 Lothian RoadPerth WA 6000 Edinburgh EH3 9BY Egypt EgyptMISR International Bank Commercial International Bank54 Elbatal Ahmed Abdel Aziz Street Marsa Alam BranchCairo, Egypt Marsa Alam, Red Sea, Egypt AUDITORS UK NOMINATED BROKER & ADVISORAustralia Evolution Securities LimitedDeloitte Touche Tohmatsu 100 Wood StreetLevel 14, Woodside Plaza London EC2V 7AN240 St Georges Terrace United KingdomPerth WA 6000 LOCATION OF REGISTERS OF SECURITIESAustralia United KingdomComputershare Investor Services Pty Ltd Computershare Investor ServicesLevel 2, 45 St Georges Terrace PO Box 82 The Pavilions, Bridgwater RoadPerth WA 6000 Bristol BS99 7NH EnglandTelephone: + 61 8 9323 2000 Telephone: + 44 0870 702 0003Facsimile: + 61 8 9323 2033 Facsimile: + 44 0870 703 6116 CanadaComputershare100 University Avenue, 8th FloorToronto, Ontario, ON M5J 2Y1Telephone: + 1 416 263 9311Facsimile: + 1 416 981 9777 STOCK EXCHANGESThe Company is listed on the Australian Securities Exchange (ASX), the AIMMarket of the London Stock Exchange (AIM) and the Toronto Stock Exchange (TSX).The Home Exchange is Perth. CHAIRMAN'S REPORT Dear Shareholders It is my pleasure to present to you the annual report of the Company for theyear ended 30 June 2007. Centamin has evolved significantly during 2006 and 2007, with severalsignificant achievements providing the conduit for the Company's continuingprogress from an explorer to a mid tier gold producer/explorer with considerableexploration potential yet to be realised. This transformation has been recognised by the international investmentcommunity which has in turn resulted in substantial equity capital investment inthe Company and consequently considerable growth in shareholder value asevidenced by the Company's market capitalisation increasing by 98% during theyear under review. This support from the investment community has occurred because the Company hasmanaged to identify and acquire a substantial land holding in what we believewill in time prove to be a gold province of world standard and also because wehave assembled a team of high quality personnel with the necessary skills tobring the Sukari Project into production. It is worth noting that the current Mineral Resource comprises 6.84 Moz Measuredand Indicated, plus 3.6 Moz Inferred ounces of gold and has been discovered atan impressively low cost of - US$5.00 per ounce. The development of the Sukari Project is occurring during a time of considerableactivity in the resources sector which in turn has placed significant pressureon all inputs to the development of the project, however I am pleased to reportthat the development of the Company and the Sukari Project look just asimpressive from within the Company as they obviously also do to the investmentcommunity at large. The achievements during the year include:- • Completion of the Definitive Feasibility Study for the development of the Sukari Project and commencement of construction • The purchase and dismantling for shipment of the Kori Kollo Processing Plant in Bolivia • The purchase and dismantling for shipment of a second hand 28MW Heavy Fuel Oil power plant in Turkey • Completion of C$151m Equity Raising and TSX listing • Current Mineral Resource containing 6.84 million ounces of gold Measured and Indicated, plus 3.6 million ounces of gold Inferred, an increase of 3.7 million ounces (2.52 Moz Measured and Indicated and 1.1 Moz Inferred) during the period • Appointment of Barclays Capital as Mandated Lead Arranger to finance up to US$100 million for project development • Environmental approval received • Owners development team assembled During the year, the Company made two significant and assertive strategicdecisions as a consequence of the current rampant activity within the resourcessector. The first decision was to discontinue with the services of aninternational engineering and project management group engaged on thepre-feasibility study and replace them with an in-house owner's team. Secondly, the Company is now seeing the considerable benefits of seeking out andpurchasing both the Kori Kollo processing plant and the heavy fuel oil powerplant and also to have had the foresight to commit to the purchase of long leadtime critical items such as the mining fleet. The Company's Sukari development schedule and key dates covering all phases ofthe project are listed below: Construction Camp Q4 2007 Commence Site Works Q4 2007 Kori Kollo Plant Arrives Egypt Q4 2007 Project Finance Q4 2007 Commence Tailings Storage Facility Q1 2008 Commence Mining Pre-strip Q1 2008 Commissioning and Production Q4 2008 Although construction has commenced at Sukari, the Company has continued itsdrilling programme utilising the nine rigs that are currently on site and hasalso stepped up regional exploration outside of the Sukari mine corridor andwithin the 160 km2 Sukari Mining Concession. As such we are very confident that the number of minable ounces will increasewell beyond the current forecast annual production of 200,000 ounces of goldfrom a 15 year mine life. In closing, I thank my co-directors for their contributions during a very activeyear, in particular our Managing Director/CEO, Josef El-Raghy, his managementteam and all our loyal and dedicated staff. On behalf of the Board of Directors. Sami El-RaghyChairman Perth, 27 September 2007 REVIEW OF operations Sukari Gold Project Sukari Gold Project - Background Centamin Egypt Limited ("Centamin" or "the Company") is a mineral explorationand development company, listed on the Toronto Stock Exchange (TSX : CEE), theAustralian Securities Exchange (ASX : CNT) and the AIM Market of the LondonStock Exchange (AIM : CEY), and has been actively exploring in Egypt since 1995,via its wholly owned subsidiary company, Pharaoh Gold Mines NL ("PGM"). TheCompany's principal asset is its interest in the Sukari Gold Project, located inthe Eastern Desert of Egypt. The Sukari Gold Project is at an advanced stage ofdevelopment, with construction having commenced in the second quarter of 2007and first gold production expected during the fourth quarter of 2008. The SukariGold Project will be the first large-scale modern gold mine to be developed inEgypt. Centamin's 12 year operating experience in Egypt gives it a significantadvantage in acquiring and developing other gold projects in the prospectiveArabian-Nubian Shield. A definitive feasibility study (the "DFS") for the development to commercialproduction of the Sukari Gold Project was completed in February 2007 and wasbased on a geological resource containing 4.3 million measured and indicatedounces (currently 6.84 million ounces - see Table 1). A summary of the findings of the DFS were: • the DFS concluded that a 4 million tonne per annum ("Mtpa") plant producing on average 200,000 ounces per annum, over 15 years of mining, is economically robust; and • total Capital Construction costs are estimated at US$216m with average cash operating costs of US$290/oz (inclusive of 3% royalty) over the 15 year mining period. Sukari is a large, sheeted vein-type and brittle-ductile shear zone hosted golddeposit developed in a granitoid intrusive complex. Gold mineralisation ishosted exclusively by a granitoid body of approximately granodiorite - tonalitecomposition referred to as the Sukari Porphyry. The Company operates in Egypt under a Concession Agreement ("CA") with theEgyptian Government that provides for exploration and exploitation rights at theSukari Gold Project. Under the terms of the CA, an operating company, SukariGold Mines ("SGM"), owned 50% by PGM and 50% by the Egyptian Mineral ResourceAuthority ("EMRA"), has been established to manage the Sukari Project. Centaminis entitled to recover all of its predevelopment exploration expenditure andoperating and capital costs from SGM's operating surplus prior to any splittingof operating surplus. All sustaining capital and future exploration is alsorecoverable. All funding and management rests solely with PGM. The Sukari Mining License covers an area of 160 km2 and was granted in May 2005for an initial period of 30 years with an option for a further 30 years. Thelicence area contains several other historical gold mines and recent regionalexploration programmes have identified several additional targets within closeproximity of Sukari that are now the subject of a planned drilling campaign. The Sukari Gold Project DFS was based on scheduled open pit mining over aninitial 15-year period. During that time 78 Mt ore @ 1.5 g/t Au is expected tobe mined, producing 3.7 Moz of gold. A further 374 Mt of waste material is alsoexpected to be mined resulting in a waste to ore ratio of 4.8:1. Ore and waste will be mined using conventional open pit mining methods. Theoperation is planned to utilize selective mining techniques to separate ore andwaste. Provision has been made for drilling and blasting all primary and oxidematerials. Ore will be hauled to the run of mine pad next to the processingplant and either direct tipped to the crusher or stockpiled for future reclaimat the 4 Mtpa process plant throughput rate. Mining will be progressed at an increased rate compared to processing;approximately 5 Mt of ore is expected to be mined and 4 Mt of ore will beprocessed annually. Operating at an increased mining rate allows the cut-offgrade for feed to the plant (referred to as "cutover" grade) to be increased inthe early years of the schedule. This in turn increases the metal output andproject revenue in these early years, thus increasing the discounted operatingsurplus cashflow. According to current schedules, the low-grade stockpileproduced as a result of applying a cutover grade, will be processed after mininghas ceased, extending the current operating life of the project for a furthersix years. As a result, the average milled grade during the mining period isforecast to be 1.87 g/t Au, compared to 0.66 g/t Au for the low-grade stockpile. Centamin will own and operate its mining fleet. The fleet will be based on 380 tclass excavators and 150 t class rigid body trucks. At full production, threeproduction fleets, each comprising a single excavator and sharing a maximum of21 trucks, will be required. The capital cost of the initial mining fleet hasbeen estimated at US$48.8 million. The proposed process route entails: • crushing; • stockpiling crushed ore; • grinding; • flotation of a (bulk sulphide) concentrate containing the precious metals; • thickening of the concentrate; • fine milling of the concentrate; • leaching the precious metals from the concentrate in a dilute cyanide solution; • absorbing the precious metals onto activated carbon; • stripping the precious metals from the carbon; • recovering the precious metals as gold dore; and • placing the concentrate tailing in the tailings storage facility. Tailings from the treatment of weathered oxide ore early in the mining schedulecontain too much gold to discard. Hence, the bulk flotation tail is furthertreated by: • thickening; • leaching the precious metals into a dilute cyanide solution; • adsorbing the precious metals onto activated carbon; • stripping the precious metals from the carbon; • recovering the precious metals as gold dore; and • placing these tailings in the tailings storage facility. Process water will be drawn from the Red Sea. The seawater will be pumpedapproximately 25 km to the mine site to satisfy all process plant and miningrequirements. Most of the seawater will be pumped into a raw water pond locatednear the processing plant, whilst around 500m(3)/day will be pumped to a watertreatment plant for potable and fresh water supplies. Power will be generated on site by a 28 MW power station, operated on heavy fueloil. A temporary construction camp facility will be required to cater forapproximately 630 construction employees and 70 senior staff. This will beconstructed at the Sukari Gold Project. An overall schedule has been developed covering all phases of the project; keydates are listed below: Project Go-Ahead Decision Feb 2007 (Completed)Construction Camp Q4 2007Commence Site Works Q4 2007Kori Kollo Plant Arrives Egypt Q4 2007Project Finance Q4 2007 (Equity component complete)Commence Tailings Storage Facility Q1 2008Commence Mining Pre-strip Q1 2008Commissioning and Production Q4 2008 Project Development Funding During the second half of the financial year, the Company completed an investorroad show through London and North America with Westwind Partners Inc andEvolution Securities Limited. At the completion of this road show, the Companyplaced approximately 175m new shares to raise C$151m. The placing was heavilyoversubscribed. The Company subsequently completed a full TSX listing and sharesbegan trading on 05 April 2007. These equity funds will be applied to the Sukaridevelopment and represent the full equity component of the capital required totake the project into production. On 17 April 2007, the Company announced that Barclays Capital, the investmentbanking division of Barclays Bank PLC, was appointed as Mandated Lead Arrangerto finance up to US$100 million by way of a project loan facility. Together with the proceeds from the recently completed placement, this facilitywill complete the financing arrangements required for the development of theproject. The facility is subject to completion of due diligence and detaileddocumentation. The due diligence process commenced during April 2007 with the review of projectdata together with visits to site by key banking personnel. The Company is inreceipt of the project financing schedule from Barclays Capital and expects tocomplete the financing of the project in the fourth quarter of this year. Construction Camp A contract for the earthworks for a 700 man accommodation facility was awardedduring the quarter to an Egyptian company, CMS. Earthworks are complete andinstallation of buried services is 60% complete. A contract for installation ofthe sewage treatment plant is in progress and water storage tanks are in place. Two contracts for the construction of the camp buildings have been awarded totwo Egyptian contractors and construction is underway with the first rooms andkitchen/diner forecast to be available at the end of October 2007. Site Works Upgrading of the 10km access road to the Sukari site from the main highway hascommenced and is estimated to be 80% completed as at the end of August 2007. Earthworks have been completed for the mine lay down area for the mining fleet. Tailings Storage Facility Knight Piesold Pty Ltd has been appointed to carry out the design andconstruction supervision of the Tailings Storage Facility. Design work isongoing with Knight Piesold staff on site performing geotechnicalinvestigations. Final design and appropriate bid documentation will be completedduring the fourth quarter of 2007. Project Engineering and Design A contract for the engineering and design work for the process plant was awardedin mid-March 2007 to MetPlant Engineering Services Pty Ltd, an Australian-basedcompany. A technical team visited Bolivia in April 2007 to review the Kori Kolloprocessing plant dismantling progress, and then travelled on to Egypt in earlyMay to the Sukari plant site location. Data and information gathered from thesevisits will be used to finalise design and engineering work. Completion of thiswork is scheduled for the first quarter of 2008. An Egyptian engineering company, TCB Egypt, has been engaged to detail designand engineer the construction camp, kitchen-mess, desalination plant andsewerage treatment plant. The layout and design of the mine maintenance workshophas been finalised and construction bids received. Kori Kollo Process Plant As at the end of August, dismantling activities had been completed and all plantand equipment had been trucked to the port of Arica in Chile for onwardsshipping to Alexandria, Egypt. The Kori Kollo processing plant was acquired late last year from a subsidiary ofNewmont Mining Corporation for US$11 M and was located in the Andes Plains 200kmsouth east of the Bolivian capital of La Paz. Dismantling operations began in February 2007 utilizing Bolivian engineering andtransport groups. Large cranes for the project were mobilised from Argentina,Santa Cruz and La Paz. All activities were supervised by a construction team from Centamin. At the peakof activity, 280 personnel were involved in dismantling the facility whichrequired more than 200,000 man hours. The same group of construction supervisorsare now in the process of relocating to Egypt to re-assemble the processingplant. The first shipment of dismantled equipment commenced in June 2007 and largelyconsisted of equipment requiring refurbishment outside of Egypt prior toimportation to Alexandria and then site. After some 200 semi trailer loads, allplant and equipment has now been transported across the Bolivian border to theChilean port of Arica. Ship loading has taken place and arrival into Egypt is scheduled for the fourthquarter of 2007. Mining Equipment Caterpillar, through their Egyptian authorised dealer Mantrac, has been selectedas the supplier of haulage trucks, excavators, graders and dozers. The initialmining fleet will largely comprise: CAT 365 BLME Excavator (1)RH 120E Excavator (1)CAT 785C Rear Dump Truck (5)CAT 14H Grader (1)CAT 834H Wheel Dozer (2)H180D Rock Breaker (1)CAT 16M Grader (1)CAT D10 Dozer (2) Atlas Copco has been selected to supply grade control and blast hole drillingequipment. Initial fleet selection comprises: ROC F9 Pioneer Drill (1)L8 MKII Production Drill (1)L8 MKII RC Rig (1) Initial deposits have been paid and the rigs have arrived into the Port ofAlexandria, with mining activity schedule to commence in the fourth quarter of2007. Power Station A second-hand Caterpillar, 28MW Heavy Fuel Oil power plant which is currentlylocated in Turkey, has been acquired. The purchase of this critical path itemhas removed a significant amount of project risk from the completion time lineschedule and will also represent a material saving on the budgeted capitalexpenditure amount in the DFS. A contract for the dismantling, packing and transportation within Turkey hasbeen awarded to Magdenli, a Turkish transport company, and a small Centamin teamis currently in Turkey overseeing these activities. Dismantling and packing ofthe power plant is proceeding according to schedule, and it is anticipated thatthe plant will arrive in Egypt in the coming month. Maintenance support in Egypt for the power plant engines will be provided by thelocal Caterpillar dealer, Mantrac who are also supplying and maintaining themining fleet. Owners Team and Operations Personnel The Company's organisational structure continues to grow with several keyappointments having been made. In a booming resource market, the Company is verypleased with the quality of the personnel that have been attracted to theproject and the positions below have now been filled. The Company will continuewith its large "owners team" approach. - Project Manager- Deputy Project Manager (HSE/Infrastructure)- Construction Manager- Construction Supervisor- GIS & Data Base Manager- Senior Surveyor- Mining Manager- Senior Mine Engineer- Mill Superintendent- Logistics Manager- Power Plant Superintendent- Engineering Manager- Project Controller- Manager Procurement Services- Purchasing Officer- Operations Superintendent- Drill & Blast Supervisor- Mine Training Supervisor- Production Supervisors- Chief Mine Geologist Resource Estimation The Sukari Mineral Gold Resource has grown strongly during the year to be148.45Mt @ 1.43g/t Au for 6.84 Moz Au Measured and Indicated, and 64.4Mt @ 1.7g/t for 3.6 Moz Inferred, at a 0.5g/t Au cut off grade (Table 1). Several resourceupgrades were issued throughout the year, showing a steady and consistentincrease of approximately 250,000oz every month for a total increase since thelast annual report of 3.7 Moz (2.52 Moz Measured and Indicated, and 1.1 MozInferred). Table 1 - Current Sukari Project Mineral Resource Estimate +-------------------------------------------------------------------------------------------+| Mineral Resource (September 2007) |+---------+---------------------+-------------------+--------------------+------------------+| | | | Total | || | Measured | Indicated | (Measured + | Inferred || | | | Indicated) | || Cut-off +---------+-----+-----+-------+-----+-----+--------+-----+-----+------+-----+-----+| | Mt | g/t | Moz | Mt | g/t | Moz | Mt | g/t | Moz | Mt | g/t | Moz |+---------+---------+-----+-----+-------+-----+-----+--------+-----+-----+------+-----+-----+| 0.5 | 57.43 |1.40 | 2.6 | 91.02 |1.45 | 4.2 | 148.45 |1.43 |6.84 | 64.4 | 1.7 | 3.6 |+---------+---------+-----+-----+-------+-----+-----+--------+-----+-----+------+-----+-----+| 0.7 | 41.13 |1.72 | 2.3 | 65.46 |1.79 | 3.8 | 106.59 |1.76 |6.04 | 47.6 | 2.2 | 3.3 |+---------+---------+-----+-----+-------+-----+-----+--------+-----+-----+------+-----+-----+| 1.0 | 26.50 |2.21 | 1.9 | 42.57 |2.30 | 3.1 | 69.07 |2.27 |5.03 | 32.7 | 2.8 | 2.9 |+---------+---------+-----+-----+-------+-----+-----+--------+-----+-----+------+-----+-----+ Note to Table: Figures in table may not add correctly due to rounding The resource was calculated by independent consultants, Hellman & Schofield.Measured resources lie in areas where drilling is available at a nominal 25 x 25metre spacing, indicated resources in areas drilled at approximately 25 x 50metre spacing and inferred resources in areas of broader spaced drilling. Theresource model extends from 9700mN to 12200mN and to a maximum depth of 350mRL(a maximum depth of 950 metres below the crest of the Sukari hill) and is basedon all assay data available at 12 September 2007, from a total of 110,239 twometre down hole composites and surface rock chip samples. The resources areestimates of recoverable tonnes and grades using Multiple Indicator Kriging withblock support correction. South of 11300N, in the DFS mining area, the resource is estimated at 6.1 MozMeasured and Indicated, and 3.1 Moz Inferred at a 0.5g/t Au cut off grade. Drilling Results Resource drilling at Sukari during 2006 and 2007 has been very successful (Table3). The Mineral Resource increased by more than 60% from the previous year. Themineralisation zones and geology were able to be modelled consistentlythroughout the porphyry unit, over its entire strike length of 2.2km. Theresource is still open at depth down dip, and results in the Amun, Ra andPharaoh Zones show there is strong potential for further significant resourceincrease and underground mining potential. The first three quarters of the year focused on the central and northern partsof the hill, adding resource ounces along strike, testing the near surfacemineralisation in the Pharaoh Zone and the full extent of the Hapi Zone andother mineralisation zones at depth in the Ra - Gazelle zone, thereby maximisingounces inside the optimised pit shell for the DFS. The results of the program were very successful; the optimised pit shellsgenerated included the deep Hapi Zone material, increasing the pit volume andpotential reserves considerably. The results of preliminary mine optimisationstudies are positive indicating significant potential growth of Sukari reservesfrom 3.7 Moz and requires further detailed mine design/planning. To test the full strike extent of the deeper mineralisation to the south, workcommenced in the fourth quarter in the Amun Zone to test the down dip potentialof the porphyry. Drilling of the down dip extension of mineralisation at AmunDeeps intersected extremely encouraging results, highlighting the continuingstrong potential of Sukari. Amun Zone (9900 - 10700N) Drilling re-commenced in the Amun Zone during the fourth quarter from the wadilevel, testing down dip extensions of the Hapi and other mineralisation zones atdepth. All holes have successfully intersected strong looking mineralisation inthick units of porphyry, particularly at the hangingwall contact zone in theporphyry, which correlates to the Hapi Zone. Drilling started at 10550N and isprogressing south along strike. Several holes returned strong assays over significant widths (Table 3). HoleD1143 on 11400N intersected 212m @ 2.37g/t Au from the hangingwall contact at311m; essentially the entire thickness of the porphyry was mineralised.Mineralisation is associated with quartz veins, brecciated zones with strongarsenopyrite and pyrite and strong silica-sericite alteration. Visible gold wasseen in most holes in this zone. Drilling and assay results indicate the thick, strongly mineralised down dipextension of the Hapi Zone in the main porphyry is very consistent over 300m ofstrike currently drilled, and has added significant ounces to the gold resource.Several other holes have been drilled to the south along strike and intersectedsimilar thicknesses of mineralised porphyry with visually strong lookingmineralisation zones. Holes continue every 50m to 10000N and have been reversecycle ("RC") pre-collared and awaited diamond drilling ("DD") tails. In addition, further step out holes down dip to the east of those describedabove have been pre-collared for DD tailing to determine down dip width of theporphyry and continuity of the strong mineralisation already intersected.Further holes are planned to grow the resource in this area. Ra - Gazelle Zone (10700 - 11200N) The bulk of the updated resource ounces during the year were added in this area,drilling is currently complete. Drilling targeted the major Hapi Zonemineralisation defined in hole RCD553 (111m @ 15.6g/t Au from 473m) last year,successfully intersecting and defining a consistent, thick zone, as well asseveral higher and lower level mineralisation zones (Table 3). Results show thatmineralisation is consistent along and across strike and down dip. Drillingfocused moving northwards through the Ra and Gazelle zones into the Pharaoh Zoneduring the year. Drilling also indicated strong near surface mineralisation in several areas,with hole RCD691 on 11000N at the base of the porphyry outcrop returning 30m @3.83g/t Au from surface, including 4m @ 18.33g/t from 10m. The surface zone canbe traced in holes to the north and south. The result of the Ra - Gazelle resource definition program was very successful,with significant potential to increase the pit volume and potential miningreserve considerably. Pharaoh Zone Drilling continued in Pharaoh Zone during the year, targeted at: •Infill testing continuity of near surface mineralisation detected last year; •Sub vertical tailing of RC pre-collars to test deeper along strike extensions of the Hapi Zone mineralisation; and •Angled holes into the western footwall contact to test the continuation of the higher up, Main Zone type mineralisation. Numerous other flatter to shallow west and east dipping zones of mineralisationwere subsequently tested. Mapped quartz veins and shears confirm a similarorientation to the ones intersected in drilling. Surface mineralisation continued to be intersected in the Pharaoh zone north of11500N proving continuity to the far north of the hill. A strong surface zone isparticularly evident from 11600 - 12000N, corresponding to the NE strikingquartz reef and subsidiary west and east dipping mineralisation zones, nowcalled the Cleopatra Zone, previously mapped and rock chip sampled with strongassays. Drilling initially infill tested the near surface mineralisation associated withthe outcropping shallow North West dipping Cleopatra Zone. Results confirmed asignificant strike extent, width and thickness of near surface mineralisation. Holes D842, D827, D860, D845 and D910 intersected strong mineralisation (Table3); including visible gold and arsenopyrite veining in strongly silica-greensericite altered and brecciated quartz veined porphyry near surface, typical ofthe Cleopatra Zone. West and east dipping zones have also been interpreted. Results from DD tails drilled in the Pharaoh Zone show another, deeper westdipping structure becoming more significant from 11500N, termed the Antony Zone. Significant resource ounces were also added and upgraded in category in the area11200N - 11600N during the year. Zones beneath the Hapi zone have also been defined in drilling. Holes to thenorth such as D1164, RCD728, 741, 743 and 744 (Table 3) intersected thick,highly mineralised zones at depth, proving continuity of the stronglymineralised zones throughout the porphyry, and highlighting the undergroundpotential of the deposit. The continuity of the Main, Hapi and several other intermediary stackedmineralisation zones can be demonstrated from the Amun zone in the south throughto the Ra and Gazelle, and into the Pharaoh Zone beyond 11200N. Interpretationis continuing to the north, where zones above the Main Zone become moreprominent. West dipping mineralised structures such as Cleopatra and Antony arebeing followed up with current drilling in the northern Pharaoh Zone. Drilling will continue with 9 rigs on site, to define the northern extension ofthese zones, the down dip extent of the porphyry and mineralisation in the AmunDeeps area, and other stacked mineralised zones north throughout the PharaohZone. Also planned is testing of the steep sided NW zone of the hill whereaccess so far has been too difficult. The introduction of heavy mining machineryand explosives should create the access needed to fully drill test this area. Mine Infrastructure Sterilisation Drilling RC sterilisation drilling was completed during the last quarter of the financialyear. Over 330 holes for 40,000m have been drilled. Several weakly anomalousintersections were recorded, though nothing of any significance that will impedeinfrastructure development. Sub-economic mineralisation is generally associatedwith felsic, silica-sericite- carbonate altered igneous rocks. Rock Chip Sampling and Mapping A program of rock chip sampling and field mapping of gullies and outcrop in theeastern, southern and western hills was undertaken to supplement drillinformation in areas of difficult access for rigs. Continuous chip sampling ofaccess tracks throughout Sukari Hill and surrounds was also undertaken to helpunderstand and evaluate near surface mineralisation. 7,500 rock chip and channelsamples were taken during the year. Results of chip sampling of rig access tracks cut into Sukari Hill confirmedprevious mapping and understanding of mineralisation. Chip sampling of the Mikeand Lower Mike Tracks in the Pharaoh Zone confirmed the presence and tenor ofthe Cleopatra Zone mineralisation, associated with the major North West dippingoutcropping quartz vein shear and green sericite alteration zone. Regional Sampling has highlighted several zones with anomalous Au values thatare being followed up. The gullies (wadis) to the north east of the Sukari Hillporphyry returned several promising assays which are currently being evaluated(Table 2). Mineralisation is related to extensional quartz veining in sericite -silica - carbonate altered porphyry style rocks. The Western Hills Gullies alsoreturned weakly anomalous rock chip samples that have been supported by drillingas described above. Table 2 - Rock Chip Samples, Regional Work - >0.1g/t Au +--------+---------------+-------+-------+--------+-------------+ | SAMPLE | PROSPECT | NORTH | EAST | GOLD | Comments | | | | | | (g/t) | | +--------+---------------+-------+-------+--------+-------------+ | 231128 | Call Wadi | 11011 | 11459 | 8.8 | Altered | | | | | | | Porphyry | +--------+---------------+-------+-------+--------+-------------+ | 231129 | Call Wadi | 11009 | 11457 | 0.687 | Altered | | | | | | | Porphyry | +--------+---------------+-------+-------+--------+-------------+ | 230986 | Call Wadi | 11094 | 11526 | 0.356 | Altered | | | | | | | Porphyry | +--------+---------------+-------+-------+--------+-------------+ | 231010 | South Sukari | 8853 | 10916 | 1.37 | Altered | | | | | | | Porphyry | +--------+---------------+-------+-------+--------+-------------+ | 231467 |Western Gullies| 10191 | 8094 | 1.3 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 221860 |Western Gullies| 10038 | 7981 | 0.472 | Listvenite | +--------+---------------+-------+-------+--------+-------------+ | 231479 |Western Gullies| 10215 | 8088 | 0.442 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 231466 |Western Gullies| 10189 | 8095 | 0.357 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 231465 |Western Gullies| 10188 | 8096 | 0.189 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 231476 |Western Gullies| 10210 | 8090 | 0.185 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 231469 |Western Gullies| 10195 | 8093 | 0.169 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 231470 |Western Gullies| 10198 | 8094 | 0.163 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ | 231471 |Western Gullies| 10200 | 8093 | 0.161 | Rhyodacite | +--------+---------------+-------+-------+--------+-------------+ Trenches were dug and samples in the alluvial spoil piles in Wadi Pharaoh,adjacent to the east flank of the hill in the Pharaoh Zone were taken. Allsamples were mineralised, with several +1g/t samples, and an average grade forall samples of 0.2g/t Au. Results are currently being followed up with closespaced RC drilling to test the full extent and depth of the deposit. Depths oftransported material up to 13m have been logged, far greater than estimated fromtrenching. Regional Exploration More detailed work on the regional targets away from the Sukari porphyry hasgradually increased during the year. Drill sites have been prepared for Student,Pincer and DZS prospects to follow up ore grade rock chips samples off thenorthern end of the Sukari porphyry, and await the drill rig. Fieldinvestigation continues of other prospects such as Umm Kola, Kurdeman and SukariNorth. The 2007-2008 year should be a very productive and exciting one for regionalexploration. Structural Study Jigsaw Geoscience conducted structural mapping and analysis of Sukari Hilloutcrop and core logging and spectral scanning of core samples, as well as areview of the main regional prospects around Sukari. Results confirmed thecurrent geological model and improved the understanding of alteration andmineralisation paragenesis and structural controls. Training of Egyptiangeologists in detailed structural mapping and analysis was also undertaken, andwill continue. Grade Control Grade Control ("GC") RC drilling commenced late in the last quarter, on the1185RL bench in the Amun Zone above the historical mine workings. Preparation ofbenches for blasting and GC drilling continues. Table 3 - Significant Intersections, Sukari Project 2007 +--------+------+-------+------+----+------+------+------+---------+-------+ | HOLE |NORTH | EAST | DIP |AZI | EOH | FROM | TO |INTERVAL | Au | | | | | | | | | | | (g/t) | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD421 |11125 | 10770 | -90 | 0 |815.4 | 595 | 715 | 120 | 1.98 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 611 | 612 | 1 |102.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 615 | 616 | 1 | 6.17 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD433 |11125 | 10852 | -88 |270 |794.7 | 577 | 600 | 23 | 9.82 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 591 | 592 | 1 | 65.30 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 598 | 599 | 1 |130.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD434 |11175 | 10842 | -89 |270 | 627 |284.5 | 323 | 38.5 | 2.53 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 296 | 304 | 8 | 5.86 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 522 | 577 | 55 | 2.23 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 543 | 544 | 1 | 10.50 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 563 | 567 | 4 | 8.09 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 570 | 572 | 2 | 7.82 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD437 |11175 | 10766 | -89 |270 |764.66| 299 | 385 | 86 | 1.96 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 324 | 331 | 7 | 5.06 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 356 | 358 | 2 | 12.38 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 576 | 705 | 129 | 1.28 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 605 | 606 | 1 | 21.10 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 615 | 616 | 1 | 10.10 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD454 |10950 | 10665 | -82 |270 |721.5 | 523 | 563 | 40 | 8.65 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 528 | 529 | 1 |189.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 537 | 538 | 1 | 20.20 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 544 | 545 | 1 | 13.80 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD574 |11300 | 10678 | -70 |270 |545.5 | 488 | 518 | 30 | 16.90 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 501 | 502 | 1 |410.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 512 | 513 | 1 | 19.30 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD595 |11850 | 10830 | -87 |270 | 380 | 164 | 191 | 27 | 3.28 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 175 | 179 | 4 | 16.13 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD660 |10912 | 10550 | -90 | 0 |505.1 | 374 | 438 | 64 | 2.07 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 389 | 390 | 1 | 53.60 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 451 | 494 | 43 | 7.86 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 490 | 491 | 1 |300.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD691 |11000 | 10443 | -90 | 0 | 150 | 0 | 30 | 30 | 3.83 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 10 | 14 | 4 | 18.33 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD699 |11050 | 10726 | -90 | |648.7 | 272 | 368 | 96 | 1.75 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 294 | 297 | 3 | 8.61 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 361 | 362 | 1 | 22.70 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 374 | 394 | 20 | 2.78 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 381 | 385 | 4 | 6.51 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 518 | 543 | 25 | 5.72 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 531 | 541 | 10 | 12.80 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 584 |648.7 | 64.7 | 2.59 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 610 | 614 | 4 | 12.59 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 647 |648.7 | 1.7 | 13.50 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD703 |10949 | 10663 | -75 |270 |622.1 | 295 | 314 | 19 | 4.94 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 302 | 303 | 1 | 74.70 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 385 | 405 | 20 | 6.81 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 404 | 405 | 1 | 97.70 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 470 | 545 | 75 | 1.83 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 476 | 490 | 14 | 3.44 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 507 | 508 | 1 | 17.30 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 588 | 596 | 8 |101.71 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 591 | 592 | 1 |340.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD708 |11150 | 10958 | -75 |270 |709.6 | 556 | 579 | 23 | 4.30 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 567 | 568 | 1 | 28.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 578 | 579 | 1 | 43.60 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D724 |10900 | 10529 | -83 |270 | 387 | 251 | 300 | 49 | 3.05 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 272 | 274 | 2 | 13.12 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD728 |11472 | 10768 | -90 | 0 | 710 | 629 | 655 | 26 | 6.67 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 634 | 637 | 3 | 30.83 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 646 | 652 | 6 | 7.77 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD735 |11150 | 10723 | -90 | 0 |776.2 |658.4 | 687 | 28.6 | 10.54 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 669 | 670 | 1 |142.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 679 | 680 | 1 | 45.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD736 |11050 | 10835 | -80 |270 |844.5 | 498 | 522 | 24 | 1.92 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 516 | 517 | 1 | 8.53 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 542 | 587 | 45 | 1.63 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 560 | 561 | 1 | 6.96 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 567 | 568 | 1 | 10.90 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD741 |11325 | 10729 | -90 | 0 |809.3 | 601 | 739 | 138 | 1.35 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD743 |11425 | 10760 | -90 | 0 |710.7 | 601 | 675 | 74 | 3.04 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 606 | 609 | 3 | 19.87 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 616 | 618 | 2 | 39.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD744 |11375 | 10778 | -90 | 0 |732.6 | 618 |645.4 | 27.4 | 2.54 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 636 | 637 | 1 | 6.03 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 642 | 644 | 2 | 20.80 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 678 | 688 | 10 | 4.05 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 685 | 686 | 1 | 9.31 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | RCD784 |11925 | 10810 | -56 |270 | 150 | 3 | 76 | 73 | 1.58 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 18 | 21 | 3 | 7.31 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D827 |11750 | 10835 | -75 |270 |162.3 | 50 | 79 | 29 | 1.50 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 54 | 61 | 7 | 3.93 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D842 |11725 | 10804 | -90 | 0 |304.3 | 10 | 15 | 5 | 1.04 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 31 | 52 | 21 | 1.73 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 33 | 34 | 1 | 10.10 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 175 | 178 | 3 | 4.04 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 177 | 178 | 1 | 10.30 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 206 | 215 | 9 | 1.44 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 225 | 230 | 5 | 1.08 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 271 | 301 | 30 | 0.89 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D845 |11850 | 10910 | -87 |270 |108.92| 51 | 65 | 14 | 1.23 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 58 | 59 | 1 | 6.24 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 92 | 98 | 6 | 1.37 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 103 |108.92| 5.92 | 0.96 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D856 |11175 | 10604 | -50 |270 |328.5 | 63 | 91 | 28 | 4.62 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 73 | 75 | 2 | 39.05 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 89 | 90 | 1 | 6.34 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D860 |11775 | 10800 | -87 |270 |281.92| 7 | 9 | 2 | 1.36 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 19 | 21 | 2 | 2.27 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 82 | 84 | 2 | 4.42 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 97 | 102 | 5 | 1.57 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 107 | 109 | 2 | 1.27 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 117 | 136 | 19 | 1.24 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 259 | 263 | 4 | 1.48 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D910 |11775 | 10805 | -55 |270 |351.72| 27 | 31 | 4 | 2.18 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 41 | 49 | 8 | 0.96 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 80 | 84 | 4 | 1.21 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D1013 |10550 | 10700 | -80 |270 | 451 | 276 | 319 | 43 | 1.61 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 310 | 311 | 1 | 6.81 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 375 | 397 | 22 | 3.83 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 387 | 389 | 2 | 11.73 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 391 | 393 | 2 | 19.15 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D1042 |10500 | 10767 | -74 |265 |441.4 | 322 | 397 | 75 | 2.17 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 385 | 386 | 1 | 7.37 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 394 | 397 | 3 | 16.53 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D1073 |10450 | 10751 | -83 |270 | 702 | 320 | 517 | 197 | 2.18 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 372 | 375 | 3 | 12.25 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 445 | 447 | 2 | 54.95 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1124 |10350 | 10700 | -83 |270 |573.6 | 326 | 368 | 42 | 6.24 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 326 | 327 | 1 |213.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 461 | 488 | 27 | 3.66 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 466 | 467 | 1 | 26.80 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 486 | 487 | 1 | 45.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D1143 |10400 | 10710 | 270 |-83 | 610 | 311 | 523 | 212 | 2.37 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 348 | 349 | 1 | 8.00 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 451 | 452 | 1 | 94.20 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 488 | 491 | 3 | 39.61 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D1158 |11875 | 10975 | 270 |-55 |97.92 | 67 | 95 | 34 | 2.41 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 74 | 77 | 3 | 10.07 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 81 | 83 | 2 | 8.30 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1162 |10250 | 10700 | 270 |-87 |570.5 | 347 | 408 | 61 | 2.27 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 349 | 351 | 2 | 5.48 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 362 | 363 | 1 | 13.60 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 403 | 407 | 4 | 10.04 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1163 |10201 | 10649 | 270 |-85 |573.3 | 334 | 357 | 23 | 2.60 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 336 | 339 | 3 | 12.73 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ | D1164 |11250 | 10672 | 0 |-90 |764.5 | 711 | 764 | 53 | 3.21 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 728 | 736 | 8 | 9.36 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 752 | 755 | 3 | 11.27 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1165 |10152 | 10662 | 270 |-80 |719.6 | 343 | 388 | 45 | 2.35 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1166 |10102 | 10611 | -87 |270 |534.5 | 279 | 302 | 23 | 6.23 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 309 | 377 | 68 | 1.89 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1177 |10198 | 10706 | 270 |-87 |727.1 | 367 | 432 | 65 | 18.31 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 367 | 372 | 5 |209.43 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | | | | | +--------+------+-------+------+----+------+------+------+---------+-------+ |RCD1178 |10298 | 10758 | -87 |270 |617.6 | 380 | 485 | 105 | 4.10 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | | | 500 | 517 | 17 | 12.45 | +--------+------+-------+------+----+------+------+------+---------+-------+ | | | | | |incl. | 501 | 503 | 2 | 76.35 | +--------+------+-------+------+----+------+------+------+---------+-------+ Notes: 1. Pharaoh Gold Mines NL (a wholly owned subsidiary of Centamin Egypt Limited) is the holder of a Mining (Exploitation) Lease covering an area of 160 km2 that contains the proposed Sukari mine site and surrounding prospects. This lease is issued under the existing Law 222 of 1994, which was enacted by the Egyptian Government specifically to accommodate the Company's exploration and mining activities in the Eastern Desert (the Eastern Desert Concession). The Lease has a tenure of thirty years with the option to renew for a further thirty years. 2. An Egyptian mineral concession held under application by Egyptian Pharaoh Investment (EPI) an Egyptian Company jointly owned by Centamin Egypt Limited and Kara Gold NL under an agreement with the Egyptian Government. Under the terms of this agreement to develop a heavy minerals project at Rosetta on the Mediterranean coast, east of Alexandria, any profit from mining and separation of the heavy minerals will be shared with the Egyptian Government after EPI recoups all of its development expense. Any profit from the upgrading of the ilmenite to pigment quality TiO2 (titanium dioxide) will be 100% EPI. AUSTRALIAN PROJECTS Nelson's Fleet The Company is entitled to a royalty over the Nelson's Fleet gold project nearSt Ives, Western Australia, from the St Ives Gold Mining Co Pty Ltd, asubsidiary of Gold Fields Ltd. The Company has not been informed of any miningof the tenement to date. 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, is a 'Competent Person' for this purpose and is a'Qualified Person' as defined in 'National Instrument 43-101 of the CanadianSecurities Administrators'. His written consent has been received by the Companyfor this information to be included in this report in the form and context whichit appears. The assay samples were analysed by Ultra Trace Pty Ltd, CanningVale, Western Australia. 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 the2004 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'. MrJohnson consents to the inclusion in the report of the matters based on hisinformation in the form and context in which it appears. For this report, measured resources lie in areas where drilling is available atnominal 25 x 25 metre spacing, indicated resources in areas drilled atapproximately 25 x 50 metre spacing and inferred resources in areas of broaderspaced drilling. The resource model extends to 350mRL (approximately 950 metresbelow the crest of the Sukari hill) and resources are estimates of recoverabletonnes and grades using Multiple Indicator Kriging with block supportcorrection. Appropriate check sampling has been undertaken to verify the gold assays used inthis estimate. CORPORATE ACTIVITIES In July 2006, Minister Sameh Fahmy and members of Parliament revisited Sukarisite, resulting in positive media coverage and increased public interest in theProject. In October 2006, the Company, via its fully owned subsidiary, Pharaoh Gold MinesNL, entered into an agreement with a subsidiary of Newmont Mining Corporation,to acquire the Kori Kollo CIL process plant which is located in Bolivia forUS$11 million. The acquisition was funded out of existing cash reserves of theCompany at the time. Dismantling work commenced in February 2007 and the Plantis due to arrive into Egypt in the fourth quarter of 2007. The Company embarked on its first North American road show in December 2006visiting institutional investors and clients of Westwind Partners Inc in NewYork, Boston and Toronto. The road show was deemed to be highly successful andas a result the company engaged Westwind Partners to work towards a full TorontoStock Exchange ("TSX") listing to complement the existing AIM and ASX Listings. In January 2007, The Egyptian Ministry of Petroleum and Mineral Resources("EMRA") and the International Finance Corporation ("IFC"), the private sectorarm of the World Bank Group, signed an agreement for a technical assistanceprogram to review and reform Egypt's legal and taxation policy framework forprivate sector mining investments. Managed by IFC's technical assistance unit inthe Middle East and North Africa, the joint project will undertake a review anddefine specific policy recommendations for the development of the Egyptianmining industry with particular focus on the legal, fiscal and institutionalframework. Egypt's government wishes to liberalise the country's mining industryto attract more domestic and foreign investment. Centamin welcomes and fullysupports this new initiative. In February 2007, the Company announced that the Definitive Feasibility Study("DFS") into the Sukari Gold Project had been completed, and the Board ofDirectors approved the development of the Project. The Company acquired a 28MW Heavy Fuel Oil second hand power plant from Turkeyin February 2007, following inspection and assessment of its condition. Thispurchase removed a significant amount of project risk from the completionschedule and represented a material saving on the budgeted capital expenditure.The contract for the dismantlement, packing and transportation within Turkey wasawarded to Magdenli, a Turkish engineering group, with a small Centamin teamoverseeing the activities. In April 2007, the Company placed approximately 175 million new shares to raiseC$151 million to fund the development of the Sukari Gold Project. The placingwas heavily oversubscribed. Subsequent to this, the Company completed a full TSXlisting and shares began trading on 05 April 2007. On 17 April 2007, the Company announced that Barclays Capital, the investmentbanking division of Barclays Bank Plc, was appointed as Mandated Lead Arrangerto finance up US$100 million for the Project. Though the funding is subject tocompletion of due diligence and detailed documentation, together with theproceeds raised through the TSX listing and offering, this facility completedthe financing arrangements required for the development of the Project. The duediligence process commenced in April 2007 with the review of Project data, andkey banking personnel visited site in May 2007. In May 2007, the Company announced that it had received environmental approvalfrom the Egyptian Environmental Affairs Agency ("EEAA") for the Sukari GoldProject. DIRECTORS' REPORT The Directors of Centamin Egypt Limited submit herewith the annual financialreport of the Company for the financial year ended 30 June 2007. In order forthe Company to comply with the provisions of the Corporations Act 2001, theDirectors' Report is as follows:- DIRECTORS The names and particulars of the directors of the Company during or since theend of the financial year are:- Mr Sami El-Raghy B.Sc. (Hons), FAusIMM, FSEGChairman, age 66Director since 29 April 1993 A graduate of Alexandria University in 1962, Mr El-Raghy worked in Egypt andEurope before moving to Australia in 1968 and joining American Smelting andRefining Company (Asarco). He was instrumental in the discovery and developmentof a number of gold mines, including the Wiluna Gold Mine for Asarco and the MtWilkinson Gold mine for Chevron Exploration. Mr El-Raghy recognised thepotential of the Marymia Dome and the Barwidgee Yandal Belt long before theseareas became the most sought after mining areas in Australia. Mr El-Raghy bringsto the board over 40 years experience in the industry, both in Australia andoverseas. Mr Josef El-Raghy B.CommManaging Director/CEO, age 36Director since 26 August 2002 Josef El-Raghy holds a Bachelor of Commerce Degree from the University ofWestern Australia and had a ten year career in stock broking. He was formerly adirector of both CIBC Wood Gundy and Paterson Ord Minnett. His expertise ininternational capital markets has greatly assisted the Company in itsfundraising and development activities. Mr El-Raghy was also a director of ISISResources Plc (now Verona Pharma Plc) from 24 February 2005 to 18 September2006. Mr Colin Cowden FAII, ASA, ACIS, ACIM, FNIBA, CDNon Executive Director, age 63Member Audit CommitteeMember Remuneration CommitteeDirector since 8 March 1982 Colin Cowden is the Executive Chairman of Cowden Limited, a licensed insurancebroking company formed in 1972. Cowden Limited is a prominent broking firm inWestern Australia with branch offices in Sydney, Melbourne and Adelaide. MrCowden has been a director of Wentworth Holdings Limited since 26 October 2005,and from 27 November 1998 until 27 October 2005, was a director of OAMPSLimited. Mr G. Brian Speechly FAusIMMNon Executive Director, age 74Member Audit CommitteeMember Remuneration CommitteeDirector since 15 August 2000 Brian Speechly is a Fellow of the Australasian Institute of Mining andMetallurgy with over 50 years experience in the mining industry. During hiscareer, Mr Speechly has been involved in over 320 mining projects and isrecognised in Australia and overseas as an expert in both underground and openpit mining and design. He is particularly noted for his innovative and low costapproaches to mining issues. Mr Speechly has been a director of Dynasty Metals &Mining Inc since 28 April 2004. Dr Thomas G. Elder PhD, FIMM, FGSNon Executive Director, age 68Director since 8 May 2002 Dr Elder is a geology graduate of Durham University and post-graduate NATOScholar at the University of Oslo. His extensive background in mineralexploration was gained with major companies including BP and Rio Tinto. Dr Elderran exploration programmes in the UK, Spain, Italy, Portugal and Greenland forCominco, prior to his appointment as worldwide Exploration Manager for BPMinerals in 1983. Following the take-over by Rio Tinto in 1989, he had specialresponsibility for project development in the Former Soviet Union. Dr Elder hasbeen a non-executive director of Angus & Ross since 12 January 2006 and has beenthe President of Mano River Resources Inc since 04 October 1998. Mr H. Stuart BottomleyNon Executive Director, age 62Member Audit CommitteeDirector since 26 September 2005 Stuart Bottomley worked as a portfolio manager for over twenty years, firstlywith the "Target Group" of trusts and subsequently with Fidelity International.For the last 16 years, he has acted as a consultant to a number of private andpublic companies with a growing emphasis on the mining industry. Mr Bottomleyhas also been a director of ISIS Resources Plc (now Verona Pharma Plc) since 24February 2005, African Consolidated Resources Plc since 27 May 2005 andStarfield Resources Inc since 01 February 2007. MANAGEMENT Mrs Heidi Brown GCertAppFin (Finsia)Company Secretary Mrs Brown has over nine years experience in the finance and securitiesindustries and has completed the Chartered Secretaries Australia GraduateDiploma of Corporate Governance. Mrs Brown also holds a Graduate Certificate ofApplied Finance and Investment and a Diploma of Financial Advising through theFinancial Services Institute of Australasia (Finsia). Mr Mark Smith B.Bus. (Accy), CPA, MAICDChief Financial Officer Mr Smith has a Bachelor of Business undergraduate degree, with a major inAccountancy, obtained from the Queensland University of Technology and is aCertified Practicing Accountant with 16 years post-graduate experience across awide variety of industries. He has held senior financial positions with a numberof Australian publicly listed companies in the resources sector, most recentlyas the CFO for Grange Resources Limited and prior to that for Red Back MiningInc and Chirano Gold Mines Ltd in Ghana. Mr Smith has considerable experience inproject financing, establishing accounting systems and controls for projectdevelopment and operations reporting and is based in Egypt. Mr Robert SinclairSukari Project Development Manager Mr Sinclair has over 40 years experience in engineering and construction onprojects in mining and chemical industries. These projects are located in the US, Australia, Canada, Asia and Africa and range in value from US$30 million toUS$850 million. Mr Sinclair has technical experience in senior managementpositions with both engineering contractors and with the owner's team and hasmanaged pre-feasibility and feasibility studies, EPC and EPCM contracts anddirect hire jobs. Mr Sinclair most recently worked as the Area Manager,Infrastructure for the Koniambo Nickel Project in New Caledonia and previouslyas the EPC Manager and Acting General Manager of the Chirano Gold Mine in Ghana. Mr John McLeodGeneral (Operations) Manager Mr McLeod holds a Bachelor of Science from the University of Calgary in Canada,a Bachelor of Education from Queens University in Kingston, Canada, and a Masterof Education (Management and Innovation) from Western Governor's University inUtah. Mr McLeod is a member of the Society of Mining, Metallurgy and Exploration(SME) and of the International Society of Explosive Engineers, and has over 30years experience in most facets of surface and underground mining all over theworld. Before joining the company in June 2007, Mr McLeod held managementpositions with Saudi Arabian Mining Corporation (Ma'aden) and with Eltin (Chile). Mr Youssef El-RaghyGeneral Manager - Egyptian Operations An officer graduate of the Egyptian Police Academy Mr El-Raghy held seniormanagement roles within the Egyptian Police force for a period in excess of tenyears, having attained the rank of captain, prior to joining the Company. MrEl-Raghy has extensive contacts within the government and industry and maintainsexcellent working relationships with all of the Company's stakeholders withinEgypt. DIRECTORS' MEETINGS The following table sets out the number of directors' meetings (includingmeetings of the committees of directors) held during the financial year and thenumber of meetings attended by each director (while they were a director orcommittee member). During the financial year, 10 board meetings, 1 remunerationcommittee meeting and 3 audit committee meetings were held. +-----------------+-------------------+-------------------+-----------------+| |Board of Directors | Remuneration | Audit Committee || | | Committee | |+-----------------+---------+---------+---------+---------+--------+--------+|Director | Held |Attended | Held |Attended | Held |Attended|+-----------------+---------+---------+---------+---------+--------+--------+|Mr S El-Raghy | 10 | 10 | - | - | - | - |+-----------------+---------+---------+---------+---------+--------+--------+|Mr C Cowden | 10 | 10 | 1 | 1 | 3 | 3 |+-----------------+---------+---------+---------+---------+--------+--------+|Mr G B Speechly | 10 | 7 | 1 | 1 | 3 | 3 |+-----------------+---------+---------+---------+---------+--------+--------+|Dr T G Elder | 10 | 10 | - | - | - | - |+-----------------+---------+---------+---------+---------+--------+--------+|Mr J El-Raghy | 10 | 10 | - | - | - | - |+-----------------+---------+---------+---------+---------+--------+--------+|Mr H S Bottomley*| 10 | 10 | - | - | 3 | 2 |+-----------------+---------+---------+---------+---------+--------+--------+ * Mr H S Bottomley became a member of the Audit Committee on 02 April 2007 In addition to these formal meetings, during the year the Directors consideredand passed twenty four (24) Circular Resolutions pursuant to clause 15.10 of theCompany's constitution. PRINCIPAL ACTIVITIES The consolidated entity's principal activities during the course of thefinancial year were the exploration for precious and base metals, completion ofthe Definitive Feasibility Study into the Sukari project, listing the Company onthe Toronto Stock Exchange (TSX) and commencement of the development phase atthe Sukari project. DIVIDENDS No dividends have been declared or paid since the end of the previous financialyear. CHANGES IN STATE OF AFFAIRS There was no change in the state of affairs of the consolidated entity duringthe financial year. FUTURE DEVELOPMENTS It is the objective of the Company, to continue to drill at the Sukari project,so as to increase the overall size of the geological resource, whilst at thesame time, complete construction of the processing plant and ancillaryinfrastructure. Commissioning and production is anticipated in the fourthquarter of 2008. Gold production from the Sukari project is forecast to have apositive cashflow effect on the Company and consolidated entity. SHARE OPTIONS OPTIONS/BROKER WARRANTS ISSUED DURING THE FINANCIAL YEAR A total of 9,695,000 unlisted options were issued during the financial year to30 June 2007. The details of these options are as follows:- +---------------------+--------------------+------------------+| Number of Ordinary | Exercise Price | Expiry Date || shares under option | A$ | |+---------------------+--------------------+------------------+| 250,000 | 0.6566 | 30 August 2009 |+---------------------+--------------------+------------------+| 2,000,000 | 0.8000 | 09 January 2009 |+---------------------+--------------------+------------------+| 3,615,000 | 0.7106 | 31 January 2010 |+---------------------+--------------------+------------------+| 2,330,000 | 1.0500 | 24 May 2010 |+---------------------+--------------------+------------------+| 1,500,000 | 1.1636 | 25 June 2010 |+---------------------+--------------------+------------------+ A total of 8,794,691 broker warrants were issued during the financial year to 30June 2007. The details of these warrants are as follows:- +---------------------+--------------------+------------------+| Number of Ordinary | Exercise Price | Expiry Date ||shares under warrant | C$ | |+---------------------+--------------------+------------------+| 3,751,431 | 0.86 | 05 April 2009 |+---------------------+--------------------+------------------+| 4,429,678 | 0.86 | 11 April 2009 |+---------------------+--------------------+------------------+| 613,582 | 0.86 | 20 April 2009 |+---------------------+--------------------+------------------+ OPTIONS CONVERTED DURING THE FINANCIAL YEAR A total of 1,345,000 unlisted options were exercised during the financial yearto 30 June 2007. The details of these options are as follows:- +-------------------+-------------------+------------------+|Number of Ordinary | Exercise Price | Expiry Date ||shares under option| A$ | |+-------------------+-------------------+------------------+| 500,000 | 0.2310 | 12 November 2006 |+-------------------+-------------------+------------------+| 500,000 | 0.3549 | 15 December 2006 |+-------------------+-------------------+------------------+| 380,000 | 0.2804 | 04 February 2008 |+-------------------+-------------------+------------------+| 165,000 | 0.2804 | 17 February 2008 |+-------------------+-------------------+------------------+ The issuing entity was Centamin Egypt Limited. The market weighted averageclosing price of Centamin Egypt Limited shares during the 2006-2007 year was$0.95255. No amount was unpaid on these shares. EMPLOYEE OPTION PLANS At the Annual General Meeting on 29 November 2002, shareholders approved theEmployee Option Plan 2002. The following options have been issued to Executivesand Employees under the plan to date. +---------------------+--------------------+------------------+| Number of Ordinary | Exercise Price | Expiry Date || shares under option | A$ | |+---------------------+--------------------+------------------+| 250,000 | 0.2900 | 11 November 2005 |+---------------------+--------------------+------------------+| 1,160,000 | 0.2310 | 12 November 2006 |+---------------------+--------------------+------------------+| 130,000 | 0.2310 | 17 November 2006 |+---------------------+--------------------+------------------+| 750,000 | 0.3549 | 15 December 2006 |+---------------------+--------------------+------------------+| 775,000 | 0.2804 | 04 February 2008 |+---------------------+--------------------+------------------+| 410,000 | 0.2804 | 17 February 2008 |+---------------------+--------------------+------------------+| 1,500,000 | 0.4355 | 08 December 2008 |+---------------------+--------------------+------------------+| 250,000 | 0.6566 | 30 August 2009 |+---------------------+--------------------+------------------+ At the Annual General Meeting on 20 November 2006, shareholders approved theEmployee Option Plan 2006. The following options have been issued to Executivesand Employees under the plan to date. +---------------------+--------------------+------------------+| Number of Ordinary | Exercise Price | Expiry Date || shares under option | A$ | |+---------------------+--------------------+------------------+| 3,615,000 | 0.7106 | 31 January 2010 |+---------------------+--------------------+------------------+| 2,330,000 | 1.0500 | 24 May 2010 |+---------------------+--------------------+------------------+| 1,500,000 | 1.1636 | 25 June 2010 |+---------------------+--------------------+------------------+ The following options were not issued under any of the Employee Option Plans,however, were issued in accordance with employment contracts/service agreements. +---------------------+--------------------+------------------+| Number of Ordinary | Exercise Price | Expiry Date || shares under option | A$ | |+---------------------+--------------------+------------------+| 4,250,000 | 0.3500 | 31 October 2010 |+---------------------+--------------------+------------------+| 2,000,000 | 0.8000 | 09 January 2009 |+---------------------+--------------------+------------------+ During the financial year, the following broker warrants were issued to WestwindPartners in accordance with the Agency Agreement in relation to the TSX listing.No warrants have been exercised during or since the end of the financial year. +---------------------+--------------------+------------------+| Number of Ordinary | Exercise Price | Expiry Date || shares under option | | |+---------------------+--------------------+------------------+| 3,751,431 | C$0.86 | 05 April 2009 |+---------------------+--------------------+------------------+| 4,429,678 | C$0.86 | 11 April 2009 |+---------------------+--------------------+------------------+| 613,582 | C$0.86 | 20 April 2009 |+---------------------+--------------------+------------------+ OPTIONS / WARRANTS ISSUED SUBSEQUENT TO BALANCE DATE There have been no options or warrants issues subsequent to balance date. OPTIONS EXERCISED SUBSEQUENT TO BALANCE DATE 120,000 options have been exercised subsequent to balance date. The details ofthese options are as follows:- +--------------------+---------------------+------------------+| Number | Exercise Price | Expiry Date || | A$ | |+--------------------+---------------------+------------------+| 50,000 | 0.2804 | 17 February 2008 |+--------------------+---------------------+------------------+| 70,000 | 0.7106 | 31 January 2010 |+--------------------+---------------------+------------------+ The issuing entity was Centamin Egypt Limited. No amount was unpaid on theseshares. ENVIRONMENTAL REGULATIONS The consolidated entity is currently complying with relevant environmentalregulations and has no outstanding environmental orders against it. EVENTS SUBSEQUENT TO BALANCE DATE On 29 August 2007 the Company announced that the dismantling of the Kori Kollogold processing plant in Bolivia had been completed and the containerised planthad been transported from Bolivia to the port of Arica in northern Chile whereit was awaiting ship loading and transportation to Egypt. Other than as set out above there has not risen in the interval between the endof the financial year and the date of this report any item, transaction or eventof a material and unusual nature likely in the opinion of the Directors of thecompany to affect significantly the operations of the company, the results ofthose operations, or the state of affairs of the company in subsequent financialyears. REVIEW OF OPERATIONS A review of the Company's operations is located at the beginning of this report. INDEMNIFICATION OF DIRECTORS & AUDITORS During the financial year, the Company paid a $32,412 premium in respect of acontract insuring the directors and officers of the Company and any related bodycorporate against a liability incurred as a director or officer to the extentpermitted by the Corporations Act 2001. The Company has not otherwise, during or since the end of the financial yearexcept to the extent permitted by law, indemnified or agreed to indemnify anofficer or auditor of the Company or of any related body corporate against aliability incurred as such an officer or auditor. REMUNERATION REPORT The Directors of Centamin Egypt Limited present the Remuneration Report preparedin accordance with section 300A of the Corporations Act 2001 for the Company andthe consolidated entity for the financial year ended 30 June 2007. For thepurposes of this report, Directors and executives of the Company andconsolidated entity are defined as those persons having authority andresponsibility for planning, directing and controlling the major activities ofthe Company and consolidated entity, directly or indirectly, including anydirector (whether executive or otherwise) of the parent company. ThisRemuneration Report forms part of the Directors' Report. OVERVIEW Remuneration levels for Directors and executives are competitively set toattract the most qualified and experienced candidates. Details of the Company'sremuneration strategy for the 2007 financial year are set out in thisRemuneration Report. This Remuneration Report: •explains the Board's policies relating to remuneration of Directors and executives; •discusses the relationship between these policies and the Company's performance; and •sets out remuneration details for each director and senior executive. The fees paid to Non-Executive Directors are set at levels which reflect boththe responsibilities of, and the time commitments required from eachNon-Executive Director to discharge their duties and are not linked to theperformance of the Company. The remuneration strategy for the Managing Director / Chief Executive Officer(CEO) and executives including the Company Secretary comprise a fixed cashcomponent, statutory superannuation contributions, an annual merit basedperformance bonus and where applicable the issue of share options in the Companywhich is intended to: •provide competitive rewards to attract high calibre executives; and •link executive rewards to shareholder value. Criteria used to determine the annual merit based performance bonus is thesetting of key objectives for each executive and measuring performance againstthese targets which centre on Company performance, improvement in net profit andimprovement in return to shareholders. Share options are offered to executives at the discretion of the Directors,having regard, among other things, to the length of service with the Group, thepast and potential contribution of the person to the Group and in some cases,performance. DIRECTOR AND EXECUTIVE DETAILS The following persons acted as directors of the company during or since the endof the financial year:- • Mr Sami El-Raghy (Chairman) • Mr Josef El-Raghy (Managing Director/CEO) • Dr Thomas G Elder (Non-Executive Director) • Mr Colin Cowden (Non-Executive Director) • Mr G Brian Speechly (Non-Executive Director) • Mr H Stuart Bottomley (Non-Executive Director) The highest remunerated (and only) company executive for the 2007 financial yearwas:- • Mrs Heidi Brown (Company Secretary) The highest remunerated group executives for the 2007 financial year were:- • Mr Mark Smith (Chief Financial Officer) , appointed to the position 01 January 2007 • Mr Wayne Foote (General Manager - Operations), resigned 22 May 2007 • Mr John McLeod (General Manager - Operations), appointed 01 June 2007 DIRECTOR AND EXECUTIVE REMUNERATION The Remuneration Committee reviews the remuneration packages of all Directorsand executives on an annual basis. Remuneration packages are reviewed anddetermined with due regard to current market rates and are benchmarked againstcomparable industry salaries, adjusted by a performance factor to reflectchanges in the performance of the Company. +---------+---------------------------------+-----------------+---------+--------+--------------------------+--------+| | Short-term employee benefits |Post-employment | Other | | Share-based payment | || | | benefits |long-term|Termi- |--------------------------| || |---------------------------------|-----------------|employee |nation | Equity-settled | Cash | || | Salary & | | Non- | | Super- | |benefits |benefits|------------------|settled| Total || | Fees |Bonus |monetary |Other|annuation |Other | | |Shares | Options | | || | | | | | | | | |& units|& rights 1| | || 2007 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------||S | 387,583 | -| -| -| -| -| -| -| -| -| -| 387,583||El-Raghy | | | | | | | | | | | | |+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|J | 412,500 |50,000| 4,523| -| -| -| -| -| -| -| -| 467,023||El-Raghy2| | | | | | | | | | | | |+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|T Elder | 51,504 | -| -| -| -| -| -| -| | 17,053| -| 68,557|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|C Cowden | 26,875 | -| -| -| 2,418| -| -| -| -| 17,053| -| 46,346|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|G B | 26,875 | -| -| -| 2,418| -| -| -| -| -| -| 29,293||Speechly | | | | | | | | | | | | |+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|H | 51,504 | -| -| -| -| -| -| -| | 17,053| -| 68,557||Bottomley| | | | | | | | | | | | |+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|M Smith 6| 127,500 | -| -| -| 37,777| -| -| -| -| 121,488| -| 286,765|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|W Foote5 | 361,411 | -| 22,547| -| 21,967| -| -| -| -| (57,968)7| -| 347,957|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|J McLeod3| 20,833 | -| -| -| -| -| -| -| -| 6,694| -| 27,527|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|H Brown4 | 85,000 |10,000| -| -| 8,550| -| -| -| -| 43,765| -| 147,315|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+|Total |1,551,585 |60,000| 27,070| -| 73,130| -| -| -| -| 165,138| -|1,876,923|+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+---------+ 1 Options value as per Black Scholes pricing method. Options are offered to employees at the discretion of the Directors, having regard, among other things, to the length of service with the Group, the past and potential contribution of the person to the Group and in some cases, performance. 2 Bonus paid in respect to performance. The bonus represented 10.7% of total remuneration and was paid on 31 October 2006. The bonus was paid for performance related to capital raising endeavours. 3 Mr McLeod commenced with the Company on 01 June 2007. 4 Bonus paid in respect to added responsibilities and represents 7.5% of total remuneration and was paid on 31 October 2006. 5 Mr Foote resigned on 22 May 2007. 6 Mr Smith was promoted to the position of Chief Financial Officer on 01 January 2007. His listed remuneration includes current and previous position held during the financial year. Mr Smith commenced full time with the Group on 17 July 2006. 7 Reversal of remuneration recognised in prior year in relation to options which had not vested at date of resignation. +---------+---------------------------------+----------------+---------+--------+------------------------------------+| | Short-term employee benefits | Post-employment| Other | | Share-based payment | || | | benefits |long-term|Termi- |--------------------------| || |---------------------------------|----------------|employee |nation | Equity-settled | Cash | || | Salary & | | Non- | | Super-| |benefits |benefits|------------------|settled| Total || | Fees |Bonus |monetary |Other|annuation| Other| | |Shares | Options | | || | | | | | | | | |& units|& rights 1| | || 2007 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|S | 357,353 | -| -| -| -| -| -| -| -| -| -| 357,353||El-Raghy | | | | | | | | | | | | |+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|J | 303,609 | -| 24,978| -| 2,860| -| -| -| -| -| -| 331,447||El-Raghy | | | | | | | | | | | | |+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|T Elder | 49,167 | -| -| -| -| -| -| -| -| 39,965| -| 89,132|+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|C Cowden | 25,000 | -| -| -| 2,250| -| -| -| -| 39,965| -| 67,215|+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|G B | 25,000 | -| -| -| 2,250| -| -| -| -| -| -| 27,250||Speechly | | | | | | | | | | | | |+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|H | 44,107 | -| -| -| -| -| -| -| -| 39,965| -| 84,072||Bottomley| | | | | | | | | | | | |+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|W Foote | 326,087 | -| 2,790| -| 29,348| -| -| -| -| 57,968| -| 416,193|+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|H Brown2 | 67,000 |20,000| -| -| 7,830| -| -| -| -| 10,892| -| 105,722|+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+|Total |1,197,323 |20,000| 27,768| -| 44,538| -| -| -| -| 188,755| -|1,478,384|+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+ 1 Options value as per Black Scholes pricing method. Options are offered to employees at the discretion of the Directors, having regard, among other things, to the length of service with the Group, the past and potential contribution of the person to the Group and in some cases, performance. 2 Bonus paid in respect to added responsibilities and represents 18% of total remuneration and was paid on 31 October 2005. EMPLOYMENT CONTRACTS Remuneration and other terms of employment for the following Directors andexecutives are formalised in employment agreements, the terms of which are setout below:- Josef El-Raghy, Managing Director/CEO- term: 3 years (expiring 01 September 2008). 3 months notice of termination period. - base salary: $450,000 (net of taxes) pa, reviewed annually by the remuneration committee Sami El-Raghy, Chairman- term: 3 months notice of termination period - base salary: $400,000 (net of taxes) pa, reviewed annually by the remuneration committee Mark Smith, Chief Financial Officer- term: 2 years (expiring 01 July 2009). 3 months notice of termination period. - base salary: $250,000 (net of taxes) pa, reviewed annually by the remuneration committee John McLeod, Operations Manager- term : 2 years (expiring 01 June 2009). 3 months notice of termination period. - base salary : $250,000 (net of taxes) pa, reviewed annually by the remuneration committee Heidi Brown, Company Secretary- term: 1 month notice of termination period - base salary: $90,000 + 9% superannuation, reviewed annually by the remuneration committee No Director or executive is entitled to any termination payments apart fromremuneration payable up to and including the date of termination and allpayments due by way of accrued leave. Options Issued to Directors and executives Options are issued to Directors and executives under the Employee Option Plan2006 (previously under the Employee Option Plan 2002) as part of theirremuneration. Options are offered to Directors and executives at the discretionof the Directors, having regard, among other things, to the length of servicewith the Group, the past and potential contribution of the person to the Groupand in some cases, performance. The following options have been issued toDirectors and executives to date:- +----------+------------------+------------+----------+---------+------------+|Name | Office | Issue Date | No of |Exercise |Expiry Date || | | | Unquoted |Price ($)| || | | | Options | | |+----------+------------------+------------+----------+---------+------------+|Mr C N |Non-Executive |15 December | 250,000 | 0.3549 |15 December ||Cowden |Director | 2003 | | | 2006 |+----------+------------------+------------+----------+---------+------------+| | |08 December | 500,000 | 0.4355 |08 December || | | 2005 | | | 2008 |+----------+------------------+------------+----------+---------+------------+|Dr T G |Non-Executive |15 December | 250,000 | 0.3549 |15 December ||Elder |Director | 2003 | | | 2006 |+----------+------------------+------------+----------+---------+------------+| | |08 December | 500,000 | 0.4355 |08 December || | | 2005 | | | 2008 |+----------+------------------+------------+----------+---------+------------+|Mr G B |Non-Executive |15 December | 250,000 | 0.3549 |15 December ||Speechly |Director | 2003 | | | 2006 |+----------+------------------+------------+----------+---------+------------+|Mr H S |Non-Executive |08 December | 500,000 | 0.4355 |08 December ||Bottomley |Director | 2005 | | | 2008 |+----------+------------------+------------+----------+---------+------------+|Mr M Smith|Chief Financial | 30 August | 250,000 | 0.6566 | 30 August || |Officer | 2006 | | | 2009 |+----------+------------------+------------+----------+---------+------------+| | | 31 January | 250,000 | 0.7106 | 31 January || | | 2007 | | | 2010 || | | | | | |+----------+------------------+------------+----------+---------+------------+| | |25 June 2007| 500,000 | 1.1636 |25 June 2010|| | | | | | || | | | | | |+----------+------------------+------------+----------+---------+------------+|Mr J |General |25 June 2007|1,000,000 | 1.1636 |25 June 2010||McLeod |(Operations) | | | | || |Manager | | | | |+----------+------------------+------------+----------+---------+------------+|Mrs H |Company Secretary |12 November | 100,000 | 0.2310 |12 November ||Brown | | 2003 | | | 2006 |+----------+------------------+------------+----------+---------+------------+| | |04 February | 200,000 | 0.2804 |04 February || | | 2005 | | | 2008 || | | | | | |+----------+------------------+------------+----------+---------+------------+| | | 31 January | 200,000 | 0.7106 | 31 January || | | 2007 | | | 2010 || | | | | | |+----------+------------------+------------+----------+---------+------------+ The options issued vest and are exercisable over a period of 12 months, with 50%vesting and exercisable after 6 months and the other 50% vesting and exercisableafter 12 months of issue. These options have a term of 3 years. Options Exercised by Directors and executives The following options were exercised by Directors and executives during theyear:- +-----------+--------------+------------+-----------+---------+--------------+|Name | Office | Exercise | No of |Exercise | Expiry Date || | | Date | Unquoted |Price ($)| || | | | Options | | |+-----------+--------------+------------+-----------+---------+--------------+|Mr T G |Non-Executive |11 December | 135,000 | 0.3549 | 15 December ||Elder |Director | 2006 | | | 2006 |+-----------+--------------+------------+-----------+---------+--------------+| | |12 December | 115,000 | 0.3549 | 15 December || | | 2006 | | | 2006 |+-----------+--------------+------------+-----------+---------+--------------+|Mr G B |Non-Executive | 24 October | 250,000 | 0.3549 | 15 December ||Speechly |Director | 2006 | | | 2006 |+-----------+--------------+------------+-----------+---------+--------------+|Mrs H A |Company |29 May 2007 | 200,000 | 0.2804 | 04 February ||Brown |Secretary | | | | 2008 |+-----------+--------------+------------+-----------+---------+--------------+ The options exercised by Dr T Elder during the year were issued on 15 December2003. The value of the options is determined internally using the Black-ScholesPricing Model and are included in remuneration on a proportionate basis fromgrant date to vesting date. These options vest and are exercisable over a periodof 12 months, with 50% vesting and exercisable after 6 months (15 June 2004) andthe other 50% vesting and exercisable after 12 months of issue (15 December2004). These options expire after 3 years. The closing market price at the dateof exercise was $0.7550 and $0.7700 respectively. The options exercised by Mr G Speechly during the year were issued on 15December 2003. The value of the options is determined internally using theBlack-Scholes Pricing Model and are included in remuneration on a proportionatebasis from grant date to vesting date. These options vest and are exercisableover a period of 12 months, with 50% vesting and exercisable after 6 months (15June 2004) and the other 50% vesting and exercisable after 12 months of issue(15 December 2004). These options expire after 3 years. There was no trading inCentamin securities on the ASX on the date of exercise. The closing market priceon 19 October 2006 (the day that the shares were traded on the ASX prior to theexercise) was $0.67. The options exercised by H Brown during the year were issued on 04 February2005. The value of the options is determined internally using the Black-ScholesPricing Model and are included in the remuneration on a proportionate basis fromgrant date to vesting date. These options vest and are exercisable over a periodof 12 months, with 50% vesting and exercisable after 6 months (04 August 2005)and the other 50% vesting and exercisable after 12 months of issue (04 February2006). These options expire after 3 years. The closing market price at the dateof exercise was $1.12. Value of Director and Executives Options Granted, Exercised and Lapsed Duringthe Year The following table shows the value of Director and executives options granted,exercised and lapsed during the year:- +----------+--------+---------+---------+---------+------------+-------------+|Name |Options | Options | Options | Total | Value of |Percentage of|| |Granted |Exercised| Lapsed |Value of | Options | Total || | | | | Options |Included in |Remuneration || | | | |Granted, |Remuneration|for the Year || | | | |Exercised|for the Year|that Consists|| | | | | and | | of Options || | | | | Lapsed | (1) | |+----------+--------+---------+---------+ | | || |Value at|Value at |Value at | | | || | Grant |Exercise | Time of | | | || | Date | Date | Lapse | | | |+----------+--------+---------+---------+---------+------------+-------------+| | $ | $ | $ | $ | $ | % |+----------+--------+---------+---------+---------+------------+-------------+|Mr C | -| -| -| -| 17,053| 36.79||Cowden | | | | | | |+----------+--------+---------+---------+---------+------------+-------------+|Dr T G | -| 190,475| -| 190,475| 17,053| 24.87||Elder | | | | | | |+----------+--------+---------+---------+---------+------------+-------------+|Mr G B | -| 167,500| -| 167,500| -| -||Speechly | | | | | | |+----------+--------+---------+---------+---------+------------+-------------+|Mr H S | -| -| -| -| 17,053| 24.87||Bottomley | | | | | | |+----------+--------+---------+---------+---------+------------+-------------+|Mr M Smith| 322,773| -| -| 935,000| 121,488| 42.36|+----------+--------+---------+---------+---------+------------+-------------+|Mr J | 321,003| -| -|1,075,000| 6,694| 24.32||McLeod | | | | | | |+----------+--------+---------+---------+---------+------------+-------------+|Mrs H | 101,265| 224,000| -| 398,000| 43,765| 29.71||Brown | | | | | | |+----------+--------+---------+---------+---------+------------+-------------+ (1) The value of options grated during the period is recognised in compensation over the vesting period of the grant, in accordance with Australian accounting standards. DIRECTORS' SHAREHOLDINGS The relevant interest of each Director in the share capital of the Company shownin the Register of Directors' Shareholdings as at the date of this report are:- +----------+----------+-----------+---------------------+--------------+-----------+|Director |Fully paid|Partly paid|Full paid converting | Executive |Convertible|| | ordinary | ordinary | cumulative |share options | Notes || | shares | shares | non-participating | | || | | | preference shares | | |+----------+----------+-----------+---------------------+--------------+-----------+|S El-Raghy| *| -| -| -| -|| |78,235,754| | | | |+----------+----------+-----------+---------------------+--------------+-----------+|J El-Raghy| *| -| -| -| -|| |79,185,754| | | | |+----------+----------+-----------+---------------------+--------------+-----------+|C Cowden | 578,626| -| -| 500,000| -|+----------+----------+-----------+---------------------+--------------+-----------+|G Speechly| 250,000| -| -| -| -|+----------+----------+-----------+---------------------+--------------+-----------+|T Elder | 250,000| -| -| 500,000| -|+----------+----------+-----------+---------------------+--------------+-----------+|H | 2,800,000| -| -| 500,000| -||Bottomley | | | | | |+----------+----------+-----------+---------------------+--------------+-----------+ \* The total shares held by Mr S El-Raghy and Mr J El-Raghy arise due to them both being directors/trustees of the following personally related entities: - Nordana Pty Ltd 4,990,668 shares- Nordana Pty Ltd 17,595,714 shares- El-Raghy Kriewaldt Pty Ltd 55,299,372 shares- S & M El-Raghy 350,000 shares The balance of 950,000 shares are held by Mr J El-Raghy being a director ofMontana Realty Pty Ltd Since the end of the previous financial year, no Director of the Company hasreceived or become entitled to receive any benefit (other than a benefitincluded in the aggregate amount of remuneration received or due and receivableby Directors shown in the consolidated accounts) because of a contract made bythe Company, its controlled entities or a related body corporate with theDirector or with a firm of which the Director is a member, or with an entity inwhich the Director has a substantial interest. MANAGEMENT DISCUSSION & ANALYSIS The following Management's Discussion and Analysis of the Financial Conditionand Results of Operations ("MD&A") for Centamin Egypt Limited (the "Company" or"Centamin") should be read in conjunction with the Directors' Report and theaudited Financial Report for the year ended 30 June 2007. The effective date ofthis report is 27 September 2007. The financial information presented in this MD&A has been prepared in accordancewith Australian equivalents to International Financial Reporting Standards(AIFRS), other mandatory professional reporting requirements and theCorporations Act 2001. In addition to these Australian requirements, further information has beenincluded in the Consolidated Financial Statements for the year ended 30 June2007 in order to comply with applicable Canadian securities law, as the Companyis listed on the Toronto Stock Exchange. Additional information relating to the Company, including other publicannouncements, is available at www.centamin.com. All amounts in this MD&A are expressed in Australian dollars unless otherwiseidentified. FORWARD LOOKING STATEMENTS Some of the statements contained in this MD&A, including those relating tostrategies and other statements, are predictive in nature, and depend upon orrefer to future events or conditions, or include words such as "expects","intends", "plans", "anticipates", "believes", "estimates" or similarexpressions that are forward looking statements. Forward looking statementsinclude, without limitations, the information concerning possible or assumedfurther results of operations as set forth herein. These statements are nothistorical facts but instead represent only expectations, estimates andprojections regarding future events and are qualified in their entirety by theinherent risks and uncertainties surrounding future expectations generally. The forward looking statements contained in this MD&A are not guarantees offuture performance and involve certain risks and uncertainties that aredifficult to predict. The future results of the Company may differ materiallyfrom those expressed in the forward looking statements contained in this MD&Adue to, among other factors, the risks and uncertainties inherent in thebusiness of the Company. The Company does not undertake any obligation to updateor release any revisions to these forward looking statements to reflect eventsor circumstances after the date of this MD&A or to reflect the occurrence ofunanticipated events. BACKGROUND Centamin is a mineral exploration and development company that has been activelyexploring in Egypt since 1995. The principal asset of Centamin is its interestin the Sukari Project, located in the Eastern Desert of Egypt. The SukariProject is at an advanced stage of development, construction commenced July 2007and first gold production is expected during the fourth quarter of 2008. A definitive feasibility study (the "DFS") for the development to commercialproduction of the Sukari Project was compiled in February 2007 by Roche ProcessEngineering Pty Ltd. The DFS provides that the capital cost to develop theproject is estimated at US$216.5 million (including mining fleet andcontingencies but not including the leased mining fleet). According to the DFS,the Sukari Project reserve will be mined by a single open pit over a 15-yearperiod. During that time 78 Mt ore grading 1.5 g/t is expected to be mined,containing 3.7 Moz gold. Over this 15-year mining period the project is expectedto produce on average 200,000 oz of gold annually at an average cash operatingcost of US$290/oz (inclusive of 3% royalty). The Sukari Project will be the first large-scale modern gold mine to bedeveloped in Egypt. Centamin's operating experience in Egypt gives it asignificant first-mover advantage in acquiring and developing other goldprojects in the prospective Arabian-Nubian Shield. CONSOLIDATED INCOME STATEMENTS Year ended Year ended 30 June 2007 30 June 2006 A$ A$ Revenue 3,317,157 1,140,700 Other income 522,526 - Foreign exchange gain 11,376,694 2,011,921 Administration expenses (6,420,907) (1,580,463) Marketing expenses (206,532) (218,531) Travelling expenses (470,421) (337,132) Other expenses - (5,665) Profit before income tax 8,118,517 1,010,830 Tax (expense)/income - - Net profit for the period 8,118,517 1,010,830 (Loss) per share- Basic (cents per share) 1.311 0.194- Diluted (cents per share) 1.293 0.192 Revenue of $3,317,157 comprises interest revenue applicable on the Company'savailable cash and working capital balances and term deposit amounts. Interestrevenue is higher than for the period last year due to higher average cashholdings for the period in 2007 when compared to 2006. Other income of $522,526 is for a "profit on sale of fixed asset" non-cashaccounting entry applicable on the sale of the exploration drilling rigs sold byunder a sale and purchase agreement in a prior financial year. The accountingentry has been posted to recognise the accounting profit on sale as a result ofthe final progressive purchase payment being received. Foreign exchange gain is attributable to positive exchange rate movements duringthe period and has increased substantially due to the effect of higher averagecash holdings held by the Company combined with the strengthening of theCanadian Dollar against the United States Dollar. Administration expenses of $6,420,907 comprise expenditure incurred againstshare based payments, communications, consultants, directors' fees, stockexchange listing fees, share registry fees, employee salaries and general officeadministration expenses. Marketing expenses of $206,532 comprise investor relations activities andattendance at various trade shows and industry conferences. Travelling expenses of $470,421 are significant and comprise travel andaccomodation for directors, company executives and consultants for industry andcorporate purposes. The profit after tax of the consolidated entity for the twelve months ended 30June 2007 was $8,118,517. CONSOLIDATED BALANCE SHEETS Year ended Year ended 30 June 2007 30 June 2006 A$ A$ Total current assets 161,111,954 54,789,830 Total non-current assets 96,597,970 42,458,738 ___________________________Total assets 257,709,924 97,248,568 ___________________________Total current liabilities 7,503,203 1,187,188 Total non-current liabilities 176,741 205,448 ___________________________Total liabilities 7,679,944 1,392,636 ___________________________Net assets 250,029,980 95,855,932 ___________________________ Current assets have increased to $161,111,954 at 30 June 2007 as a result of theequity funds raised during April 2007 when the Company listed on the TorontoStock Exchange. Non-current assets have increased to $96,597,970 at 30 June 2007 as a result ofthe expenditure incurred for completion of the definitive feasibility study onthe Sukari Gold Project, ongoing exploration resource drilling at Sukari,acquisition of Kori Kollo second hand gold plant in Bolivia (South America) andinitial construction activities at Sukari. The Company's accounting policy is tocapitalise expenditure of this nature under the category of Exploration,Evaluation & Development. Current liabilities have increased to $7,503,203 at 30 June 2007 due to anincrease in the closing creditors' balance and the acquisition of a second handpower plant in Turkey. The acquisition price of the second hand power plant wasUS$9.75M of which US$3.914M remains to be paid, as at 30 June 2007 as the thirdand final payment of this transaction. Non-current liabilities as at 30 June 2007 have decreased to $176,741. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Year ended Year ended 30 June 2007 30 June 2006 A$ A$ Total equity at beginning of period 95,855,932 47,628,088 Movement in issued equity 141,419,320 46,741,156 Movement in reserves 4,636,211 475,858 Profit for the period 8,118,517 1,010,830 ___________________________Total equity at end of period 250,029,980 95,855,932 ___________________________ Issued equity has increased as a result of the equity funds raised during April2007 when the Company listed on the Toronto Stock Exchange. Reserves have increased due to the effect of expensing share based optionpayments and increase in foreign currency translation reserve arising ontranslation of accounts to the presentation currency. Profit for the year ended 30 June 2007 is analysed under the sectionConsolidated Income Statement. CONSOLIDATED CASH FLOW STATEMENTS Year ended Year ended 30 June 2007 30 June 2006 A$ A$ Net cash flow from operating activities 1,591,064 942,596Net cash flow from investing activities (47,699,184) (13,849,305)Net cash flow from financing activities 141,340,506 46,741,156 ___________________________Net increase in cash and cash equivalents 95,232,386 33,834,447 Cash and cash equivalents at the beginning of 54,493,427 17,984,972the financial period Effects of exchange rate changes 11,109,600 2,674,008 ___________________________Cash and cash equivalents at the end of the 160,835,413 54,493,427financial period ___________________________ The net cash flow from operating activities for the year ended 30 June 2007 of$1,591,064 is attributable to payments for corporate salary and wage, corporateadministration and compliance related costs offset by interest revenue received. The net cash flow from investing activities for the year ended 30 June 2007 of($47,699,184) is attributable to exploration expenditure of $11,096,960,feasibility study expenditure of $2,398,952, Sukari development expenditure of$20,138,984 and payments for plant and equipment of $14,064,288. This finalamount is largely payments for the Kori Kollo second hand gold processing plantin Bolivia (South America) and initial payment for the second hand power plantin Turkey. The net cash flow from financing activities for the year ended 30 June 2007 of$141,340,506 is attributable to equity raised when the Company listed on theToronto Stock Exchange and the conversion of employee share options offset bycosts of equity raising. The overall net increase in cash for the year ended 30 June 2007 of $95,232,386,excluding the effect of exchange rate movements, results in a closing cashbalance of $160,835,413. LIQUIDITY AND CAPITAL RESOURCES The Company's principal source of liquidity as at 30 June 2007 is cash of$160,835,413 (30 June 2006 - $54,493,427). Of this amount $148,735,428 has beeninvested in short term commercial banks bills and term deposits. The Company's principal sources of cash for the year ended 30 June 2007 wereproceeds from an equity raising, conversion of employee share options, cashinvestments and interest revenue received from cash investments. The following is a summary of the Company's outstanding commitments as at 30June 2007: Payments due Total Less than 1 year 1 to 5 years A$ A$ A$ Turkish Power Plant 4,611,759 4,611,759 -Employee entitlements 539,927 539,927 -Creditors 2,351,517 2,351,517 - _______________________________________________Total commitments 7,503,203 7,503,203 - _______________________________________________ The Company's financial commitments are limited to controllable discretionaryspending on work programs at the Sukari Project, the Kori Kollo plantdismantling site in Bolivia, the Turkish power plant dismantling site in Turkey,administration expenditure at the Egyptian and Australia office locations andfor general working capital purposes. The Company's financial obligations in relation to the Kori Kollo and Turkishplants are limited to the following: • A US$5.5 million payment, being the final balance owing on the acquisition cost of the Kori Kollo gold processing plant acquired in the early part of fiscal year 2007 presently located in Bolivia. This payment has already been funded through the deposit of the final balance into an escrowed account. Release of funds to the seller were made upon completion of the relocation program. See section titled "Subsequent Events". • A US$9.75 million series of progressive payments relating to the acquisition of a second hand power generation plant acquired in February 2007 and presently located in Turkey. The first payment of US$1.9 million was made upon signing of the sale and purchase contract in February 2007, the second and third payments of US$1.9 million were each due on 30 April 2007 and 13 August 2007, and the final payment is due upon the earlier of power plant location or the expiry date of a letter of credit established as security for the payments. This expiry date is 09 October 2007. On 17 April 2007 the Company announced that it had appointed Barclays Capital,the investment banking division of Barclays Bank PLC, as Mandated Lead Arrangerto arrange a financing facility of up to US$100M for the Sukari Gold Project. Other than described above the company has no other off balance sheetarrangements. OUTSTANDING SHARE INFORMATION As at 27 September 2007 the Company had 755,854,232 fully paid ordinary sharesissued and outstanding. The following table sets out the fully paid ordinaryshares issuable under the Employee Share Option Plan and Warrants issued underthe recent TSX listing: As at 27 September 2007 Number Shares on Issue 755,854,232Options issued but not exercised 13,370,000Warrants issued by not exercised 8,794,691 ____________ 778,018,923 ____________ SEGMENT DISCLOSURE The Company is engaged in the business of exploration for precious and basemetals only, which is characterised as one business segment only. SIGNIFICANT ACCOUNTING ESTIMATES Management is required to make various estimates and judgements in determiningthe reported amounts of assets and liabilities, revenues and expenses for eachperiod presented and in the disclosure of commitments and contingencies. Thesignificant areas where management uses estimates and judgements in preparingthe consolidated financial statements are the determination of carrying valuesand impaired values of exploration assets. INTERNAL CONTROLS Disclosure controls and procedures are designed to provide reasonable assurancethat all relevant information is gathered and reported to management, includingthe CEO and CFO, on a timely basis so that appropriate decisions can be maderegarding public disclosure. Management, with the participation of thecertifying officers, has evaluated the effectiveness of the design andoperation, as of 30 June 2007, of the Company's disclosure controls andprocedures (as defined by the Canadian Securities Administrators). Based on thatevaluation, the certifying officers have concluded that such disclosure controlsand procedures are effective and designed to ensure that material informationrelating to the Company and its subsidiaries is known to them by others withinthose entities. Internal controls over financial reporting are designed to provide reasonableassurance regarding the reliability of our financial reporting and compliancewith Canadian generally accepted accounting principles in our financialstatements. Management has evaluated the design of internal control overfinancial reporting and has concluded that such internal controls over financialreporting are designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles in Canada.In addition, there have been no changes in the Company's internal control overfinancial reporting during the year ended 30 June 2007 that have materiallyaffected, or are reasonably likely to materially affect, its internal controlover financial reporting. FINANCIAL INSTRUMENTS At 30 June 2007 the Company has exposure to interest rate risk which is limitedto the floating market rate for cash. The Company does not have foreign currency risk for non-monetary assets andliabilities of the Egyptian operations as these are deemed to have a functionalcurrency of United States dollars. The Company has no significant monetaryforeign currency assets and liabilities apart from Canadian dollar and UnitedStates dollar cash term deposits which are held for the purposes of funding aportion of the mine construction for the Sukari Project. The Company currently does not engage in any hedging or derivative transactionsto manage interest rate or foreign currency risks. RELATED PARTY TRANSACTIONS The related party transactions for financial year ended 30 June 2007 aresummarised below: •Mr S El-Raghy and Mr J El-Raghy are also directors and shareholders of El-Raghy Kriewaldt Pty Ltd ("El-Raghy Kriewaldt"). El-Raghy Kriewaldt provides office premises to the Company. All dealings with El-Raghy Kriewaldt are in the ordinary course of business and on normal terms and conditions. Rent and office outgoings paid to El-Raghy Kriewaldt Pty Ltd during the year were $54,988 (2006: $53,055). Refer to Note 19 of the Notes to the Financial Statements for commitments for expenditure and leasing arrangements. •Mr S El-Raghy provides office premises in Alexandria, Egypt to the Company. All dealings with Mr S El-Raghy are in the ordinary course of business and on normal terms and conditions. Rent and office outgoings paid to Mr S El-Raghy during the year were $19,621 (2006: $20,214). •A director of the Company, Mr C Cowden has an interest as a director and controlling shareholder of Cowden Limited, Insurance Brokers. This Company provides insurance broking services to the Company. All dealings with this Company are in the ordinary course of business and on normal terms and conditions. Premiums paid to Cowden Limited during the year were $134,817 (2006: $73,212), of which $20,708 was brokerage (2006: $7,567). For further details of the related party transactions see Note 31 of the Notesto Financial Statements. SUBSEQUENT EVENTS On 29 August 2007 the Company announced that the dismantling of the Kori Kollogold processing plant in Bolivia had been completed and the containerised planthad been transported from Bolivia to the port of Arica in northern Chile whereit was awaiting ship loading and transportation to Egypt. Other than as set out above there has not risen in the interval between the endof the financial year and the date of this report any item, transaction or eventof a material and unusual nature likely in the opinion of the Directors of theCompany to affect significantly the operations of the company, the results ofthose operations, or the state of affairs of the company in subsequent financialyears. This information is provided by RNS The company news service from the London Stock Exchange

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