Quarterly Report

6th Nov 2007 10:09

Centamin Egypt Limited06 November 2007 November 06, 2007 Centamin Egypt Limited ("Centamin" or "the Company") FIRST QUARTER REPORT 30 September 2007 REPORT TO SHAREHOLDERS QUARTERLY HIGHLIGHTS - Sukari Mineral Resource upgraded to 6.84 million ounces of gold Measured and Indicated and 3.6 million ounces of gold Inferred - Record Increase of 800,000 oz Measured and Indicated and 600,000 oz Inferred for the 3 month period - Amun Deeps discovery continues to add significant high grade ounces - Drilling continues to encounter significant mineralization in the Pharaoh Zone - 28,807.63m of drilling was completed during the quarter - Commencement of Grade Control Drilling - Dismantling of the Kori Kollo Processing Plant in Bolivia completed - Dismantling of 28MW Isparta Power Plant Turkey completed - Delivery and Assembly of Mining Fleet Commences - Significant drill intersections for the quarter Amun Zone (9900N - 10700N) - RCD1177 - 65m @ 18.31g/t Au - RCD1155 - 17m @ 3.98 g/t Au - RCD1166 - 23m @ 6.23g/t Au - RCD 1178 - 105m @ 4.10g/t Au and 17m @ 12.45 g/t Au - RCD1187 - 51m @ 4.45g/t Au and 14m @ 4.44g/t Pharaoh Zone (>11200N) - D1164 - 53m @ 3.21g/t Au - RCD756 - 58m @ 3.76g/t - D1179 - 15m @ 4.19g/t Au from surface - D1203 - 148m @ 1.33g/t Au from surface RESOURCE ESTIMATION AND DRILLING PROGRAM The final September Quarter Sukari global resource estimate was calculated 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), a (16%) increaseon the previous quarter. The resource was updated twice during the quarter, themost recent upgrade showed the largest month-on-month increase since drillingstarted in 1997; with 660,000oz being added in a 5 week period, highlighting thesignificance of the Amun Deeps resource extensions, which added over 80% of theincrease. Also of significance is the average grade at the 0.5g/t cut off hasincreased 2.8% for the Measured and Indicated portion (from 1.39 g/t to 1.44 g/t) and 6% in the Inferred grade (from 1.6 g/t to 1.7 g/t) during the quarter. Table 1 - Current Sukari Project Mineral Resource Estimate Mineral Resource (September 2007) Total Measured Indicated (Measured + Indicated) Inferred 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 estimate was independently calculated by Hellman and Schofield PtyLtd ("H&S") and is an estimate of recoverable tonnes and grade using MultipleIndicated Kriging with block support correction. Measured resources exist inareas where drilling is available at a nominal 25 x 25 metre spacing, Indicatedresources occur in areas drilled at approximately 25 x 50 metre spacing andInferred resources exist in areas of broad spaced drilling. The resource modelextends from 9700mN to 12200mN and to a maximum depth of 350RL (a maximum depthof 950 metres below the crest of Sukari Hill). The estimate has been adjustedto present land surfaces and previous underground mining. It was based on110,239 two metre down hole composites and surface rock chip samples, from datareceived up to September 12, 2007. Measured and indicated resources account for 65% of total. Significant growth of the gold resource occurred from 10000N to 10500N,associated with robust and high grade intersections of the down dip extension ofthe Hapi Zone and several deeper mineralisation zones. Gold mineralisation isstill open at depth. Resources are also being added in the Ra and PharaohZones. Recent drilling has intersected strong surface mineralisation in the farnorth of the hill. Amun Deeps (9900 - 10700N) Drilling at Amun Deeps continued to intersect strong mineralisation, addingresource ounces down dip of current geological data, infilling resource blockand geological data gaps at and beneath the pit margins and increasingunderstanding of the mineralisation trends, particularly the high grade HapiZone. Thick zones of strongly mineralised porphyry have been intersected in alldrilling. Drilling will continue in this area for the next few months. Studieshave commenced of the underground mining potential for the deeper parts of themineralisation. Several holes returned strong assays over significant widths (Table 2); mosthave visible gold specks in the high grade Hapi Zone quartz veins, stronglydisrupted geological contacts and areas of higher intensity arsenopyrite andpyrite mineralisation. Recent hole RCD1177 on 10200N, drilled down dip of hole RCD1163 (23m @ 2.60g/tAu from 334m), intersected the Hapi Zone at the hangingwall margin of theporphyry, in a zone of strongly disrupted and altered porphyry and serpentinitewith abundant quartz veining and sulphides, returned extremely high gradeintersection of 65m @ 18.31g/t Au, including the first 5m @ 209.43g/t (Figure2). RCD1173 was drilled to test at depth the southern extension of the porphyry at10000N, following up mineralisation in holes RCD384 and RCD499. Strongmineralisation was intercepted within the porphyry below the Hapi Zone including26m @ 3.59g/t from 384m and 33m @ 2.37g/t from 431m. RCD1173 was not includedin the September resource upgrade, so will add ounces next quarter. Furtherholes RCD1262 and RCD1263 in the same area await diamond drilling tails to testthe mineralised porphyry and infill the resource blocks. Hole RCD1187 was drilled on 10450N to infill the resource model at the pit shellmargin, up dip of high grade hole D1073, and confirmed the position of the HapiZone, intersecting 51m @ 4.45g/t Au from 299m, including a high grade core zoneof 9m @ 15.51g/t from 322m, in a zone of disrupted quartz veining, strongsericite, silica, pyrite and arsenopyrite alteration (Figure 3). Data from thishole was also not included in the latest resource upgrade. Mineralisation intercepted in hole RCD1178 on 10300N added significant ounces tothe September resource model, with 105m @ 4.10g/t from 380m and 17m @ 12.45g/tfrom 500m being returned. The hole targeted the down dip extension of themineralisation in RCD1125 (49m @ 1.86g/t from 340m and 20m @ 1.17g/t from 498m).A further step out hole is planned. Overall drilling and assay results from the Amun Deeps program indicate thethick, strongly mineralised down dip extension of the Hapi Zone in the mainporphyry is very consistent over 500m of strike currently drilled, and willcontinue to add significant ounces to the gold resource (Figure 4). Inaddition, further step out holes down dip of those described above have beenpre-collared for DD tailing to determine down dip width of the porphyry andcontinuity of the strong mineralisation already intersected. Pharaoh Zone - >11200N Drilling continued in the Pharaoh Zone during the quarter, testing the deeperextensions of the Hapi and deeper zones, the footwall contact area at depth andthe shallow, west dipping, surface outcropping Cleopatra and Antonymineralisation zones in the north of the hill. Holes successfully intersectedcontinuous gold mineralisation and added resource ounces in the targeted areas(Table 2). D1164 on 11250N intersected the Hapi Zone at 544m (20m @ 1.33g/t Au), but thebest intersection was at depth, with 53m @ 3.21g/t Au from 711m (including 8m @9.36g/t and 3m @ 11.27g/t) being intersected to the footwall contact. HoleRCD756 on 11425N also intersected a very strong, high grade zone of 58m @ 3.76g/t Au from 791m, including higher grade zones. This and several other similarintersections in the area highlights the underground potential at Sukarithroughout the deposit. Holes D1203 on 11950N and D1205 on 12000N intersected strong near surfacemineralisation, attributed to the outcropping, west dipping, stronglysericite-silica-pyrite-arsenopyrite altered and quartz veined Cleopatra andAntony Zones. D1203 intersected 148m @ 1.33g/t Au from surface, with severalhigher grade zones included; and D1205 returned 14m @ 1.32g/t Au from 9m and112m @ 1.30g/t Au from 48m. Drilling on the NE and NW sides of the northernpart of the hill continues to define these zones. Regional Exploration Drilling is continuing on several near mine prospects, following up anomalousrock chip sample geochemistry, mapped alteration and geological structures. Onehole, SRC002, 900m north of the hill at the Student prospect, returned 2m @9.78g/t Au from 31m. Field investigation continues of other prospects on theexploitation licence such as Umm Kola, and Sukari North. First pass rock chip sampling and geochemistry at the greenfields Sami Southprospect, 5km south along strike of Sukari Hill, returned two 15 - 20m wide goldanomalous zones, 200m apart, in sheared, ferruginous hydrothermally alteredsediments and igneous rocks, with narrow quartz veins and weathered pyriteevident. Peak assay was 1.1g/t Au. Follow up work is continuing. Grade Control Grade control drilling was carried on all available benches during the quarter;in the Amun Zone at 1185RL and 1222RL and 1300RL (Figure 5). 3,547 metres weredrilled by the contractor, Capital Drilling. All assay results were returned by the end of September. Gold mineralisationestimated from grade control modelling corresponds to expected mineralisation inthe resource model; assay results highlight shallow easterly and westerlydipping structures. Project Finance During the quarter, the due diligence process with Barclays Capital, theinvestment banking division of Barclays Bank PLC, continued with the drafting ofvarious project facility and supporting agreements. Completion of the project financing schedule has been moved out to the firstquarter of next year to accommodate the work schedule of all parties involved inthe process. Construction Camp Completion of the 700 man accomodation facility is nearing finalisation withseveral of the first accomodation parcels being ready for occupation during themiddle part of quarter four. The accomodation facilities are a combination ofthe traditional dome style bricked facility and conventional demountable style. Concrete has been poured for the kitchen facility, fit out equipment ordered andthe Company is scheduled to take possession of the new facility towards the endof the year. Site Works Upgrading of the 10km access road to the Sukari site, container lay downfacilities and security hut complex facilities have all been completed.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 during the quarter performinggeotechnical investigations. Final design and appropriate bid documentation willbe completed during the quarter. Project Engineering and Design A contract for the engineering and design work for the process plant was awardedin mid-March to MetPlant Engineering Services Pty Ltd, an Australian-basedcompany. A technical team visited Bolivia (April 2007) to review the Kori Kolloprocessing plant dismantling progress and travelled onto Egypt in early May tothe Sukari plant site location. Data and information gathered from these visitswill be used to finalise design and engineering work. Completion of this work isscheduled for the fourth quarter of 2007. Seawater Supply System Tender documents were distributed during the quarter for the Seawater SupplySystem which will, draw in and transport raw seawater, via a staged pumpedpipeline, to the Sukari site where it will be processed through a desalinationplant for end use as process plant water, mine site dust suppression water andafter secondary processing and treatment for construction camp drinking water. Finalisation of the tender responses will occur during the fourth quarter of2007. Kori Kollo Process Plant / Isparta Power Station On October 24, 2007, the Company announced that both the Kori Kollo processingplant and the Isparta power plant had arrived safely at the Egyptian seaport ofAlexandria and their cargoes had been discharged. The dismantling of the KoriKollo processing facility in Bolivia and the Isparta 28MW power plant in Turkeywas completed in September and both sites were closed and signed off. All stafffrom Bolivia and Turkey have now relocated to Egypt to continue with thereassembly of the plants at Sukari. The Isparta power plant consisted of 24pieces of break bulk and 56 containers containing more than 900 individualpackages. The Kori Kollo processing plant comprised 270 pieces of break bulk and55 containers. Trucking of freight has now commenced to the Sukari site and is expected to takeseveral weeks. This latest development represents an exciting phase for theCompany as it takes another step towards the commissioning of the first moderngold mine in Egypt which is scheduled for the fourth quarter of 2008. Mining Caterpillar, through their Egyptian authorised dealer Mantrac, has been selectedas the supplier of haulage trucks, articulated dump trucks, excavators, gradersand dozers. The initial mining 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 D10R 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) During the quarter assembly of the five CAT 785C Rear Dump Trucks and one RH120E Excavator commenced after successful arrival of the equipment in the Portof Alexandria and subsequent transportation to the Sukari site. In October, theCompany took active possession of the RH 120E Excavator after a successfulcompletion test and handover to Company personnel. During the fourth quarter theCompany will take possession of the balance of the mining fleet and is scheduledto commence mining activity in December 2007. Owners Team The Company's organisational structure continues to grow with several keyappointments being made in the quarter. In a booming resource market, theCompany is very pleased with the quality of the personnel that have beenattracted to the project and the positions below have now been filled. TheCompany will continue with 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 Sukari Gold Project Sukari Gold Project - 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 Gold Project, located in the Eastern Desert of Egypt. The SukariGold Project is at an advanced stage of development, with construction havingcommenced in quarter two of 2007 and first gold production expected during thefourth quarter of 2008. A definitive feasibility study (the "DFS") for the development to commercialproduction of the Sukari Gold Project was completed in February 2007. A summary of the findings of the DFS were: • the DFS concluded that a 4mpta 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. The Sukari Gold 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. The Sukari Gold Project is hosted by a large, sheeted vein-type andbrittle-ductile shear zone hosted gold deposit developed in a granitoidintrusive complex. Gold mineralization is hosted exclusively by a granitoid bodyof granodiorite - tonalite composition referred to as the Sukari Porphyry. TheCompany has entered into a Concession Agreement with the Egyptian Governmentthat provides for exploration and exploitation rights at the Sukari Gold Projectand whereby the Operating Company, owned 50% by the Company's wholly ownedsubsidiary, Pharaoh Gold Mines NL ("PGM") and 50% by Egyptian Mineral ResourceAuthority ("EMRA"), has been established. Centamin is entitled to recover all ofits exploration, operating and capital costs from operating surpluses of theoperating company. The Sukari Mining License covers an area of 160 km2 and is for a period of 30years, with an option for a further 30 years. The Sukari Gold Project has been scheduled for open pit mining over an initial15-year period. During that time 78 Mt ore @ 1.5 g/t Au is expected to be mined,producing 3.7 Moz gold. A further 374 Mt of waste material is also expected tobe mined resulting in a waste to ore strip 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 cutoffgrade 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 production fleet will bebased on 380 t class excavators and 150 t class rigid body trucks. At fullproduction, three production fleets, each comprising a single excavator andsharing a maximum of 21 trucks, will be required. The capital cost of theinitial mining fleet has been estimated by AMC 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 500 construction employees and 20 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 2007 Commence Site Works Q3 2007 Commence Tailings Storage Facility Q4 2007 Kori Kollo Plant Arrives Egypt Q4 2007 (Completed) Commence Mining Pre-strip Q4 2007 Project Finance Q1 2008 Commissioning and Production Q4 2008 Progress pictures can be viewed on the Company's website - www.centamin.com. On behalf of Centamin Egypt Limited Josef El-Raghy Managing Director/CEO November 06, 2007 Information in this report which relates to exploration, geology, sampling anddrilling is based on information compiled by geologist Mr R Osman who is a fulltime employee of the Company, and is a member of the Australasian Institute ofMining and Metallurgy with more than five years experience in the fields ofactivity being reported on, and is a 'Competent Person' for this purpose and isa "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. Table 2 - Significant Intersections September 2007 Quarter HOLE NORTH EAST DIP AZI EOH FROM TO INTERVAL Au ppm RCD714 11225 10957 -90 0 296.8 208 217 9 7.50 incl. 209 211 2 28.70 RCD756 11425 10620 -90 0 877.5 791 849 58 3.76 incl. 809 816 7 7.05 incl. 820 825 5 14.84 RCD778 11825 10895 -75 270 599.6 76 128 52 1.09 RCD1125 10300 10700 -86 270 590.6 340 389 49 1.86 incl. 348 349 1 30.00 396 425 29 1.00 498 518 20 1.17 RCD1162 10250 10700 -87 270 570.5 347 422 75 1.94 incl. 349 351 2 5.48 incl. 362 363 1 13.6 incl. 403 407 4 10.04 RCD1163 10200 10650 -85 270 573.3 334 361 27 2.33 incl. 336 339 3 12.73 D1164 11250 10672 -90 0 764.5 361 371 10 1.98 incl. 361 365 4 3.09 544 564 20 1.33 711 764 53 3.21 incl. 728 736 8 9.36 incl. 752 755 3 11.27 RCD1165 10150 10663 -80 270 719.4 338 366 28 1.40 incl. 348 349 1 10.70 371 388 17 3.98 incl. 375 376 1 12.30 incl. 382 383 1 41.60 RCD1166 10100 10611 -87 270 534.5 279 302 23 6.23 incl. 279 281 2 13.40 incl. 288 289 1 14.90 incl. 296 297 1 14.70 309 377 68 1.89 incl. 336 337 1 9.93 incl. 363 364 1 11.20 419 469 50 1.07 RCD1173 10000 10675 -77 270 571.00 364 368 4 3.04 384 410 26 3.59 incl. 384 385 1 27.30 incl. 405 406 1 35.70 415 464 49 1.79 incl. 432 433 1 8.75 incl. 438 439 1 9.32 incl. 445 447 2 6.27 incl. 454 455 1 6.47 RCD1177 10200 10706 -87 270 727.1 367 432 65 18.31 incl. 367 372 5 209.43 incl. 370 371 1 1040.00 RCD1178 10300 10758 -85 270 617.6 380 485 105 4.10 incl. 380 382 2 29.20 incl. 412 413 1 71.90 incl. 424 426 2 12.36 incl. 466 469 3 14.24 incl. 472 474 2 17.24 500 517 17 12.45 incl. 501 503 2 76.35 incl. 516 517 1 12.45 D1179 11850 10825 -40 270 265.15 0 15 15 4.19 incl. 6 8 2 15.3 incl. 12 13 1 6.96 134 153 19 1.45 RCD1186 10400 10749 -85 270 639.5 341 377 36 1.91 incl. 341 342 1 5.32 incl. 358 359 1 5.87 incl. 371 372 1 6.30 incl. 374 375 1 16.10 449 455 14 3.32 RCD1187 10450 10750 -70 270 452.7 299 350 51 4.45 incl. 304 305 1 36.00 incl. 322 331 9 15.51 383 397 14 4.44 incl. 383 384 1 43.50 RCD1189 10050 10560 -87 270 485.6 155 180 25 1.71 incl. 173 174 1 7.49 219 239 20 2.46 incl. 234 237 3 6.45 251 282 31 1.62 incl. 273 275 2 6.06 D1203 11950 10820 -45 270 248.72 0 148 148 1.33 incl. 55 56 1 5.93 incl. 62 66 4 5.25 incl. 90 91 1 6.43 D1205 12000 10823 -45 270 165.12 9 23 14 1.32 48 160 112 1.30 incl. 60 61 1 9.94 incl. 75 76 1 5.95 incl. 85 86 1 12.70 incl. 99 100 1 13.60 incl. 109 110 1 6.15 D1208 11775 10848 -90 0 153.58 47 78 31 1.23 D1209 11800 10806 -60 270 598.6 465 490 25 2.33 incl. 485 487 2 7.26 incl. 465 466 1 15.30 incl. 473 474 1 11.20 RCD1213 10500 10500 -75 270 289 108 136 28 2.56 incl. 123 126 3 10.75 166 192 26 4.28 incl. 170 171 1 13.70 incl. 174 177 3 20.97 245 264 19 1.57 incl. 246 247 1 6.69 SRC004 12827 10914 -60 150 180 31 33 2 9.78 MANAGEMENT DISCUSSION AND 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 Interim ConsolidatedFinancial Statements for the three months ended September 30, 2007 which areunaudited. The effective date of this report is November 06, 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 Unaudited interim Consolidated Financial Statements for thethree months ended September 30, 2007 in order to comply with applicableCanadian securities law, as the Company is listed on the Toronto Stock Exchange. Additional information relating to the Company, including the Company's mostrecent Annual Report for the year ended June 30, 2007 and other publicannouncements is available at www.centamin.com. All amounts in this MD&A are expressed in United States 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 similar expressionsthat are forward looking statements. Forward looking statements include, withoutlimitations, the information concerning possible or assumed further results ofoperations as set forth herein. These statements are not historical facts butinstead represent only expectations, estimates and projections regarding futureevents and are qualified in their entirety by the inherent risks anduncertainties 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, with construction havingcommenced in March 2007 and first gold production expected during the fourthquarter 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 3.7M oz 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$290/oz. The Sukari Project will be the first large-scale modern gold mine to bedeveloped in Egypt. Centamin's operating experience in Egypt gives it asignificant first-mover advantage in acquiring and developing other goldprojects in the prospective Arabian-Nubian Shield. SELECTED FINANCIAL INFORMATION FROM THE UNAUDITED INTERIM CONSOLIDATED INCOMESTATEMENTS Three Months Ended Three Months Ended September 30, 2007 September 30, 2006 US$ US$ Revenue 1,512,838 553,351 Other income 1,840 - Corporate administration expenses (553,591) (399,356) Foreign exchange gain 5,512,072 201,614 Share based payments (787,453) - Other expenses (155,831) (4,587) Profit before income tax 5,529,875 351,022 Tax (expense)/income - - Net profit for the period 5,529,875 351,022 Earnings per share- Basic (cents per share) 0.732 0.061- Diluted (cents per share) 0.711 0.060 Results for the Three Months Ended September 30, 2007 Revenue of $1,512,838 comprises interest revenue applicable on the Company'savailable cash and working capital balances and term deposit amounts. Thereported figure is significantly higher than for the corresponding period lastyear due to the higher average cash holdings. Other income of $1,840 represents value added tax refunded to the Company on anoverseas purchase. Corporate administration expenses of $553,591 comprise expenditure incurred forcommunications, consultants, directors' fees, stock exchange listing fees, shareregistry fees, employee salaries and general office administration expenses. Theamount reported is higher than last period due to increased compliance costsassociated with the Company's listings on three separate stock exchanges. Foreign exchange gain of $5,512,072 is attributable to positive exchange ratemovements during the period as a result of the weakening United States dollaragainst the Canadian dollar. Share based payments of $787,453 relate to the requirement to recognise the costof granting options to directors, company executives and employees under AIFRSover the option vesting period. Other expenses of $155,830 comprise non-cash expenses for depreciation andemployee entitlements. The profit after tax of the consolidated entity for the three months endedSeptember 30, 2007 was $5,529,875. SELECTED FINANCIAL INFORMATION FROM THE UNAUDITED INTERIM CONSOLIDATED BALANCESHEETS September 30, 2007 June 30, 2007 US$ US$ Total current assets 120,858,810 136,735,715 Total non-current assets 105,032,814 81,982,697 Total assets 225,891,624 218,718,412 Total current liabilities 7,155,532 6,367,968 Total non-current liabilities 150,000 150,000 Total liabilities 7,305,532 6,517,968 Net assets 218,586,092 212,200,444 Current assets have decreased to $120,858,810 at September 30, 2007 primarilydue to the application of funds against development expenditures at the Sukariproject. Non-current assets have increased to $105,032,814 at September 30, 2007 as aresult of the expenditure incurred ongoing exploration resource drilling atSukari and initial construction activities at Sukari. The Company's accountingpolicy is to capitalise expenditure of this nature under the categories ofProperty, Plant and Equipment and Exploration, Evaluation & Development. Current liabilities have increased to $7,155,532 at September 30, 2007 due tothe acquisition of a second hand power plant in Turkey and trade creditorsbalance higher as a result of increased activity at the Sukari Gold project. Theacquisition price of the second hand power plant was US$9.75M of which US$1.97Mremains to be paid, as at September 30, 2007 as the final payment of thistransaction. Non-current liabilities as at September 30, 2007 remain unchanged. SELECTED FINANCIAL INFORMATION FROM THE UNADUITED INTERIM CONSOLIDATEDSTATEMENTS OF CHANGES IN EQUITY Three Months Ended September 30, 2007 US$ Total equity at beginning of period 212,400,444 Movement in issued equity 98,160 Movement in reserves 757,613 Profit for the period 5,529,875 Total equity at end of period 218,586,092 Issued equity has increased due to the exercise of employee options. Reserves have increased due to the effect of expensing share based optionpayments. Profit for the three months ended September 30, 2007 is analysed under thesection Consolidated Income Statement. SELECTED FINANCIAL INFORMATION FROM THE UNAUDITED INTERIM CONSOLIDATED CASH FLOWSTATEMENTS Three Months Ended Three Months Ended September 30, 2007 September 30, 2006 US$ US$ Net cash flow from operating activities (2,262,676) 21,187Net cash flow from investing activities (19,812,403) (3,003,705)Net cash flow from financing activities (381,059) 96,977 Net decrease in cash and cash equivalents (22,456,138) (2,885,541) Cash and cash equivalents at the beginning of the financial period 136,501,015 44,513,500 Effects of exchange rate changes 5,678,075 191,343 Cash and cash equivalents at the end of the financial period 119,722,952 41,819,302 Three Months Ended September 30, 2007 The net cash flow from operating activities for the three months ended September30, 2007 of $2,262,676 is attributable to payments for corporate salary andwages, corporate administration and compliance related costs offset by interestrevenue received. The net cash flow from investing activities for the three months ended September30, 2007 of ($19,812,403) is attributable to exploration expenditure of$2,777,812 and Sukari development expenditure of $17,034,591. The net cash flow from financing activities for the year ended September 30,2007 of ($381,059) is attributable to equity raised through exercise of employeeshare options offset by project financing due diligence expenditure beingincurred. The overall net decrease in cash for the three months ended September 30, 2007of $22,456,138, excluding the effect of exchange rate movements, results in aclosing cash balance of $119,722,952. LIQUIDITY AND CAPITAL RESOURCES The Company's principal source of liquidity as at September 30, 2007 is cash of$119,722,952 (September 30, 2006 - $41,819,302). Of this amount $118,972,281 hasbeen invested in daily rolling short term higher interest money market deposits. The Company's principal sources of cash for the three months ended September 30,2007 were proceeds from cash investments and interest revenue received from cashinvestments. The following is a summary of the Company's outstanding commitments as atSeptember 30, 2007: Payments due Total Less than 1 year 1 to 5 years US$ US$ US$ Turkish Power Plant 1,957,000 1,957,000 -Creditors 4,625,873 4,625,873 -Total commitments 6,582,873 6,582,873 - The Company's financial commitments are limited to controllable discretionaryspending on work programs at the Sukari Project, administration expenditure atthe Egyptian and Australia office locations and for general working capitalpurposes. The Company's financial obligations in relation to the Turkish power plant arelimited to the following: • A US$9.75 million series of progressive payments relating to theacquisition of a second hand power generation plant acquired in February 2007and presently located in Turkey. The first payment of US$1.9 million was madeupon signing of the sale and purchase contract in February 2007, the second andthird payments of US$1.9 million each were paid on April 30, 2007 and August 13,2007, and the final payment was due upon the earlier of power plant location orthe expiry date of a letter of credit established as security for the payments.This expiry date was October 9, 2007. This final payment was made on October 1,2007. On April 17, 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. During the quarter, the due diligence process with Barclays Capital, theinvestment banking division of Barclays Bank PLC, continued with the drafting ofvarious project facility and supporting agreements. Completion of the projectfinancing schedule has been moved out to the first quarter of next year toaccommodate the work schedule of all parties involved in the process. Other than described above the company has no other off balance sheetarrangements. OUTSTANDING SHARE INFORMATION As at November 06, 2007 the Company had 757,069,232 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 November 06, 2007 Number Shares on Issue 757,069,232Options issued but not exercised 12,405,000Warrants issued by not exercised 8,794,691 778,268,923 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 June 30, 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 quarter ended September 30, 2007 that havematerially affected, or are reasonably likely to materially affect, its internalcontrol over financial reporting. FINANCIAL INSTRUMENTS At September 30, 2007 the Company has exposure to interest rate risk which islimited to 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 the three months ended September 30, 2007 aresummarised below: - Salaries, superannuation contributions, consulting andDirectors fees paid to Directors during the three months ended September 30,2007 amounted to A$429,865 (September 30, 2006: A$201,265). - Mr S El-Raghy and Mr J El-Raghy are Directors andshareholders of El-Raghy Kriewaldt Pty Ltd ("ELK"), which provides officepremises to the Company in Australia. All dealings with ELK are in the ordinarycourse of business and on normal terms and conditions. Rent paid to ELK duringthe three months ended September 30, 2007 amounted to A$15,315 (September 30,2006: A$13,395). - Mr S El-Raghy provides office premises to the Company inAlexandria, Egypt. All dealings are in the ordinary course of business and onnormal terms and conditions. Rent paid during the three months ended September30, 2007 amounted to GBP 1,950 (September 30, 2006: GBP 1,950). - Mr C Cowden, a non-executive director, is also a directorand shareholder of Cowden Limited, which provides insurance broking services tothe Company. All dealings with Cowden Limited are in the ordinary course ofbusiness and on normal terms and conditions. Insurance premiums paid to CowdenLimited during the three months ended September 30, 2007 amounted to A$33,541(September 30, 2006: A$846). SUBSEQUENT EVENTS On November 01, 2007 the Company announced that it has entered into an agreementwith Westwind Partners Inc. as lead underwriter on behalf of a syndicate ofunderwriters to purchase, on a bought deal private placement basis, 83,333,334special warrants of the Company at a price of C$1.20 per special warrant, foraggregate gross proceeds of C$100,000,001 (the "Offering"). As a result of thisraising the Company is debt free, unhedged and able to aggressively pursuefurther exploration and the underground development of the newly discovered highgrade Amun Deeps. Other than as set out above there has not risen in the interval between the endof the financial year and the date of this report any item, transaction or eventof a material and unusual nature likely in the opinion of the Directors of theCompany to affect significantly the operations of the company, the results ofthose operations, or the state of affairs of the Company in subsequent financialyears. The accompanying Interim Consolidated Financial Statements for the quarter endedSeptember 30, 2007 have been prepared in accordance with Australian Equivalentsto International Financial Reporting Standards and has not been audited by theCompany's Auditors. UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENTS Three Months Ended Three Months Ended September 30, 2007 September 30, 2006 US$ US$ Revenue - Note 4 1,512,838 553,351 Other income - Note 4 1,840 - Administration expenses (553,591) (399,356) Foreign exchange gain 5,512,072 201,614 Share based payments (787,453) - Other expenses (155,831) (4,587) Profit before income tax 5,529,875 351,022 Tax (expense)/income - - Net profit for the period 5,529,875 351,022 Earnings per share- Basic (cents per share) 0.732 0.061- Diluted (cents per share) 0.711 0.060 The above Unaudited Interim Consolidated Income Statements should be read in conjunction with the accompanying notes. UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS September 30, 2007 June 30, 2007 US$ US$ CURRENT ASSETSCash and cash equivalents 119,722,952 136,501,015Trade and other receivables 39,258 86,893Inventories 808,637 140,400Prepayments 287,963 7,407Total current assets 120,858,810 136,735,715 NON-CURRENT ASSETSPlant and equipment 12,000,080 12,067,243Exploration, evaluation and development expenditure - Note 5 93,032,734 69,915,454Total non-current assets 105,032,814 81,982,697 Total assets 225,891,624 218,718,412 CURRENT LIABILITIESTrade and other accounts payable 6,604,983 5,910,093Provisions 550,549 457,875Total current liabilities 7,155,532 6,367,968 NON-CURRENT LIABILITIESTrade and other accounts payable 150,000 150,000Total non-current liabilities 150,000 150,000 Total liabilities 7,305,532 6,517,968 NET ASSETS 218,586,092 212,200,444 EQUITYIssued Capital - Note 7 218,013,229 217,915,069Reserves 6,805,353 6,047,740Accumulated losses (6,232,490) (11,762,365) TOTAL EQUITY 218,586,092 212,200,444 The above Unaudited Interim Consolidated Balance Sheets should be read in conjunction with the accompanying notes. UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Issued Options Reserve Accumulated Capital Reserves US$ Losses Total US$ US$ US$ US$ At June 30, 2006 94,219,681 2,294,794 433,192 (18,646,792) 78,300,875Profit for the period - - - 6,884,427 6,884,427Share options exercised 364,185 - - - 364,185Cost of share based payments - - 3,376,854 - 3,376,854Contributions of equity 123,274,103 - - - 123,274,103Transfer to issued capital 57,100 - (57,100) - -At June 30, 2007 217,915,069 2,294,794 3,752,946 (11,762,365) 212,200,444Profit for the period - - - 5,529,875 5,529,875Share options exercised 68,320 - - - 68,320Cost of share based payments - - 787,453 - 787,453Contributions of equity - - - - -Transfer to issued capital 29,840 - (29,840) - -At September 30, 2007 218,013,229 2,294,794 4,510,559 (6,232,490) 218,586,092 The above Unaudited Interim Consolidated Statement of Changes in Equity shouldbe read in conjunction with the accompanying notes. UNAUDITED INTERIM CONSOLIDATED CASH FLOW STATEMENT Three Months Ended Three Months Ended September 30, 2007 September 30, 2006 US$ US$ CASH FLOWS FROM OPERATING ACTIVITIESPayments to suppliers and employees (3,775,514) (532,164)Interest received 1,512,838 553,351Net cash generated by/(used in) operating activities (2,262,676) 21,187 CASH FLOWS FROM INVESTING ACTIVITIESPayments for exploration (2,777,812) (3,003,705)Payments for development (17,034,591) -Net cash generated by/(used in) investing activities (19,812,403) (3,003,705) CASH FLOWS FROM FINANCING ACTIVITIESProceeds from the conversion of options 68,320 91,294Project finance due diligence costs (276,301) -Financial activity (bank charges) (173,078) 5,683Net cash generated by/(used in) financing activities (381,059) 96,977 Net decrease in cash and cash equivalents (22,456,138) (2,885,541) Cash and cash equivalents at the beginning of the period 136,501,015 44,513,500 Effects of exchange rate changes on the balance of cash held in foreign 5,678,075 191,343currencies Cash and cash equivalents at the end of the period 119,722,952 41,819,302 The above Interim Consolidated Cash Flow Statements should be read in conjunction with the accompanying notes. NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations, Going Concern and Accounting Policies Statement of Compliance Centamin Egypt Limited (the 'Company') and its subsidiaries (collectively 'theGroup') are engaged in the exploration for precious and base metals located inthe western desert region of Egypt. The Company was incorporated under theCorporations Law of South Australia on March 24, 1970. These consolidated financial statements have been prepared in accordance withAustralian general accepted accounting principles, as applicable to a goingconcern. Accordingly, they do not give effect to adjustments that would benecessary should the Company be unable to continue as a going concern andtherefore be required to realise its assets and liquidate its liabilities andcommitments in other than the normal course of business and at amounts differentfrom those in the accompanying consolidated financial statements. The Companyhas a need for financing for working capital, and the exploration anddevelopment of its mineral properties. The Company's continuance as a goingconcern is dependent upon its ability to obtain adequate financing and to reachprofitable levels of operations. It is not possible to predict whether financingefforts will be successful or if the Company will attain profitable levels ofoperations. Basis of Preparation The accompanying unaudited interim consolidated financial statements have beenprepared in accordance with generally accepted accounting principles inAustralia. The financial statements are prepared using the same accountingpolicies and methods of application as those disclosed in note 3 to theconsolidated financial statements for the year ended 30 June 2007, but they donot include all the disclosures required by Australian Accounting Standards forannual financial statements. In the opinion of management, all adjustmentsconsidered necessary for fair presentation have been included in these financialstatements. Operating results for the three months ended September 30, 2007 arenot necessarily indicative of the results that may be expected for the full yearending June 30, 2008. For further information see the Company's consolidatedfinancial statements, including notes thereto, for the year ended June 30, 2007. The significant accounting policies which have been adopted in the preparationof these unaudited interim consolidated financial statements are: (A) ACCOUNTS PAYABLE Trade payables and other accounts payable are recognised when the consolidatedentity becomes obliged to make future payments resulting from the purchase ofgoods and services. (B) DEBT AND EQUITY INSTRUMENTS ISSUED BY THE COMPANY Debt and equity instruments are classified as either liabilities or as equity inaccordance with the substance of the contractual arrangement. (C) EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE Exploration and evaluation expenditures in relation to each separate areas ofinterest are recognised as an exploration and evaluation asset in the year inwhich they are incurred where the following conditions are satisfied: i) the rights to tenure of the area of interest are current; and ii) at least one of the following conditions is also met: a) the exploration and evaluation expenditures are expected to be recoupedthrough successful development and exploration of the area of interest, oralternatively, by its sale: or b) exploration and evaluation activities in the area of interest have not atthe reporting date reached a stage which permits a reasonable assessment of theexistence or otherwise of economically recoverable reserves, and active andsignificant operations in, or in relation to, the area of interest arecontinuing. Exploration and evaluation assets are initially measured at cost and includeacquisition of rights to explore, studies, exploration drilling, trenching andsampling and associated activities. General and administrative costs are onlyincluded in the measurement of exploration and evaluation costs where they arerelated directly to operational activities in a particular area of interest. Exploration and evaluation assets are assessed for impairment when facts andcircumstances (as defined in AASB 6 "Exploration for and Evaluation of MineralResources") suggest that the carrying amount of exploration and evaluationassets may exceed its recoverable amount. The recoverable amount of theexploration and evaluation assets (or the cash-generating unit(s) to which ithas been allocated, being no larger than the relevant area of interest) isestimated to determine the extent of the impairment loss (if any). Where animpairment loss subsequently reverses, the carrying amount of the asset isincreased to the revised estimate of its recoverable amount, but only to theextent that the increased carrying amount does not exceed the carrying amountthat would have been determined had no impairment loss been recognised for theasset in previous years. Where a decision is made to proceed with development in respect of a particulararea of interest, the relevant exploration and evaluation asset is tested forimpairment, reclassified to development properties, and then amortised over thelife of the reserves associated with the area of interest once mining operationshave commenced. (D) FOREIGN CURRENCY All foreign currency transactions during the period have been brought to accountusing the exchange rate in effect at the date of the transaction. Foreigncurrency monetary items at balance date are translated at the exchange rateexisting at that date. Non-monetary assets and liabilities carried at fair value that are denominatedin foreign currencies are translated at the rates prevailing at the date whenthe fair value was determined. All exchange differences are brought to accountin the interim consolidated income statement in the financial period in whichthey arise. (E) GOODS AND SERVICES TAX Revenues, expenses and assets are recognised net of the amount of goods andservices tax (GST), except: i. Where the amount of GST incurred is not recoverable from the taxationauthority, it is recognised as part of the cost of acquisition of an asset or aspart of an item of expense; or ii. For receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority isincluded as part of receivables or payables. (F) IMPAIRMENT OF ASSETS (OTHER THAN EXPLORATION AND EVALUATION) At each reporting date, the consolidated entity reviews the carrying amounts ofits tangible and intangible assets to determine whether there is any indicationthat those assets have suffered an impairment loss. If any such indicationexists, the recoverable amount of the asset is estimated in order to determinethe extent of the impairment loss (if any). Where the asset does not generatecash flows that are independent from other assets, the consolidated entityestimates the recoverable amount of the cash-generating unit to which the assetbelongs. Recoverable amount is the higher of fair value less costs to sell and value inuse. In assessing value in use, the estimated future cash flows are discountedto their present value using a pre-tax discount rate that reflects currentmarket assessment of the time value of money and the risks specific to the assetfor which the estimates of future flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated tobe less than its carrying amount, the carrying amount of the asset(cash-generating unit) is reduced to its recoverable amount. Each cashgenerated unit is determined on an area of interest basis. Where an impairment loss subsequently reverses, the carrying amount of the asset(cash-generating unit) is increased to the revised estimate of its recoverableamount, but only to the extent that the increased carrying amount does notexceed the carrying amount that would have been determined had no impairmentloss been recognised for the asset (cash generating unit) in prior years. (G) LOANS AND RECEIVABLES Trade receivables, loans, and other receivables are recorded at amounts due lessany allowance for doubtful debts. (H) PLANT AND EQUIPMENT Plant and equipment, and equipment under finance lease are stated at cost lessaccumulated depreciation and impairment. Plant and equipment will includecapitalised development expenditure. Cost includes expenditure that is directlyattributable to the acquisition of the item as well as the estimated cost ofabandonment. In the event that settlement of all or part of the purchaseconsideration is deferred, cost is determined by discounting the amounts payablein the future to their present value as at the date of acquisition. Depreciation is provided on plant and equipment. Depreciation of capitaliseddevelopment expenditure will be provided on a unit of production basis overrecoverable reserves, whilst on other fixed assets are calculated on a straightline basis so as to write off the cost or other re-valued amount of each assetover its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewedat the end of each annual reporting period. The following estimated useful lives are used in the calculation ofdepreciation: Plant & Equipment & Office Furniture - 4-10 years Motor Vehicles - 2 -8 years (I) PRINCIPLES OF CONSOLIDATION The consolidated financial statements are prepared by combining the financialstatements of all the entities that comprise the consolidated entity, being thecompany (the parent entity) and its subsidiaries as defined in AccountingStandard AASB 127 "Consolidated and Separate Financial Statements". Consistentaccounting policies are employed in the preparation and presentation of theconsolidated financial statements. The consolidated financial statements include the information and results ofeach subsidiary from the date on which the company obtains control and untilsuch time as the company ceases to control such entity. In preparing the consolidated financial statements, all significant intercompanybalances and transactions, and unrealised profits arising within theconsolidated entity are eliminated in full. (J) REVENUE RECOGNITION Interest revenue is recognised on a time proportionate basis that takes intoaccount the effective yield on the financial asset. (K) SHARE-BASED PAYMENTS Employee share options that vested before January 1, 2005 have not beenexpensed. The shares are recognised when the options are exercised and theproceeds are allocated to share capital. Equity-settled share-based payments granted after November 7, 2002 that werevested on or after January 1, 2005, are measured at fair value at the date ofgrant. Fair value is measured under the Black-Scholes option valuation model.The fair value determined at the grant date of the equity-settled share-basedpayments is expensed on a straight-line basis over the vesting period, based onthe consolidated entity's estimate of shares that will eventually vest. (L) SUPERANNUATION FUND The Company contributes to, but does not participate in, compulsorysuperannuation funds on behalf of the Employees and Directors in respect ofsalaries and directors' fees paid. Contributions are charged against income asthey are made. (M) TAXATION Current tax Current tax is calculated by reference to the amount of income taxes payable orrecoverable in respect of the taxable profit or tax loss for the period. It iscalculated using tax rates and tax laws that have been enacted or substantivelyenacted by reporting date. Current tax for current and prior periods isrecognised as a liability (or asset) to the extent that it is unpaid (orrefundable). Deferred tax Deferred tax is accounted for using the comprehensive balance sheet liabilitymethod in respect of temporary differences arising from differences between thecarrying amount of assets and liabilities in the financial statements and thecorresponding tax base of those items. In principle, deferred tax liabilities are recognised for all taxable temporarydifferences. Deferred tax assets are recognised to the extent that it isprobable that sufficient taxable amounts will be available against whichdeductible temporary differences or unused tax losses and tax offsets can beutilised. However, deferred tax assets and liabilities are not recognised ifthe temporary differences giving rise to them arise from the initial recognitionof assets and liabilities (other than as a result of a business combination)which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxabletemporary differences arising from goodwill. Deferred tax assets and liabilities are offset when they relate to income taxeslevied by the same taxation authority and the company/consolidated entityintends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the period Current and deferred tax is recognised as an expense or income in the incomestatement, except when it relates to items credited or debited directly toequity, in which case the deferred tax is also recognised directly in equity, orwhere it arises from the initial accounting for a business combination, in whichcase it is taken into account in the determination of goodwill or excess. Tax Consolidation The Company and all its wholly-owned Australian resident entities are part of atax-consolidated group under Australian taxation law. Centamin Egypt Limited isthe head entity in the tax-consolidated group. Tax expense/income, deferred taxliabilities and deferred tax assets arising from temporary differences of themembers of the tax-consolidated group are recognised in the separate financialstatements of the members of the tax-consolidated group using the "separatetaxpayer within group" approach. Current tax liabilities and assets and deferredtax assets arising from unused tax losses and tax credits of the members of thetax-consolidated group are recognised by the company (as the head entity in thetax-consolidated group). Due to the existence of a tax funding arrangement between the entities in thetax-consolidated group, amounts are recognised as payable to or receivable bythe company and each member of the group in relation to the tax contributionamounts paid or payable between the parent entity and the other members of thetax-consolidated group in accordance with the arrangement. Where the taxcontribution amount recognised by each member of the tax-consolidated group fora particular period is different to the aggregate of the current tax liabilityor asset and any deferred tax asset arising from unused tax losses and taxcredits in respect of that period, the difference is recognised as acontribution to (or distribution to) equity participants. NOTE 2: SEGMENT REPORTING Primary reporting - Business Segments The economic entity is engaged in the business of exploration for precious andbase metals only, which is characterised as one business segment only. Secondary reporting - Geographical Segments The principal activity of the economic entity during the year was theexploration for precious and base metals in Egypt and funding is sourced fromAustralia. NOTE 3: EVENTS SUBSEQUENT TO BALANCE DATE On November 01, 2007 the Company announced that it has entered into an agreementwith Westwind Partners Inc. as lead underwriter on behalf of a syndicate ofunderwriters to purchase, on a bought deal private placement basis, 83,333,334special warrants of the Company at a price of C$1.20 per special warrant, foraggregate gross proceeds of C$100,000,001 (the "Offering"). As a result of thisraising the Company is debt free, unhedged and able to aggressively pursuefurther exploration and the underground development of the newly discovered highgrade Amun Deeps. Other than as set out above there has not risen in the interval between the endof the financial year and the date of this report any item, transaction or eventof a material and unusual nature likely in the opinion of the Directors of theCompany to affect significantly the operations of the company, the results ofthose operations, or the state of affairs of the Company in subsequent financialyears. NOTE 4: REVENUE Three months Three months ended ended September 30, September 30, 2007 2006 US$ US$ (a) RevenueInterest revenue 1,512,838 553,351 (b) Other incomeVAT refund 1,840 - 1,514,678 553,351 NOTE 5: EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE Three months ended Three months ended September 30, 2007 June 30, 2007 US$ US$Exploration and evaluation phase expenditure - At Cost (a)Balance at the beginning of the period 4,627,793 43,733,808Expenditure for the period 2,782,000 3,473,398Transfer to Development phase expenditure - (42,579,413)Balance at the end of the period 7,409,793 4,627,793 Development expenditure - At Cost (a) Balance at the beginning of the period 65,287,661 1,154,038Expenditure for the period 20,335,280 21,554,210Transfer from Exploration and evaluation phase expenditure - 42,579,413Balance at the end of the period 85,622,941 65,287,661Net book value of exploration, evaluation and development phase 93,032,734 69,915,454expenditure (a) Included within the cost amount of exploration evaluation and development assets is $5,311,744 being the excessof consideration over the net tangible assets acquired on the acquisition of Pharaoh Gold Mines NL in January 1999.This amount has been treated as part of the cost of exploration, evaluation and development. Management believe thatthe recovery of these amounts will satisfactorily be made through the exploitation of the project in due course. (b) Development of the Sukari Gold Project commenced in March 2007. Items of development phase expenditure relevantto the project are being separately accounted for as development phase expenditure. NOTE 6: CONTINGENT LIABILITIES The Directors are not aware of any contingent liabilities as at the date ofthese unaudited interim consolidated financial statements. NOTE 7: ISSUED CAPITAL Three months ended Three months ended September 30, 2007 June 30, 2007 US$ US$Fully paid ordinary sharesBalance at beginning of the period 217,915,069 86,838,243 Issue of shares under Employee option plan 68,320 45,810Transfer from share options reserve 29,840 64,492Placements - 130,966,524 Balance at end of the period 218,013,229 217,915,069 Change to the then Corporations Law abolished the authorised capital and parvalue concept in relation to share capital from 01 July 1998. Therefore, theCompany does not have a limited amount of authorised capital and issued sharesdo not have a par value. Fully Paid Ordinary Shares Three months ended Three months ended September 30, 2007 June 30, 2007 Number US$ Number US$ Balance at beginning of the period 755,734,232 217,915,069 579,640,369 86,838,243 Employee share option plan 120,000 68,320 200,000 45,810Transfer from share options reserve - 29,840 - 64,492Placements - - 175,893,863 130,966,524 Balance at end of the period 755,854,232 218,013,229 755,734,232 217,915,069 Fully paid ordinary shares carry one vote per share and carry the right todividends. Share options granted under the employee share option plan In accordance with the provisions of the employee share option plans, as atSeptember 30, 2007, executives and employees have options over 13,370,000ordinary shares. The expiry dates of the granted options are detailed in Note10. Share options granted under the employee share option plan carry no rightsto dividends and no voting rights. Further details of the employee share optionplan are contained in Note 10 to the financial statements. Share warrants on issue As part of the Canadian listing process undertaken during the financial year onthe Toronto Stock Exchange (TSX) the Company was required to issue to itsnominated share broker share warrants as part of the arrangement. Share warrantsare identical in nature to share options however they are differentiated as suchbecause the latter in Canada typically relates to options issued to employeesunder employee share plans. As at 30 June 2007 there were 8,794,691 warrants onissue over and equivalent number of ordinary shares (of which 8,794,691 arevested). Further details of the share warrants are contained in Note 10 to thefinancial statements. NOTE 8: RELATED PARTY TRANSACTIONS The related party transactions for the three months ended September 30, 2007 aresummarised below: - Salaries, superannuation contributions, consulting andDirectors fees paid to Directors during the three months ended September 30,2007 amounted to A$429,865 (September 30, 2006: A$201,265). - Mr S El-Raghy and Mr J El-Raghy are Directors andshareholders of El-Raghy Kriewaldt Pty Ltd ("ELK"), which provides officepremises to the Company in Australia. All dealings with ELK are in the ordinarycourse of business and on normal terms and conditions. Rent paid to ELK duringthe three months ended September 30, 2007 amounted to A$15,315 (September 30,2006: A$13,395). - Mr S El-Raghy provides office premises to the Company inAlexandria, Egypt. All dealings are in the ordinary course of business and onnormal terms and conditions. Rent paid during the three months ended September30, 2007 amounted to GBP 1,950 (September 30, 2006: GBP 1,950). - Mr C Cowden, a non-executive director, is also a directorand shareholder of Cowden Limited, which provides insurance broking services tothe Company. All dealings with Cowden Limited are in the ordinary course ofbusiness and on normal terms and conditions. Insurance premiums paid to CowdenLimited during the three months ended September 30, 2007 amounted to A$33,541(September 30, 2006: A$846). NOTE 9: EARNINGS PER SHARE Basic earnings per share are calculated using the weighted average number ofshares outstanding. Diluted earnings per share are calculated using the treasurystock method. In order to determine diluted earnings per share, the treasurystock method assumes that any proceeds from the exercise of dilutive stockoptions and warrants would be used to repurchase common shares at the averagemarket price during the period, with the incremental number of shares beingincluded in the denominator of the diluted earnings per share calculation. Thediluted earnings per share calculation excludes any potential conversion ofoptions and warrants that would increase earnings per share. The weighted average number of ordinary shares used in the calculation of basicearnings per share is 755,786,243 (September 30, 2006: 578,745,369). Theweighted average number of ordinary shares used in the calculation of dilutedearnings per share is 778,268,923 (September 30, 2006: 586,385,369). Theearnings used in the calculation of basic and diluted earnings per share isUS$5,529,875 (September 30, 2006: US$351,022). NOTE 10: SHARE BASED PAYMENTS The consolidated entity has an Employee Share Option Plan in place forexecutives and employees. Options are issued to key management personnel under the Employee Option Plan2006 (previously the Employee Option Plan 2002) as part of their remuneration.Options are offered to key management personnel at the discretion of theDirectors, having regard, among other things, to the length of service with theconsolidated entity, the past and potential contribution of the person to theconsolidated entity and in some cases, performance. Each employee share option converts into one ordinary share of the Company onexercise. The options carry neither rights to dividends nor voting rights.Options vest over a period of 12 months, with 50% vesting and exercisable aftersix months and the other 50% vesting and exercisable after 12 months of issue.All options are issued with a term of three years. At the discretion of theDirectors part or all of the options issued to an executive or employee may besubject to performance based hurdles. No performance based hurdles have beenapplied for issues granted to date. In addition options (Series 6) were issued to the Company's share broker inCanada as a gratitude payment for professional services provided during thelisting process on the Toronto Stock Exchange in January 2007. Details of thoseoptions were: • Exercisable any time within 2 years of grant date. The following reconciles the outstanding share options granted under theEmployee Share Option Plan, and other share based payment arrangements, at thebeginning and end of the financial year: Three months Three months ended ended September 30, September 30, 2007 2006 Number of Number of options options Balance at beginning of the period (a) 13,490,000 7,840,000Granted during the period - -Forfeited during the period - -Exercised during the period (b) (120,000) (450,000)Expired during the period - -Balance at the end of the period (c) 13,370,000 7,390,000Exercisable at the end of the period 7,732,500 2,475,000 a) Balance at the start of the period Options series Number Grant date Expiry / Exercise Fair value at Exercise Date price grant date A$ A$ Series 1 395,000 04/02/05 04/02/08 0.2804 0.1357Series 2 200,000 17/02/05 17/02/08 0.2804 0.1435Series 3 1,700,000 31/10/05 31/10/10 0.3500 0.1753Series 4 1,500,000 08/12/05 08/12/08 0.4355 0.1495Series 5 250,000 30/08/06 30/08/09 0.6566 0.2785Series 6 2,000,000 10/01/07 10/01/09 0.8000 0.2393Series 7 3,615,000 31/01/07 31/01/10 0.7106 0.3518Series 8 2,330,000 24/05/07 24/05/10 1.0500 0.4661Series 9 1,500,000 25/06/07 25/06/10 1.1636 0.3210 13,490,000 b) Exercised during the period Three months ended Number Exercise Date Share priceSeptember 30, 2007 exercised at exercise date A$ Issued 04 February 2005 50,000 18/07/07 1.280Issued 31 January 2007 10,000 08/08/07 1.275 15,000 12/09/07 1.210 10,000 24/09/07 1.390 35,000 27/09/07 1.330 120,000 c) Balance at the end of the period Options series Number Grant date Expiry / Exercise Fair value at Exercise Date price grant date A$ A$Series 1 395,000 04/02/05 04/02/08 0.2804 0.1357Series 2 150,000 17/02/05 17/02/08 0.2804 0.1435Series 3 1,700,000 31/10/05 31/10/10 0.3500 0.1753Series 4 1,500,000 08/12/05 08/12/08 0.4355 0.1495Series 5 250,000 30/08/06 30/08/09 0.6566 0.2785Series 6 2,000,000 10/01/07 10/01/09 0.8000 0.2393Series 7 3,545,000 31/01/07 31/01/10 0.7106 0.3518Series 8 2,330,000 24/05/07 24/05/10 1.0500 0.4661Series 9 1,500,000 25/06/07 25/06/10 1.1636 0.3210 13,370,000 NOTE 11: SHARE WARRANTS The following share warrants were in existence during the current reportingperiod:- Warrants series Number Grant date Expiry Date Exercise price Fair value at grant date C$ A$ Series 1 3,751,431 05/04/2007 05/04/2009 0.8600 0.3011Series 2 4,429,678 13/04/2007 11/04/2009 0.8600 0.2743Series 3 613,582 20/04/2007 20/04/2009 0.8600 0.2868 8,794,691 Share warrants are specific to the Company's listing on the Toronto StockExchange (TSX) and retain the same characteristics as share options but arereferred to separately under the TSX listing rules. a) Exercised during the period There were no share warrants exercised during the three months ended September30, 2007. NOTE 12: Impact of reconciliation between Australian accounting standards andCanadian GAAP There are no material differences between the Income Statements, Balance Sheets,Statement of Changes in Equity and Cash Flow Statements presented underAustralian accounting standards and Canadian GAAP. The Company would be required under Canadian GAAP to adopt the provisions ofSections 3855 (Financial Instruments - Recognition and Measurement), 3861(Financial Instruments - Disclosure and Presentation) and 1530 (ComprehensiveIncome) from July 1, 2007 which address the classification, recognition andmeasurement of financial instruments in the financial statements and theinclusion of other comprehensive income. These new standards require that theCompany identifies all financial instruments and accounts for these financialinstruments at their fair value. Costs associated at the recognition date withthese financial standards can be either immediately expensed or offset againstthe fair value of the financial instruments. The Company has elected to expense all costs associated with the acquisition offinancial instruments. Financial assets are classified as one of the followinggroupings: loans and receivables, assets held to maturity, available for salefinancial assets or assets held for trading. Changes in the fair value ofavailable for sale financial assets are taken to equity and reported in the newStatement of Comprehensive Loss, until the financial asset is eitherderecognized or impaired, where it is then accounted for in the Statement ofOperations. Changes in the fair value of assets held for trading are reflectedin the Statement of Operations. Assets held to maturity and loans andreceivables are measured at amortised cost. Financial liabilities are classifiedas either trading or at amortised costs. Comparative periods have not beenadjusted to reflect the implementation of these new standards. In addition to recognising the unrealized fair value changes in available forsale financial assets in the Statement of Comprehensive Loss, unrealized gainsand losses on translating financial statements of self sustaining foreignoperations, unrealized gains and losses on foreign currency translationassociated with hedges, donations from non-owners and appraisal creditincreases are also recognized in the new statement. As the company does not presently hold any financial instruments for whichamounts would be required to be recognised in a Statement of Comprehensive, thisstatement has not been presented in this report. Form 52-109F2 - Certification of Interim Filings I, Mark Smith, Chief Financial Officer of Centamin Egypt Limited, certify that: 1. I have reviewed the interim filings (as this term is defined inMultilateral Instrument 52-109 Certification of Disclosure in Issuers' Annualand Interim Filings) of Centamin Egypt Limited (the issuer) for the interimperiod ended September 30, 2007; 2. Based on my knowledge, the interim filings do not contain any untruestatement of a material fact or omit to state a material fact required to bestated or that is necessary to make a statement not misleading in light of thecircumstances under which it was made, with respect to the period covered by theinterim filings; 3. Based on my knowledge, the interim financial statements together withthe other financial information included in the interim filings fairly presentin all material respects the financial conditions, results of operations andcash flows of the issuer, as of the date and for the period presented in theinterim filings; 4. The issuer's other certifying officers and I are responsible forestablishing and maintaining disclosure controls and procedures for the issuer,and we have designed such disclosure controls and procedures, or caused them tobe designed under our supervision, to provide reasonable assurance that materialinformation relating to the issuer, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the periodin which the interim filings are being prepared. Mark Smith Chief Financial Officer Egypt : November 06, 2007 Form 52-109F2 - Certification of Interim Filings I, Josef El-Raghy, Managing Director/CEO of Centamin Egypt Limited, certifythat: 1. I have reviewed the interim filings (as this term is defined inMultilateral Instrument 52-109 Certification of Disclosure in Issuers' Annualand Interim Filings) of Centamin Egypt Limited (the issuer) for the interimperiod ended September 30, 2007; 2. Based on my knowledge, the interim filings do not contain any untruestatement of a material fact or omit to state a material fact required to bestated or that is necessary to make a statement not misleading in light of thecircumstances under which it was made, with respect to the period covered by theinterim filings; 3. Based on my knowledge, the interim financial statements together withthe other financial information included in the interim filings fairly presentin all material respects the financial conditions, results of operations andcash flows of the issuer, as of the date and for the period presented in theinterim filings; 4. The issuer's other certifying officers and I are responsible forestablishing and maintaining disclosure controls and procedures for the issuer,and we have designed such disclosure controls and procedures, or caused them tobe designed under our supervision, to provide reasonable assurance that materialinformation relating to the issuer, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the periodin which the interim filings are being prepared. Josef El-Raghy Managing Director Egypt : November 06, 2007 This information is provided by RNS The company news service from the London Stock Exchange

---

Related Shares:

Centamin PLC