Quarterly Report

Centamin Egypt Limited 31 October 2007 31 October 2007 Centamin Egypt Limited ('Centamin' or 'the Company') Quarterly Report for the Quarter Ended 30 September 2007 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 • 28,807.63 metres 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 . RCD1165 - 17m @ 3.98g/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 be 148.45Mt @ 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% increase on the previous quarter. The resource was updated twice during the quarter, the most recent upgrade showed the largest month-on-month increase since drilling started in 1997; with 660,000oz being added in a 5 week period, highlighting the significance of the Amun Deeps resource extensions, which added over 80% of the increase. Also of significance is the average grade at the 0.5g/t cut off has increased 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 Pty Ltd ('H&S') and is an estimate of recoverable tonnes and grade using Multiple Indicated Kriging with block support correction. Measured resources exist in areas where drilling is available at a nominal 25 x 25 metre spacing, Indicated resources occur in areas drilled at approximately 25 x 50 metre spacing and Inferred resources exist in areas of broad spaced drilling. The resource model extends from 9700mN to 12200mN and to a maximum depth of 350RL (a maximum depth of 950 metres below the crest of Sukari Hill). The estimate has been adjusted to present land surfaces and previous underground mining. It was based on 110,239 two metre down hole composites and surface rock chip samples, from data received up to 12 September 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 of the Hapi Zone and several deeper mineralisation zones. Gold mineralisation is still open at depth. Resources are also being added in the Ra and Pharaoh Zones. Recent drilling has intersected strong surface mineralisation in the far north of the hill. Amun Deeps (9900 - 10700N) Drilling at Amun Deeps continued to intersect strong mineralisation, adding resource ounces down dip of current geological data, infilling resource block and geological data gaps at and beneath the pit margins and increasing understanding of the mineralisation trends, particularly the high grade Hapi Zone. Thick zones of strongly mineralised porphyry have been intersected in all drilling. Drilling will continue in this area for the next few months. Studies have commenced of the underground mining potential for the deeper parts of the mineralisation. Several holes returned strong assays over significant widths (Table 2); most have visible gold specks in the high grade Hapi Zone quartz veins, strongly disrupted geological contacts and areas of higher intensity arsenopyrite and pyrite mineralisation. Recent hole RCD1177 on 10200N, drilled down dip of hole RCD1163 (23m @ 2.60g/t Au from 334m), intersected the Hapi Zone at the hangingwall margin of the porphyry, in a zone of strongly disrupted and altered porphyry and serpentinite with abundant quartz veining and sulphides, returned extremely high grade intersection of 65m @ 18.31g/t Au, including the first 5m @ 209.43g/t. RCD1173 was drilled to test at depth the southern extension of the porphyry at 10000N, following up mineralisation in holes RCD384 and RCD499. Strong mineralisation was intercepted within the porphyry below the Hapi Zone including 26m @ 3.59g/t from 384m and 33m @ 2.37g/t from 431m. RCD1173 was not included in the September resource upgrade, so will add ounces next quarter. Further holes RCD1262 and RCD1263 in the same area await diamond drilling tails to test the mineralised porphyry and infill the resource blocks. Hole RCD1187 was drilled on 10450N to infill the resource model at the pit shell margin, up dip of high grade hole D1073, and confirmed the position of the Hapi Zone, intersecting 51m @ 4.45g/t Au from 299m, including a high grade core zone of 9m @ 15.51g/t from 322m, in a zone of disrupted quartz veining, strong sericite, silica, pyrite and arsenopyrite alteration. Data from this hole was also not included in the latest resource upgrade. Mineralisation intercepted in hole RCD1178 on 10300N added significant ounces to the September resource model, with 105m @ 4.10g/t from 380m and 17m @ 12.45g/t from 500m being returned. The hole targeted the down dip extension of the mineralisation 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 the thick, strongly mineralised down dip extension of the Hapi Zone in the main porphyry is very consistent over 500m of strike currently drilled, and will continue to add significant ounces to the gold resource. In addition, further step out holes down dip of those described above have been pre-collared for DD tailing to determine down dip width of the porphyry and continuity of the strong mineralisation already intersected. Pharaoh Zone - >11200N Drilling continued in the Pharaoh Zone during the quarter, testing the deeper extensions of the Hapi and deeper zones, the footwall contact area at depth and the shallow, west dipping, surface outcropping Cleopatra and Antony mineralisation zones in the north of the hill. Holes successfully intersected continuous 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 the best 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. Hole RCD756 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 similar intersections in the area highlights the underground potential at Sukari throughout the deposit. Holes D1203 on 11950N and D1205 on 12000N intersected strong near surface mineralisation, attributed to the outcropping, west dipping, strongly sericite-silica-pyrite-arsenopyrite altered and quartz veined Cleopatra and Antony Zones. D1203 intersected 148m @ 1.33g/t Au from surface, with several higher grade zones included; and D1205 returned 14m @ 1.32g/t Au from 9m and 112m @ 1.30g/t Au from 48m. Drilling on the NE and NW sides of the northern part of the hill continues to define these zones. Regional Exploration Drilling is continuing on several near mine prospects, following up anomalous rock chip sample geochemistry, mapped alteration and geological structures. One hole, 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 the exploitation licence such as Umm Kola, and Sukari North. First pass rock chip sampling and geochemistry at the greenfields Sami South prospect, 5km south along strike of Sukari Hill, returned two 15 - 20m wide gold anomalous zones, 200m apart, in sheared, ferruginous hydrothermally altered sediments and igneous rocks, with narrow quartz veins and weathered pyrite evident. 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. 3,547 metres were drilled by the contractor, Capital Drilling. All assay results were returned by the end of September. Gold mineralisation estimated from grade control modelling corresponds to expected mineralisation in the resource model; assay results highlight shallow easterly and westerly dipping structures. Project Finance During the quarter, the due diligence process with Barclays Capital, the investment banking division of Barclays Bank PLC, continued with the drafting of various project facility and supporting agreements. Completion of the project financing schedule has been moved out to the first quarter of next year to accommodate the work schedule of all parties involved in the process. Construction Camp Completion of the 700 man accomodation facility is nearing finalisation with several of the first accomodation parcels being ready for occupation during the middle part of quarter four. The accomodation facilities are a combination of the traditional dome style bricked facility and conventional demountable style. Concrete has been poured for the kitchen facility, fit out equipment ordered and the Company is scheduled to take possession of the new facility towards the end of the year. Site Works Upgrading of the 10km access road to the Sukari site, container lay down facilities 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 and construction supervision of the Tailings Storage Facility. Design work is ongoing with Knight Piesold staff on site during the quarter performing geotechnical investigations. Final design and appropriate bid documentation will be completed during the quarter. Project Engineering and Design A contract for the engineering and design work for the process plant was awarded in mid-March to MetPlant Engineering Services Pty Ltd, an Australian-based company. A technical team visited Bolivia (April 2007) to review the Kori Kollo processing plant dismantling progress and travelled onto Egypt in early May to the Sukari plant site location. Data and information gathered from these visits will be used to finalise design and engineering work. Completion of this work is scheduled for the fourth quarter of 2007. Seawater Supply System Tender documents were distributed during the quarter for the Seawater Supply System which will, draw in and transport raw seawater, via a staged pumped pipeline, to the Sukari site where it will be processed through a desalination plant for end use as process plant water, mine site dust suppression water and after secondary processing and treatment for construction camp drinking water. Finalisation of the tender responses will occur during the fourth quarter of 2007. Kori Kollo Process Plant / Isparta Power Station On 24 October 2007, the Company announced that both the Kori Kollo processing plant and the Isparta power plant had arrived safely at the Egyptian seaport of Alexandria and their cargoes had been discharged. The dismantling of the Kori Kollo processing facility in Bolivia and the Isparta 28MW power plant in Turkey was completed in September and both sites were closed and signed off. All staff from Bolivia and Turkey have now relocated to Egypt to continue with the reassembly of the plants at Sukari. The Isparta power plant consisted of 24 pieces of break bulk and 56 containers containing more than 900 individual packages. The Kori Kollo processing plant comprised 270 pieces of break bulk and 55 containers. Trucking of freight has now commenced to the Sukari site and is expected to take several weeks. This latest development represents an exciting phase for the Company as it takes another step towards the commissioning of the first modern gold mine in Egypt which is scheduled for the fourth quarter of 2008. Mining Caterpillar, through their Egyptian authorised dealer Mantrac, has been selected as the supplier of haulage trucks, articulated dump trucks, excavators, graders and 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 drilling equipment. 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 RH 120E Excavator commenced after successful arrival of the equipment in the Port of Alexandria and subsequent transportation to the Sukari site. In October, the Company took active possession of the RH 120E Excavator after a successful completion test and handover to Company personnel. During the fourth quarter the Company will take possession of the balance of the mining fleet and is scheduled to commence mining activity in December 2007. Owners Team The Company's organisational structure continues to grow with several key appointments being made in the quarter. In a booming resource market, the Company is very pleased with the quality of the personnel that have been attracted to the project and the positions below have now been filled. The Company 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 actively exploring in Egypt since 1995. The principal asset of Centamin is its interest in the Sukari Gold Project, located in the Eastern Desert of Egypt. The Sukari Gold Project is at an advanced stage of development, with construction having commenced in quarter two of 2007 and first gold production expected during the fourth quarter of 2008. A definitive feasibility study (the 'DFS') for the development to commercial production 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 be developed in Egypt. Centamin's operating experience in Egypt gives it a significant first-mover advantage in acquiring and developing other gold projects in the prospective Arabian-Nubian Shield. The Sukari Gold Project is hosted by a large, sheeted vein-type and brittle-ductile shear zone hosted gold deposit developed in a granitoid intrusive complex. Gold mineralization is hosted exclusively by a granitoid body of granodiorite - tonalite composition referred to as the Sukari Porphyry. The Company has entered into a Concession Agreement with the Egyptian Government that provides for exploration and exploitation rights at the Sukari Gold Project and whereby the Operating Company, owned 50% by the Company's wholly owned subsidiary, Pharaoh Gold Mines NL ('PGM') and 50% by Egyptian Mineral Resource Authority ('EMRA'), has been established. Centamin is entitled to recover all of its exploration, operating and capital costs from operating surpluses of the operating company. The Sukari Mining License covers an area of 160 km2 and is for a period of 30 years, with an option for a further 30 years. The Sukari Gold Project has been scheduled for open pit mining over an initial 15-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 to be 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. The operation is planned to utilize selective mining techniques to separate ore and waste. Provision has been made for drilling and blasting all primary and oxide materials. Ore will be hauled to the run of mine pad next to the processing plant and either direct tipped to the crusher or stockpiled for future reclaim at 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 be processed annually. Operating at an increased mining rate allows the cutoff grade for feed to the plant (referred to as 'cutover' grade) to be increased in the early years of the schedule. This in turn increases the metal output and project revenue in these early years, thus increasing the discounted operating surplus cashflow. According to current schedules, the low-grade stockpile produced as a result of applying a cutover grade, will be processed after mining has ceased, extending the current operating life of the project for a further six years. As a result, the average milled grade during the mining period is forecast 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 be based on 380 t class excavators and 150 t class rigid body trucks. At full production, three production fleets, each comprising a single excavator and sharing a maximum of 21 trucks, will be required. The capital cost of the initial 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 schedule contain too much gold to discard. Hence, the bulk flotation tail is further treated 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 pumped approximately 25 km to the mine site to satisfy all process plant and mining requirements. Most of the seawater will be pumped into a raw water pond located near the processing plant, whilst around 500m(3)/day will be pumped to a water treatment plant for potable and fresh water supplies. Power will be generated on site by a 28 MW power station, operated on heavy fuel oil. A temporary construction camp facility will be required to cater for approximately 500 construction employees and 20 senior staff. This will be constructed at the Sukari Gold Project. An overall schedule has been developed covering all phases of the project; key dates 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 Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by geologist Mr R Osman who is a full time employee of the Company, and is a member of the Australasian Institute of Mining and Metallurgy with more than five years experience in the fields of activity being reported on, and is a 'Competent Person' for this purpose and is a 'Qualified Person' as defined in 'National Instrument 43-101 of the Canadian Securities Administrators'. His written consent has been received by the Company for this information to be included in this report in the form and context which it appears. The assay samples were analysed by Ultra Trace Pty Ltd, Canning Vale, Western Australia. The information in this report that relates to mineral resources is based on work completed by Mr Nicolas Johnson, who is a Member of the Australian Institute of Geoscientists. Mr Johnson is a full time employee of Hellman and Schofield Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a 'Competent Person' as defined in the 2004 edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and is a 'Qualified Person' as defined in 'National Instrument 43-101 of the Canadian Securities Administrators'. Mr Johnson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 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 This information is provided by RNS The company news service from the London Stock Exchange
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