Recommended Offer for Sheba

RNS Number : 1199K

Centamin Egypt Limited

11 July 2011

Centamin Egypt Limited ("Centamin" or "the Company")

(LSE:CEY, TSX:CEE)

Centamin Makes Recommended Offer for Sheba

Centamin Egypt Limited ("Centamin" or the "Company"), the gold mining group in Egypt, is pleased to announce that it has reached agreement with Sheba Exploration (UK) Plc ("Sheba") on the terms of a recommended offer ("Offer") to be made by Centamin for the entire issued and to be issued share capital of Sheba ("Sheba Shares").

Information on Sheba

Sheba, which is a UK registered company, is listed on the PLUS-quoted Market (PLUS:SHE) and operates through its sole subsidiary, Sheba Exploration Limited, in Ethiopia. Sheba owns and operates three gold and base metal exploration licences in the regional state of Tigray, in Northern Ethiopia.

Background to the Offer

It is Centamin's stated strategy to grow its portfolio of assets beyond its Sukari gold project in Egypt. Sheba's licences lie within the Arabian Nubian Shield which hosts not only Centamin's 14.5 million ounce resource at Sukari, but other significant gold and copper deposits. The proposed acquisition of Sheba by Centamin represents the Company's initial strategic move in diversifying into regions that provide good opportunity for value growth through exploration and development success.

The Offer

The Offer, which is subject to the further terms and conditions set out in the Offer Document and Form of Acceptance, is being made on the basis of:

· a cash payment of 3.0 pence per Sheba Share; and

· the number of ordinary shares in the capital of Centamin equal to the number of Sheba Shares held by the Sheba shareholder divided by 40.

Based on the closing price of Centamin's ordinary shares on the London Stock Exchange on 8 July 2011, the Offer values Sheba at approximately £7.48 million on a fully diluted basis, or 6.15 pence per Sheba Share, which represents a premium of approximately 124 per cent. to the closing price of the Sheba Shares on 8 July 2011, being 2.75 pence.

The Offer is being recommended to Sheba shareholders unanimously by the Sheba directors, who have each irrevocably undertaken to accept or procure the acceptance of the Offer in respect of their entire beneficial holdings of Sheba Shares, including any further Sheba Shares allotted to them before the expiry of the Offer pursuant to options to subscribe for Sheba Shares held by them. Such beneficial holdings represent (assuming the exercise of all the options currently held by Directors before the expiry of the Offer) approximately 36.13 per cent. of Sheba's fully diluted share capital.

Centamin has also received irrevocable undertakings to accept the Offer from certain existing Sheba shareholders (including in respect of any additional Sheba Shares to be allotted pursuant to the exercise of warrants held by one such shareholder prior to the expiry of the Offer) whose holdings represent, assuming the exercise of such warrants prior to the expiry of the Offer, approximately 20.56 per cent. of Sheba's fully diluted share capital.

Accordingly, Centamin has received irrevocable undertakings in respect of, in aggregate, 68,909,124 Sheba Shares (assuming the exercise of all outstanding options and warrants before the expiry of the Offer) representing approximately 56.69 per cent. of the fully diluted share capital of Sheba.

The Offer is open for acceptance until 1.00 p.m. (London time) on 1 August 2011, unless extended by Centamin in its sole discretion, save that the period for acceptance of the Offer shall not be extended beyond 1.00 p.m. (London time) on 9 September 2011. The Offer is not subject to the City Code on Takeovers and Mergers.

An Offer Document and Form of Acceptance in respect of the Offer is today being despatched to Sheba shareholders. A copy of the Offer Document is available to Sheba shareholders free of charge on Centamin's website at http://www.centamin.com/reports-publications/other-publications/sheba/.

Commenting on the Offer, Josef El-Raghy, Chairman of Centamin, said:

"The strategic acquisition of Sheba marks the broadening of our asset portfolio beyond Sukari, as well as heralding our entry into Ethiopia, a highly prospective gold district where we believe the Sheba licences represent some of the most prospective in the country. Our understanding and experience in exploration and development in the Arabian Nubian Shield, together with Sheba's operating history in Ethiopia since 1998, provides a compelling combination of growth and diversity for all shareholders. With this combination and our strong financial position we believe we can rapidly accelerate the development of Sheba's projects. We look forward to working with the Sheba team and the Government of Ethiopia in creating a sustainable and significant mining district in Ethiopia."

For Centamin Egypt Limited

Josef El-Raghy

Chairman

11 July 2011

For more information please contact:

Centamin Egypt Limited

+ 61 (8) 9316 2640

Josef El-Raghy

www.centamin.com

Buchanan Communications Limited

+ 44 (0) 207 466 5000

Bobby Morse