Report qtr ending 31.3.03
Centamin Egypt Limited
24 April 2003
Centamin Egypt Limited ('Centamin' or the 'Company')
Report for quarter ending 31 March 2003
HIGHLIGHTS
• Sukari resource upgraded to 3.06 million oz
• Continued excellent results from infill and development drilling at Sukari
SIGNIFICANT NEW INTERSECTIONS
14m @ 6.10g/t
10m @ 5.83g/t
9m @ 5.72g/t
7m @ 5.06g/t
11m @ 4.15g/t
60m @ 2.20g/t
56m @ 2.45g/t
33m @ 2.58g/t
31m @ 2.32g/t
v Ausenco Limited appointed to complete testwork, design of process plant and
BFS co-ordination
v Australian Mining Consultants appointed for pit optimisation and mine
scheduling
v Cash balance of A$27.5m post placing and options exercise
v Stanley Mining to add three additional drilling rigs bringing total rigs on
site to eight
EXPLORATION AND DEVELOPMENT
Drilling for the quarter continued in the Amun zone (infill) and the adjacent Ra
zone (step-out). The resource figure reported in the December quarter was 2.04
million ounces and it was the company's stated objective at that time to
increase this resource with infill drilling south of 10675N and step-out
drilling north to 11000N. This successfully added ounces for the quarter and the
intention for the coming quarter is to continue with both these tasks.
It is evident from the success of this program that further drilling of the Ra
zone in particular will add many more ounces. The drilling of Amun and the
southern end of Ra will continue to upgrade Inferred resources to Indicated
resources and Indicated resources to Measured resources. The current 1km strike
extension that has been tested by drilling is part of the 2.5km mineralised
outcrop know as the Sukari hill. The Gazelle and Pharoah zones are yet to be
tested by drilling.
Demonstration of the to-date successful step-out can be seen in SDDH 297 which
was drilled at 10950 N and represents one of the northern most step-out holes to
date. Significant intersections in this hole were
3m @ 2.31g/t
60m @ 2.20g/t
14m @ 4.43 g/t
4m @ 3.72 g/t
8m @ 2.28 g/t
19m @ 2.76 g/t
Stanley Mining have purchased the two multi purpose rigs left on site by the
previous contractor and have also mobilised another specialized diamond rig for
drilling horizontal and shallow dip holes. This will bring to five the number of
contractor rigs on site, in addition to the three company owned rigs which will
greatly increase drilling rates.
Current Resources:
Total Resource including uncut Hapi Shoot upgraded to 3,06 million oz of
contained Au at 0.5g/t cut off.
Recoverable Resource by category including cut Hapi Shoot.
Measured Indicated Inferred Total
Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t Tonnes g/t M Ounces
0.5 14.79 1.29 25.68 1.33 24.06 1.59 64.53 1.42 2.944
1.0 7.17 1.91 13.23 1.91 13.03 2.32 33.43 2.07 2.223
Cut Hapi Shoot Resource
Measured Indicated Inferred Total
Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t M Tonnes g/t M Ounces
0.5 0.044 8.9 0.109. 19.6 0.153 16.5 0.082
Uncut Hapi Shoot Resource
Measured Indicated Inferred Total
Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t M Tonnes g/t M Ounces
0.5 0.044 18.6 0.109 49.3 0.154 40.4 0.200
Metres drilled and sample program for the quarter as follows:
Description January February March Total
Drilling - metres 2733 2432 792 5957
Core logged - metres 2700 2400 750 5850
Core sawn - metres 2864 2239 394 5497
Samples despatched 3314 2110 1204 6628
Drilling in March was impacted by delays experienced in processing of employee's
and contractor's security passes. This process is not anticipated to
detrimentally effect operations again in the coming months and the increased
drilling capacity to be provided by the additional rigs will rectify the
position rapidly.
Geological logging of the diamond drill core indicates that the zones of
mineralisation are well defined within the Sukari porphyry. Mineralisation is
related to stockworks, brecciation, quartz veining and contact mineralisation,
these are traceable along the strike and dip of the Sukari porphyry.
Stockworks are broad zones defined by sericitic and chloritic alteration, the
porphyry is highly fractured and jointed, and these are infilled with high
ratios of disseminated fine grained pyrite and arsenopyrite in the altered
porphyry.
Zones of brecciation are well defined within the broader stockwork. The breccia
is characterised by fragments of porphyry supported by fine grained pyrite and
sulphide matrix. Quartz veins and zones of brecciation are easily identified and
indicate an increase in the tenor of the gold mineralisation.
Stacked east dipping structures (breccia) normally contain the high grade, with
medium to low grade mineralization occurring in the quartz and sulphide
stockwork in between these structures.
Contact mineralisation with the footwall is in close proximity to the porphyry
and found in association with highly foliated metavolcanics, these display a
high ratio of pyrite and quartz veinlets. Along the foot wall contact an
extremely high grade zone, the 'Hapi Zone', is present and continues to be
intersected
Significant mineralized intersections this quarter are:
Hole No. From To Interval Grade North East RL Azimuth Dip
SDDH286 308 311 3 2.18 10575 10640 1190 270 -80
338 341 3 4.00
348 360 12 3.47
387 401 14 2.66
incl 395 398 3 5.15
SDDH287 502 528 26 2.85 10900 10619 1182 270 -80
incl 511 521 10 4.89
567 569 2 5.51
SDDH288 377 386 9 5.72 10550 10619 1182 270 -80
SDDH289A 58 60 2 3.25 10801 10678 1182 270 -15
83 87 4 2.48
SDDH290 186 193 7 5.06 10675 10612 1210 270 -45
incl 188 190 2 11.40
211 215 4 2.10
SDDH292 176 189 13 2.26 10525 10575 1170 270 -80
255 261 6 2.51
284 297 13 2.64
306 318 12 2.04
SDDH293 186 191 5 2.10 10980 10800 1217 270 -45
314 318 4 4.03
358 360 2 11.24
SDDH294 222 278 56 2.45 10500 10572 1170 270 -80
incl 245 261 16 5.64
SDDH297 93 96 3 2.31 10942 10832 1212 270 -45
228 288 60 2.20
incl 274 288 14 4.43
311 315 4 3.72
362 370 8 2.28
456 475 19 2.76
SDDH298 151 198 47 2.29 10498 10575 1170 270 -65
incl 163 164 1 22.90
185 190 5 4.68
294 308 14 6.10
incl 294 295 1 29.20
306 307 1 50.80
307 308 1 19.10
SDDH300 99 104 5 3.47 10525 10490 1156 270 -70
SDDH301 236 269 33 2.58 10475 10580 1164 270 -80
incl 256 257 1 103.00
302 310 8 2.10
SDDH302 134 140 6 4.45 10850 10532 1203 - -90
305 325 20 2.25
incl 318 319 1 11.00
339 349 10 5.83
incl 339 340 1 30.00
413 415 2 12.38
SDDH303 208 214 6 3.98 10350 10600 1133 270 -80
256 259 3 3.21
269 271 2 3.74
282 291 9 1.93
SDDH304 89 93 4 2.93 10750 10600 1202 270 -45
162 170 8 4.39
incl 162 163 1 40.10
184 188 4 2.13
SDDH306 135 143 8 2.00 10375 10600 1133 270 -80
262 274 12 2.29
incl 262 264 2 6.57
282 287 5 2.05
SDDH307 265 268 3 2.17 10950 10820 1212 270 -60
304 314 10 3.74
378 381 3 7.09
435 439 4 3.15
472 481 10 2.42
incl 479 480 1 12.10
SDDH307 498 512 14 2.52
562 568 6 2.78
SDDH308 214 226 12 8.65 10248 10597 1120 270 -80
incl 216 220 4 17.25
238 249 11 2.42
272 274 2 12.78
incl 272 273 1 103.00
282 286 4 3.05
SDDH309 154 185 31 2.32 10201 10587 1119 270 -65
incl 157 160 3 5.35
incl 171 173 2 6.32
193 197 4 5.89
incl 194 195 1 5.89
257 268 11 4.15
incl 261 263 2 11.60
incl 266 267 1 11.80
286 289 3 11.49
287 288 1 23.40
SDDH311 in progress 10850 10532 1203 90 -5
SDDH312 167 173 6 3.42 10900 10581 1200 - -90
incl 169 170 1 9.22
252 302 50 2.05
incl 254 257 3 6.71
incl 273 276 3 5.77
350 356 6 2.14
359 372 13 2.00
389 395 6 2.43
Note: All high assays cut to 20g/t for averaging
When all of the contractor's rigs are in operation at Sukari it is intended to
utilise the three Company owned rigs on exploratory drilling over other known
old gold workings in the Sukari goldfield. The initial work will be carried out
progressively over deposits such as Hangaliya, Umm Ud and Atud in the Sukari
area of the exploitation lease.
None of these old workings has had any modern exploration drilling carried out
on them.
It is the intention of the company to prove up additional resource/reserves in
these projects as they are all within economic trucking distance of Sukari.
SUKARI GOLD PROJECT BANKABLE FEASIBILITY STUDY.
The following technical appointments were made during the quarter to assist with
the upgrading of the existing 2 million tonne per annum bankable feasibility
study:
Award of Construction Engineering and Process Plant Design
Ausenco Limited was awarded the construction engineering and feasibility
co-ordination aspects of the study. Ausenco will be responsible for the
completion of metallurgical testwork, process plant design criteria,
construction engineering and capital cost estimate. Knight Piesold has been
awarded the tails dam design and plant geotechnical aspects of the study.
Ausenco have recently completed the construction of the North Mara and Sepon
projects in Tanzania and Laos respectively and are currently involved in the
upgrade of the Chatree Gold project in Thailand.
Award of Mining Engineering
Australian Mining Consultants (AMC) was awarded the mining engineering component
of the study. AMC will be responsible for pit optimisation, design, scheduling,
mine operating cost build up and selectivity studies. AMC have extensive
international consulting experience, particularly in Africa and amongst other
projects are currently working on Newcrest's Telfer gold project.
Metallurgical Testwork
A review of all historical metallurgical testwork, to determine that it is
representative of the entire ore body and the adequacy of that work for the
study has been carried out with additional testwork to be focussed in 3 key
areas:
- additional comminution analysis for optimal grinding circuit sizing;
- flotation testwork at various grind sizes;
- whole of ore leach at various grind sizes.
In addition a number of variability tests will be conducted on various ore
types. Although a significant number of tests have been carried out to date,
both potential process flow sheets require optimisation to determine which
capital/operating cost profile provides the best economics. Currently this work
is scheduled to take up to 9 weeks from sample presentation.
Geotechnical
Geotechnical consultants, George Orr and Associates, have been appointed to
carry out a review of existing geological information and drill data, propose
first pass slope design parameters and to design a geotechnical drill program
that will be utilised to recommend final slope parameters.
Hydrogeological
Hydrogeological consultants, Aquaterra, have been appointed to assess in-pit
groundwater volumes and to also carry out a regional groundwater study near the
coast to determine the potential for pumping required process water from bore
fields rather than direct from the Red Sea.
Audit of Geological and Assay Database
Hellman & Schofield (H&S) conducted a further audit of the site geological and
assay database and sample preparation procedures as part of the preparation of
data for reporting Measured, Indicated and Inferred Resources, in accordance
with AusIMM JORC Guidelines.
Resource Modelling and Grade Estimation
Resource modelling and grade estimation of the deposit was completed by H&S
based on the additional drilling during the quarter . These resources will be
used in the first pass pit optimisation work, designing the ongoing drilling
program, to help determine the locations for geotechnical drilling and
metallurgical testwork sample selections as well as initial mining rate and
selectivity studies.
Structural Geological Review
Geocentric has been appointed to carry out a structural review of the current
drill hole data and the applicability of the current resource modelling
interpretation with a view to providing improved interpretation of the
structural controls of the mineralisation. This work is scheduled to commence in
early June.
Survey
Southern Cross Surveys commenced a detailed survey of the existing underground
workings late in March along with other survey related functions including
reconciliation of current topography and drill hole collar locations, down hole
survey reviews and extension of the current control network.
Security
Security group, Atkinsons Ltd, was commissioned to carry out an independent
country and site survey of security issues in preparation for construction and
operations activities and to provide recommendations of what security measures
should be put in place.
In summary, the survey concluded that:
- No overwhelming evidence existed for any immediate threats to the
project;
- Egypt remains politically stable with an experienced, diligent security
apparatus.
CORPORATE
In January the company raised £2.03 million (A$5.65 million) through a private
placement of 22,580,127 new ordinary shares with a United Kingdom institutional
investor.
In March the conversion of the 111,244,446 'March 2003' options was successfully
completed with the underwriters subscribing for a small shortfall of 10,
586,l335 shares. The option conversion and underwriting raised gross proceeds of
A$22,248,889 which will be used to provide equity capital for the development of
the Sukari project and working capital to continue the drilling programs.
On 28th of January 2003 the Egyptian Government floated the Egyptian Pound. The
company felt the dual benefit during the quarter of a strengthening A$ v US$ and
a weakening LE v US$. This will impact positively on the future cash flow of the
Sukari project, as a vast amount of our current and ongoing operating costs are
in Egyptian Pounds (Fuel, Wages and other consumables). It is also intended to
source as many capital expenditure items from within Egypt i.e. steel,
fabrication, concrete etc. Future revenue from bullion sales will be in US$.
At the date of floating of the Egyptian Pound the Exchange rate against the US$
was 4.6 which was the same rate used in the 2 million tonne/annum feasibility
study. Movement of LE against the US$ since float has been as follows:
Date LE/US$
Before Float 4.60
After Float on 28th January 5.30
2nd March 2003 5.60
2nd April 2003 5.75
22 April 2003 5.90
Josef El-Raghy
Managing Director
24 April 2003
For more information please contact
www.centamin.com.au
or
Josef El Raghy Louis Castro
Centamin Egypt Ltd Williams de Broe Plc
Tel: + 61 (0) 8 9316 2640/ 0418 333 444 Tel: + 44 (0) 20 7588 7511
josef@centamin.com.au louis.castro@wdebroe.com
ASX Listing Rules 5.10 1
The information in this report that relates to mineral resources is based on
information compiled by Mr Gary Brabham, a member of the Australasian Institute
of Mining and Metallurgy. Mr Brabham is employed by Hellman & Schofield Pty Ltd
a consultancy primarily concerned with estimation of mineral resources
worldwide. Mr Brabham is a Competent Person under the meaning of the J.O.R.C.
code with respect to the mineralisation being reported in this report. Mr
Brabham has more than five years' experience in the mining industry and has
given his consent to the public reporting of this information in the section
headed Resource Increase.
For this report, measured resources lie in areas where drilling is available at
nominal 25 x 25 metre spacing, indicated resources in areas drilled at
approximately 25 x 50 metre spacing and inferred resources in areas of broader
spaced drilling. The resource model extends to 750RL (approximately 400 metres
below surface), and resources are estimates of recoverable tonnes and grades
using Multiple Indicator Kriging with block support correction.
Appropriate check sampling has been undertaken to verify the gold assays used in
this estimate.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
Centamin Egypt Limited
ABN Quarter ended ('current quarter')
------------------- ------------------
86 007 700 352 31 March 2003
------------------- ------------------
Consolidated statement of cash flows
------------ ------------
Current Year to
quarter date
Cash flows related to operating activities $A'000 (9 months)
$A'000
------------ ------------
1.1 Receipts from product sales and related
debtors
1.2 Payments for (a) exploration and (1,396) (3,224)
evaluation
(b) development
(c) production
(d) administration ( 656) (1,173)
1.3 Dividends received
1.4 Interest and other items of a similar nature 162 217
received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
------------ ------------
Net Operating Cash Flows (1,890) (4,180)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects
(b) equity
investments
(c) other fixed ( 10) ( 68)
assets
1.9 Proceeds from sale of: (a) prospects
(b) equity
investments
(c) other fixed
assets
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
------------ ------------
Net investing cash flows ( 10) ( 68)
------------ ------------
1.13 Total operating and investing cash flows (1,900) (4,248)
(carried forward) ------------ ------------
1.13 Total operating and investing cash flows (1,900) (4,248)
(brought forward) ------------ ------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, 27,550 29,199
etc.
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings ( 325)
1.18 Dividends paid
1.19 Cost of Fund Raising ( 892) ( 892)
------------ ------------
Net financing cash flows 26,658 27,982
------------ ------------
Net increase (decrease) in cash held 24,758 23,734
1.20 Cash at beginning of quarter/year to date 3,146 3,954
1.21 Exchange rate adjustments to item 1.20 ( 331) ( 115)
------------ ------------
1.22 Cash at end of quarter 27,573 27,573
------ ---------------------- ------------ ------------
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
-------------
Current
quarter
$A'000
-------------
1.23 Aggregate amount of payments to the parties included in 190
item 1.2 -------------
1.24 Aggregate amount of loans to the parties included in
item 1.10
1.25 Explanation necessary for an understanding of the transactions
(a) Mr Sami El-Raghy, a director and employee of the Company received
salary and superannuation for the quarter amounting to $55,902
($161,502 for the year to date).
(b) Mr Josef El-Raghy, a director and employee of the Company received
salary and superannuation for the quarter amounting to $55,000
($150,897 for the year to date).
(c) Mr Sami El-Raghy is also a Director and Shareholder of El-Raghy
Kriewaldt Pty Ltd ('El-Raghy Kriewaldt'). El-Raghy Kriewaldt provide
office premises to the Company. All dealings with El-Raghy Kriewaldt
are in the ordinary course of business and on normal terms and
conditions. Rent paid to El-Raghy Kriewaldt during the current
quarter amounted to $16,000 ($36,000 for the year to date).
(d) Directors Fees and superannuation paid during the quarter amounted
to $26,687 ($57,084 for the year to date).
(e) Insurance
Mr Colin Cowden, a director of the Company, is also a director and
controlling shareholder of Cowden Limited, Insurance Brokers. All
dealings with Cowden Limited are in the ordinary course of business
and on normal terms and conditions. A total of $36,819 was paid
during the quarter to Cowden Limited for Directors and Officers
Liability Insurance, Ex-Pat Medical Insurance and Travel Insurance
(f) Audit Committee
The Company has formally constituted Audit Committee of the Board of
Directors.
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material
effect on consolidated assets and liabilities but did not involve cash
flows
2.2 Details of outlays made by other entities to establish or increase their
share in projects in which the reporting entity has an interest
Financing facilities available
------------- -------------
Amount available Amount used
$A'000 $A'000
------------- -------------
3.1 Loan facilities
3.2 Credit standby arrangements
Add notes as necessary for an understanding of the position.
Estimated cash outflows for next quarter
$A'000
------------------
4.1 Exploration and evaluation 1,749
------------------
4.2 Development 545
------------------
2,294
Total ------------------
Reconciliation of cash
Reconciliation of cash at the end of the quarter Current Previous
(as shown in the consolidated statement of cash quarter quarter
flows) to the related items in the accounts is as
follows.
$A'000 $A'000
------------ -------------
5.1 Cash on hand and at bank 724 323
------------ -------------
5.2 Deposits at call
------------ -------------
5.3 Bank overdraft ( 3)
------------ --------------
5.4 Other (provide details) 26,849 2,826
------------ -------------
Total: cash at end of quarter (item 1.22) 27,573 3,146
------------ -------------
Changes in interests in mining tenements
-------- --------------- -------- --------
Tenement Nature of Interest at Interest
reference interest beginning of at end of
(note (2)) quarter quarter
-------- --------------- -------- --------
6.1 Interests in mining
tenements relinquished,
reduced or lapsed
-------- --------------- -------- --------
6.2 Interests in mining
tenements acquired or
increased
-------- --------------- -------- --------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights
together with prices and dates.
Total Number Issue price per Amount paid up
number quoted security (see per security
---------- ---------- note 3) (cents) (see note 3)
---------- (cents)
------------
7.1 Preference
+securities
(description)
7.2 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases
through ---------- ---------- ---------- ---------
returns of
capital,
buy-backs,
redemptions
7.3 +Ordinary
securities
501,910,369 501,910,369
---------- ---------- ---------- ---------
7.4 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases 133,824,573 133,824,573 20 cents 20 cents
through ---------- ---------- ---------- ---------
returns of
capital,
buy-backs
7.5 +Convertible
debt ---------- ---------- ---------- ----------
securities
(description)
7.6 Changes
during
quarter
(a) Increases
through
issues
(b) Decreases
through ---------- ---------- ---------- ----------
securities
matured,
converted
7.7 Options Exercise price Expiry date
(description
and
conversion
factor)
49,999,744 NIL 20 cents 09/11/2003
---------- ---------- ---------- ------------
7.8 Issued during
quarter
7.9 Exercised
during
quarter
111,244,446 111,244,446 20 cents 20 cents
---------- ---------- ---------- ------------
7.10 Expired
during
quarter
7.11 Debentures
(totals only)
7.12 Unsecured
notes (totals
only)
Compliance statement
1 This statement has been prepared under accounting policies which comply
with accounting standards as defined in the Corporations Act or other
standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: .............................. Date: ............................
(Director/Company secretary)
Print name:
.........................................................
Notes
1 The quarterly report provides a basis for informing the market how the
entity's activities have been financed for the past quarter and the effect
on its cash position. An entity wanting to disclose additional information
is encouraged to do so, in a note or notes attached to this report.
2 The 'Nature of interest' (items 6.1 and 6.2) includes options in respect of
interests in mining tenements acquired, exercised or lapsed during the
reporting period. If the entity is involved in a joint venture agreement
and there are conditions precedent which will change its percentage
interest in a mining tenement, it should disclose the change of percentage
interest and conditions precedent in the list required for items 6.1 and
6.2.
3 Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive
Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International
Accounting Standards for foreign entities. If the standards used do not
address a topic, the Australian standard on that topic (if any) must be
complied with.
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