Quarterly Report

RNS Number : 5037M

Centamin Egypt Limited

30 January 2009

 



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

(TSX:CEE, ASX:CNT, AIM:CEY)

QUARTERLY REPORT FOR THE QUARTER ENDED 31 DECEMBER 2008 

Highlights

Construction and Development

• Commissioning and gold production remains on track for Q2 2009

• Site works advancing well across all fronts with sound progress in crusher and mill areas 

• Power station engine infrastructure delivered and in place with structural steel erection underway

• 25km seawater pipeline earthworks and piping completed

• Construction of non-process buildings proceeding

Operations

• Award of blasting permits ahead of scheduled mining operations in early 2009

• Underground tender process underway with site visits from shortlisted underground mining contractors

• 13,120m of diamond drill ('DD') and 538m of reverse circulation ('RC')

• 375,000m of drilling has been completed to date

• Drilling continues targeting the Hapi Zone, Amun Deeps, the deeper 'Horus Zone' and the northern Pharaoh Zone

• Grade Control RC drilling - 19,112m completed to date

• Regional Exploration continues 

• Deepest hole drilled at Sukari to date (1,176m) stopped due to rig capacity in porphyry mineralisation 

• Significant intersections received for the quarter include:

Amun Deeps (9900N - 10700N) D1388 - 20m @ 7.39g/t Au D1391 - 189m @ 2.51g/t Au D1392 - 14m @ 6.28g/t Au

Pharaoh Zone (11200N - 12100N) RCD571 - 27m @ 1.31g/t Au & 48.3m @ 1.42g/t Au D1393 - 6m @ 4.03g/t Au D1397 - 4m @ 7.84g/t Au D1400 - 47m @ 1.27g/t Au

Corporate

• During January 2009, the Company entered into a C$60m bought deal arrangement with a syndicate of underwriters led by Thomas Weisel Partners Canada Inc 

http://www.rns-pdf.londonstockexchange.com/rns/5037M_7-2009-1-29.pdf

SUKARI GOLD PROJECT CONSTRUCTION 

The project remains on track for the second quarter of 2009 commissioning and production.

Current activity continues to focus on the civil works, power generation, CIL tank erection, tailing storage facility and the seawater pipeline. There has been a significant increase in personnel throughout the quarter in order to advance civil works and associated structural steel templates. Construction activities continue to progress across a number of fronts including: primary crusher, Conveyor 01 ('CV01'), reclaim tunnel, mills, CIL tanks, gold room, reverse osmosis ('RO') plant, non process buildings, fuel farm, power station and sea water pipeline. 

Progress pictures can be viewed on the Company's website - www.centamin.com. 

Project Engineering and Design

MetPlant Engineering Services Pty Ltd, an Australian based company, continued with engineering and design work for the Process Plant. SENET in South Africa have made significant progress on the design scopes of pipe work and associated installations.

Crusher & Conveyor Systems

Crusher concrete works have advanced significantly with the completion of crusher civil works in early January 2009. Structural steel installation has commenced and will be the focus of the crusher area during the first quarter of 2009. Structural work on conveyor system 'CV01' was completed during the quarter.

Reclaim and Grinding Systems

All civil works relating to the reclaim tunnel were completed during the quarter and backfilling of the top bunker is complete. Steelwork for the first apron feeder was erected during the quarter following satisfactory completion of reclaim tunnel steel assembly.

Installations are underway with all mill plinths and jacking points being in place. SAG Mill and Ball Mill #1 shells and heads have been erected with focus on mill fasteners scheduled for early in the first quarter of 2009.

CIL Circuit & Gold Recovery

Civil works have progressed well during the quarter with all retaining walls complete and work nearing completion of cyclone feed pump bases. Structural CIL tank erection works is 98% complete with top of tank steel to be erected early in the next quarter. Gearboxes are ready to be installed upon completion of top of tank steelwork.

Gold room foundations were completed during the quarter with steelworks and precast tilt up panels scheduled for next quarter.

Power Plant

Erection of structural steel is well advanced following the completion of Power Plant civil works and installation of the Cummins and MAK engines during the quarter. All four engines are now in position in the main power station with a further six engines in place within the second Cummins power station facility. Delivery of piping and valve installations are expected early in the first quarter of 2009.

Kori Kollo Process Plant Refurbishment

Refurbishment of the Kori Kollo processing facility continues to progress well. Sand blasting and painting of key structures has advanced significantly and activity is currently focussed on bearing housings for pinion lubrication systems and fitting of new bearings to intertank screens. Refurbishment of apron feeders is practically complete with feed sprockets being fitted.

Site Buildings and Infrastructure

During the quarter, the Reverse Osmosis Plant steelworks were completed with building erection and equipment pedestals in place.

Fabrication of fuel storage facilities including a required 500m3 diesel tank was awarded during the quarter. Civil works for the fuel storage and distribution facility were substantially completed during the quarter.

Site buildings including the administration and plant site offices were completed. Design works were completed on the warehousing and mobile fleet maintenance buildings and infrastructure, with building fabrication and erection scheduled for the first quarter of 2009. 

Tailings Storage Facility ('TSF')

Knight Piesold Pty Ltd has been appointed to carry out the design and construction supervision of the TSF. Bulk earthworks for the TSF have now been completed with only drainage channels to be completed. HDPE liner has been delivered to site and lining has commenced following the completion of lining with gypsum. 

Seawater Supply System

The Seawater Supply System 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.

Earthworks associated with the seawater pipeline were completed during the quarter. Pressure testing of pumping stations is progressing and remaining works include pipe tie-ins at pumping stations in conjunction with final civil works.  

http://www.rns-pdf.londonstockexchange.com/rns/5037M_1-2009-1-29.pdf

http://www.rns-pdf.londonstockexchange.com/rns/5037M_2-2009-1-29.pdf

http://www.rns-pdf.londonstockexchange.com/rns/5037M_3-2009-1-29.pdf

EXPLORATION

During the Quarter, resource definition drilling continued in the south of the Sukari porphyry from Wadi Fault, targeting the down thrust extension of the Amun Deeps porphyry block and the deeper 'Horus' Zone beneath Amun Deeps and the Hapi Zone. In the northern Pharaoh Zone, drilling targeted the upper parts of the porphyry; near surface west dipping Cleopatra Zones; the Hapi Zone and deeper mineralisation zones, moving north of 11200N. Drilling will continue with five contractor and three Pharaoh Gold Mines NL ('PGM') rigs in all of the above areas for the foreseeable future.

Several diamond core geotechnical holes were also completed for the underground mine decline planning, and RC water bore pilot holes were completed at the planned process plant water intake borefield on the coast.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_4-2009-1-29.pdf

Amun Zone (9900 - 10700N)

Drilling continued to infill the Amun Deeps porphyry block and test the continuity of the west dipping Downthrust zone extending from the base of it. Following up strong mineralisation in D1384 on 10125N (reported last quarter), hole D1388 at 10050N intersected a high grade zone at the western extension of the footwall contact of the Amun Deeps porphyry, in the downthrust zone, of 20m @ 7.39g/t Au from 439m (Figure 2 & Table 2).  Mineralisation is still open along strike and at depth in this area.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_5-2009-1-29.pdf

Hole RCD1391 on 10475N was drilled to test and infill resource blocks in the Hapi Zone and Amun Deeps block and continue through to the Horus Zone. Results have been received for the Amun Deeps block, essentially all mineralised, returning 189m @ 2.51g/t Au from 356m with a high grade zone at the hanging wall contact (Figure 3 & Table 2). The Horus Zone porphyry was successfully intersected from 860m downhole, intercalated with dacite dykes and strongly altered zones of serpentinitic rocks, assay results are awaited.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_6-2009-1-29.pdf

Horus Zone 

Several holes greater than 900m depth have now been drilled into the Horus Zone porphyry block beneath the Main and Amun Deeps porphry blocks. Over 200m of north - south strike, it appears to be a block some 400m down dip thickness (open at depth) and steeply east dipping (apparent dip 75o). The across strike thickness is around 150m, also open to the east. Assays to date have shown it is weakly though consistently mineralised, typically around 0.4g/t Au average grade, with sporadic, narrow +1g/t assays in higher sulphide and brecciated/sheared zones. The Horus porphyry is similar to the Amun Deeps and Main porphyry, but is more strongly silicified, giving it a massive, glassy appearance. Higher grades seem to occur at the upper contact shear zone, along the Downthrust Zone.

Hole RCD1187 on 11450N appears to have intersected these higher Au grades at the sheared top part of the Horus Zone, possibly the intersection of it and the Downthrust Zone (Figure 4 & Table 2).  The hole could not continue due to ground conditions, so RCD1391 was continued beneath it to test the full width of the Horus Zone. Drilling was terminated in serpentinites and sediments, indicating the possible footwall contact.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_13-2009-1-29.pdf

Drilling has intersected the Horus Zone from 10350N to 10525N and so far indicates the zone is a thick and continuous unit. Mineralisation is open in all directions, and further wide spaced holes are planned to the north and south along strike to test continuity and for areas of higher grade.  There is still strong potential to continue defining the Sukari mineralisation system at depth and along strike, and to locate higher grade structures within the massive silicified porphyry block. Drilling is also planned to infill and track possible porphyry mineralisation between high grade zones such as the 111m @ 15.1g/t Au in RCD553 on 11100N, south to hole D1280 (35m @ 164g/t Au) on 10575N.

Pharaoh Zone (11200N - 12100N)

Drilling continued during the quarter in the Pharaoh Zone, targeting infill and along strike extension of the up-dip, high grade Hapi Zone mineralisation, and deeper high grade zones at the base and contact of the main porphyry to the sedimentary country rock package.

Hole RCD571 on 11450N intersected moderate to strong, thick zone of mineralisation at the footwall contact (Table 2), deeper and down dip of the Hapi Zone, and 50m to the north of a previous high grade zone intersected in RCD756 (58m @ 3.76g/t Au from 791m). A 50m thick porphyry unit below the initial footwall contact returned 48.3m @ 1.42g/t from 763.7m. This zone is similar to others in the area, showing the continuity of mineralisation at depth in the Pharaoh Zone, and highlights conjugate west and east dipping mineralised structures continuing to be significant throughout the Sukari porphyry.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_8-2009-1-29.pdf

Drilling also confirmed the continuity and extent of a thick, west dipping central zone of mineralisation, higher up in the porphyry outcrop, generally from 200 - 300m below surface, centred around 10650E. Hole D1408 on 11575N intersected several anomalous Au zones in a thick mineralised envelope from 268m (Table 2), similar to D1393 on 11475N (Table 2) and several other previously drilled holes to the north and south.

Several holes have returned significant surface mineralisation, confirming the previous drilling and interpretation of the strongly mineralised west dipping Cleopatra structures. Holes D1402, 1405 and 1408 (Table 2) highlight this zone, which is also related to recent hole D1400 (Table 2), 500m along strike to the north.

Drilling will continue during the coming quarters, targeting these mineralisation zones heading north along the drill tracks available in the Pharaoh Zone.

REGIONAL EXPLORATION

Regional exploration work continued during the quarter, with mapping and sampling completed in the north east corner of the licence area, and continuing in a SW direction on wide spaced east-west traverse lines across the regional shear in which Sukari sits, highlighting stronger alteration and structurally complex zones with shear zones and quartz veining (Figure 6).  1,897 samples were collected for the quarter, with over 3,800 completed in the programme in total. Work has now been completed down to Kurdeman.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_9-2009-1-29.pdf

Mapping shows a generally north east striking rock package dominated by intermediate dioritic to andesitic rocks, grading to felsic volcanics (rhyolites, dacites) in the north east quadrant of the licence, with subordinate granitic to granodiorite intrusive rocks north and east of Sukari Hill. Intercalated sedimentary units, from fine grained siltstone and shales, to sandstones and some greywacke units are intercalated with the igneous rocks, mainly north and east of Sukari, to the licence margin. Minor but consistent lenses of serpentinitic ultramafics occur to the north and east of Sukari Hill, and in the south near Kurdeman. Interpretation and compilation of the mapping is ongoing.

1,420 assays were returned during the period, with several strongly anomalous results returned (Table 2). In addition to the regional wide spaced work, exploration has focussed on the newly discovered prospect areas to the east and south of Sukari at Quartz Ridge and the V Shears. These areas were covered with more detailed mapping and chip-line sampling to test for width and tenor of alteration and Au mineralisation. Several additional high grade assays were returned from both areas, confirming the mineralised continuity along the 400m east-west striking milky quartz vein and sheared gabbro - diorite trend at Quartz Ridge (Figure 7). Additional high grades were returned from some quartz veins and alteration 300m to the south. Interpretation of these zones is ongoing, a drill test programme is being planned, as there is significant strike length to the high grade assays, contained in a massive 1-2m thick quartz vein and enveloping 1-2m of strongly altered and sheared dioriotic rocks.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_10-2009-1-29.pdf

Sampling of the 'V Shear' prospect was also completed. Results confirm strong Au anomalism in two shear zones (Figure 8).  Compilation, interpretation and field checking of the mapping, alteration and mineralisation throughout the licence is continuing.

http://www.rns-pdf.londonstockexchange.com/rns/5037M_11-2009-1-29.pdf

  Table 1 - Anomalous Geochemistry - Regional Rock Chip Samples (>0.5ppm Au) Sep - Dec 2008

SAMPLE	Rocktype	Au_Ar1_ppm	UTM_N	UTM_E	Comments
325929	GBD	0.761	2762639	676635	V Shear - N-S Shear; Southern Extension
325932	GBD	1.48	2762637	676640	V Shear - N-S Shear; Southern Extension
325946	GBD	7.51	2762641.25	676645.38	V Shear - N-S Shear; Southern Extension
325947	GBD	1.86	2762644	676643.44	V Shear - N-S Shear; Southern Extension
325984	GBD	0.759	2762669	676662	V Shear - N-S Shear; Infill Lines
328220	LST	3.87	2762723	676657	V Shear - N-S Shear; Northern Extension
328222	LST	1.29	2762721	676659	V Shear - N-S Shear; Northern Extension
328223	LST	8.17	2762718	676664	V Shear - N-S Shear; Northern Extension
328224	LST	3.49	2762720	676664	V Shear - N-S Shear; Northern Extension
328270	VQ	1.23	2762585.75	676567.88	V Shear - N-S Shear; SW Infill Lines
328273	Ux	2.82	2762591.5	676555.13	V Shear - N-S Shear; SW Infill Lines
328274	Ux	1.78	2762585.5	676550.94	V Shear - N-S Shear; SW Infill Lines
328307	GBD	1.93	2760274	677178	Qtz Ridge Prospect - Infill Sampling
328308	GBD	4.89	2760270	677160	Qtz Ridge Prospect - Infill Sampling
328331	GBD	0.772	2760219.25	677346.25	Qtz Ridge Prospect - Infill Sampling
328332	VQ	1.78	2760220.75	677345.81	Qtz Ridge Prospect - Infill Sampling
328352	GBD	4.76	2760279.5	677490.69	Qtz Ridge Prospect - Main Vein
328353	GBD	4.47	2760280.25	677488.75	Qtz Ridge Prospect - Main Vein
328354	GBD	1.26	2760279.75	677487.25	Qtz Ridge Prospect - Main Vein
328358	GBD	0.968	2760280.5	677478.38	Qtz Ridge Prospect - Main Vein
328359	GBD	0.764	2760281	677476.06	Qtz Ridge Prospect - Main Vein
328360	GBD	3.04	2760281	677474.88	Qtz Ridge Prospect - Main Vein
328361	GBD	4.02	2760281	677472.94	Qtz Ridge Prospect - Main Vein
328362	GBD	2.25	2760281.25	677471.44	Qtz Ridge Prospect - Main Vein
328363	GBD	0.809	2760281.25	677469.5	Qtz Ridge Prospect - Main Vein
329208	VQ	26.7	2760283	677479.88	Qtz Ridge Prospect - Infill Sampling
329227	VQ	0.608	2760253.5	677434.81	Qtz Ridge Prospect - Infill Sampling
329252	GBD	0.724	2760231.75	677388.06	Qtz Ridge Prospect - Infill Sampling
329279	VQ	0.949	2760217.5	677309.25	Qtz Ridge Prospect - Infill Sampling
329280	VQ	1.82	2760222	677310.38	Qtz Ridge Prospect - Infill Sampling
329281	GBD	7.5	2760223.5	677309.94	Qtz Ridge Prospect - Infill Sampling
331272	VQ	0.555	2760220.5	677296.13	Qtz Ridge Prospect - Infill Sampling
331273	VQ	0.527	2760222.25	677289.94	Qtz Ridge Prospect - Infill Sampling
331274	VQ	0.74	2760224.25	677280.69	Qtz Ridge Prospect - Infill Sampling
331362	GBD	1.04	2759897	677460	Qtz Ridge Prospect - South of Vein
331365	GBD	0.942	2759961	677508	Qtz Ridge Prospect - South of Vein
331366	GBD	1.17	2759968	677511	Qtz Ridge Prospect - South of Vein
332371	VQ	0.54	2760309	677519.25	Qtz Ridge Prospect - Infill Sampling
332373	VQ	7.02	2760324.75	677534.06	Qtz Ridge Prospect - Infill Sampling - east extension
332374	VQ	13.4	2760329	677538.25	Qtz Ridge Prospect - Infill Sampling - east extension
333252	VQ	6.08	2758995	676818	Zone of altered rocks/qtz veins - south of Qtz Ridge
337548	GBD	2.33	2762796	676962	V Shear - N-S Shear; Northern Extension
337559	GBD	0.507	2762793	676975	V Shear - N-S Shear; Northern Extension

Notes: GBD - Gabbro-Diorite; Ux - Ultramafic; VQ - Quartz Veining; LST - Silica-Carb Alt Rock

  Assay results were received for the five RC hole programme at Sukari North B quartz vein prospect, confirming the tenor of the surface sampling of the quartz veining and structural interpretation. Drilling intersected hard, massive siliceous intermediate to felsic dioritic rock unit with minor felsic and mafic dykes. A peak assay of 1m @ 9.96g/t Au from 15m was intersected in hole 4, drilled north into the south dipping quartz vein-shear, west of the main quartz lode.  The 1m high grade assay was the quartz vein, in a 12m halo of 0.1 - 0.4g/t Au alteration. Results are similar to previous work at nearby Sukari North prospect, with higher (+1g/t Au) grade quartz veins and shear zones being hosted in massive, siliceous brittle rocks with a weak and narrow alteration assemblage being defined immediately adjacent to the structure.

GRADE CONTROL

Grade control ('GC') RC drilling continued during the quarter in the Amun Zone and North Pharaoh Zone around 11500N and 12000N; testing the northwest dipping Cleopatra mineralized structure to 1142RL. 1,693m was drilled during the quarter, completing the planned programme on the available tracks and benches pre-blasting. To date, 19,112m of GC drilling has been completed; 7,292m by the PGM owned and operated Atlas Copco rig. Conditional simulation modeling of ore benches from the available drilling data was completed. Results compare well with the exploration drilling Multiple Indicator Kriging ('MIK') model in the areas drilled, and confirms the structural interpretation of significant mineralised north west and south east dipping structures.

MINING

Caterpillar, through their Egyptian authorised dealer Mantrac, was selected through a competitive tender as the supplier of haulage trucks, articulated dump trucks, excavators, graders and dozers for the project. The initial mining fleet sufficient to commence mining pre-strip work will largely comprise:-

CAT 785C Rear Dump Trucks (5)

CAT 785C Water Truck (1)

O&K RH120E Excavator (1)

CAT D10T Dozers (2)

CAT 14H Grader (1)

CAT 16M Grader (1)

CAT 365 BLME Excavator (1)

CAT 988G Wheel Dozers (2)

H180D Rock Breaker (1)

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)

The majority of the initial fleet is on site and has been utilised for plant site and Tailings Storage Facility ('TSF') civil work.  Plant site civil works were completed during the first calendar quarter of 2008. Bulk earth works for the TSF were completed during the second calendar quarter. During the current quarter, haul roads, access ramps and run of mine ('ROM') pads have been established in preparation for the commencement of mining activity next quarter. A total of 475,000 bank cubic metre ('BCM') of material was moved throughout the quarter.

Mining pre-strip activity and blasting is scheduled to commence in the first quarter of 2009 following the receipt of permits for blasting during December 2008. Contracts have been finalised with the supplier of explosives and mobilisation of explosives, accessories and the required emulsion plant was completed in the quarter.

Further deliveries of mining fleet have been shipped from suppliers and are scheduled for assembly and delivery at the Sukari site in the first quarter of 2009.  The shipment includes a further five CAT 785C Dump Trucks and the second O&K RH120E excavator which will be used to advance development activities during 2009. 

UNDERGROUND MINE PLANNING

Studies were completed during the quarter with a continued focus on an initial underground mining rate of 500,000 tonnes per annum with grade expected to be in the range of 5g/t to 10g/t, thus bringing higher grade ore feed into production earlier than otherwise would have been the schedule through surface mining.  

During the quarter, underground mining contractors were invited to attend on site meetings and a detailed tender process is currently underway with scheduled closing of 31 January 2009. Following selection of the underground mining contractor during the first quarter 2009, it is anticipated that underground development will commence with the procurement and mobilisation of key personnel and equipment. 

http://www.rns-pdf.londonstockexchange.com/rns/5037M_12-2009-1-29.pdf

CORPORATE 

During the quarter, there were unforeseen, unprecedented and large movements in the USD versus almost all other currencies. This unprecedented and rapid shift in foreign exchange markets impacted the Company through its substantial Canadian dollar holdings. As a result, the Company incurred a US$20.5M unrealised foreign exchange loss during the quarter (at one point, the unrealised foreign exchange loss was as high as US$26M). The company has always held a policy of not hedging its currency positions and to date this policy has been attributable for unrealised foreign exchange gains of US$13M over the past two financial years.

However, potential crystallisation of the unrealised foreign exchange position incurred in the current quarter may have required the Company to proceed with a plan to reduce a combination of exploration, underground development and capital expenditure associated with mining fleet, and possibly deferral of expenditure for the stage two sulphide plant, in order to be fully funded through to the completion of Sukari Process Plant construction.  

These positions were evaluated throughout December, and in January the Board resolved that if the equity market was supportive, then a small capital raising was the preferred funding option.  As such on 20 January 2009, the company entered into an agreement with a syndicate of underwriters led by Thomas Weisel Partners Canada Inc under which the underwriters agreed to buy 92,308,000 ordinary shares (the 'Ordinary Shares') from Centamin Egypt Limited on a bought-deal basis and sell them to the public at a price of C$0.65 per Ordinary Share. The Company also granted to the underwriters an over-allotment option to purchase up to an additional 13,846,200 Ordinary Shares at the same price, exercisable by the underwriters in whole or in part for a period of 30 days on or following the closing of the offering. The gross proceeds raised from the offering will be C$60,000,200 (C$69,000,230 if the over-allotment option is exercised). 

Centamin Egypt Limited intends to use the net proceeds of the offering for the continued development of the Sukari Gold Project, underground development, exploration and working capital purposes.  The Company is currently debt free, unhedged and able to aggressively pursue further exploration and development activities, including the underground development of the high grade Amun Deeps zone.

To minimise future foreign exchange losses, the Company is currently forecasting currency use to cost of completion, and plans to convert the proceeds of the offering to those currencies following the closing of the issue. 

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 the second quarter of 2007 and first gold production expected during the second quarter of 2009. 

A definitive feasibility study ('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. As at 30 June 2008, the Company is of the opinion that due to increased commodities prices and currency movements since finalisation of the DFS that the capital estimate is at risk by 20%. Average cash operating costs have also been revalidated as at 30 June 2008 due the higher cost of consumables, and are forecast to be US$365/oz. 

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 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 Licence 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 3.7Moz 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 cut off 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 at US$49.3 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;

• adsorbing the precious metals onto activated carbon;

• stripping the precious metals from the carbon;

• recovering the precious metals as gold doré; 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 doré; and

• placing these tailings in the tailings storage facility.

Process water will be drawn from a bore field located adjacent to 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 500m³/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 primary power station, operated on heavy fuel oil. A modern camp facility was constructed to cater for approximately 700 occupants. The camp currently houses approximately 550 occupants, with another 150 occupants being housed in the old exploration camp. 

On behalf of Centamin Egypt Limited

Josef El-Raghy

Managing Director/CEO

30 January 2009

For more information please contact:

Centamin Egypt Limited + 61 (8) 9316 2640 Josef El-Raghy  www.centamin.com

Pelham Public Relations + 44 (0) 207 743 6376 Candice Sgroi Mobile: + 44 (0) 7894 462 114

Ambrian Partners Limited + 44 (0) 207 7634 4700 Richard Brown Richard Greenfield

Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by geologist Mr Richard 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.

Refer to the Technical Report which was filed in March 2007 for further discussion of the extent to which the estimate of mineral resources/reserves may be materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issue. 

  Table 2 - Significant Intersections December 2008 Quarter

HOLE	NORTH	EAST	DIP	AZI	EOH (m)	FROM (m)	TO (m)	INTERVAL (m)	Gold (g/t)
RCD571	11450	10652	-88	90	867.8	687	714	27	1.31
					incl.	702	703	1	9.77
						763.7	812	48.3	1.42
RCD1187	10450	10742	-70	270	864.4	799	803	4	5.84
					incl.	800	801	1	20.00
						806	808	2	10.52
						817	820	3	1.41
						826	864.4	38.4	0.54
D1345	10350	10730	-80	270	1151	918	921	3	2.13
						932	975	43	0.87
						1004	1019	15	0.72
						1036	1057	21	0.69
D1388	10050	10550	-83	270	670.7	291	294	3	1.54
						439	459	20	7.39
					incl.	454	459	5	25.30
RCD1391	10475	10795	-75	270	1136.7	337	349	12	2.61
					incl.	346	349	3	6.49
						356	545	189	2.51
					incl.	367	372	5	34.52
					incl.	407	408	1	5.21
					incl.	435	438	3	10.31
					incl.	484	485	1	99.70
						846	848	4	7.90
D1392	10525	10587	-86	270	1076.1	314	328	14	6.28
					incl.	323	328	5	14.30
						346	352	6	2.15
					incl.	347	348	1	7.52
D1393	11475	10650	-85	270	665.5	12	18	6	4.03
						230	235	5	1.07
						248	264	16	1.22
						284	289	5	1.02
						354	365	11	1.26
					incl.	356	357	1	7.41
						490	492	2	1.58
D1397	11500	10670	-75	270	631.9	233	237	4	7.84
					incl.	236	237	1	24.90
D1400	12050	10845	-25	270	390.92	5	52	47	1.27
					incl.	19	20	1	5.33
D1402	11525	10678	-83	270	810.2	29	50	21	1.61
					incl.	44	45	1	7.28
D1405	11550	10660	-75	270	675.8	48	58	10	1.96
					incl.	55	56	1	10.80
						71	79	8	1.11
						204	209	5	1.61
						235	247	12	1.12
						295	298	3	2.83
D1408	11575	10683	-87	270	788	21	23	2	1.35
						41	51	10	1.78
						55	58	3	1.92
						99	101	2	1.27
						302	311	9	1.41
						329	340	11	0.98
						351	353	2	2.08
						381	383	2	2.69

Note: Intervals shown in the table are down hole intercepts, drilled at high angles relative to the internal mineralized structures and the Sukari Porphyry; true widths do not apply or are not used in drilling the stockwork style mineralization at Sukari

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin : Appendix 8. Amended 1/7/98, 30/9/2001.

Name of Entity

Centamin Egypt Limited

   ABN                            Quarter ended ('current quarter')

86 007 700 352

31 December 2008

Consolidated statement of cash flows

Centamin Egypt Limited

Pharaoh Gold Mines NL (100%)

Viking Resources Ltd (100%)

North African Resources (100%)

Centamin Limited (100%)

Cash flows related to operating activities	Current Quarter $US'000	Year to date (6 months) $US'000
1.1 Receipts from product sales and related debtors	-	-
1.2 Payments for (a) exploration and evaluation	(2,913)	(5,141)
(b) development	(26,147)	(55,902)
(c) production	-	-
(d) administration	(636)	(1,422)
1.3 Dividends received	-	-
1.4 Interest and other items of a similar nature received	999	2,107
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	(28,697)	(60,358)
Cash flows related to investing activities
1.8 Payment for purchases of (a) prospects	-	-
(b) equity investments	-	-
(c) other fixed 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	-	-
1.13 Total operating and investing cash flows (carried forward)	(28,697)	(60,358)

1.13 Total operating and investment cash flows (brought forward)	(28,697)	(60,358)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc.	142	811
1.15 Proceeds from sale of forfeited shares	-	-
1.16 Proceeds from borrowings	-	-
1.17 Repayment of borrowings	-	-
1.18 Dividends paid	-	-
1.19 Other (bank and realised foreign exchange charges)	(1,383)	(1,573)
Net financing cash flows	(1,241)	(762)
Net increase (decrease) in cash held	(29,938)	(61,120)
1.20 Cash at beginning of quarter/year to date	147,974	182,329
1.21 Exchange rate adjustments to item 1.20	(20,531)	(23,704)
1.22 Cash at end of quarter	97,505	97,505

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 $US'000
1.23 Aggregate amount of payments to the parties included in item 1.2	438
1.24 Aggregate amount of loans to the parties included in item 1.10	-

1.25 Explanation necessary for an understanding of the transactions

-   Salaries, superannuation contributions, consulting and Directors fees paid to Directors during  the three months ended 31 December 2008 amounted to A$371,750 (31 December 2007:  A$257,175).   -   Mr S El-Raghy and Mr J El-Raghy are Directors and shareholders of El-Raghy Kriewaldt Pty Ltd  (“ELK”), which provides office premises to the Company in Australia. All dealings with ELK are  in the ordinary course of business and on normal terms and conditions. Rent paid to ELK during  the three months ended 31 December 2008 amounted to A$16,119 (31 December 2007:  A$15,601).   -   Mr S El-Raghy provides office premises to the Company in Alexandria, Egypt. All dealings are  in the ordinary course of business and on normal terms and conditions. Rent paid during the  three months ended 31 December 2008 amounted to GBP 1,950 (31 December 2007: GBP  1950).       - Mr C Cowden, a non-executive director, is also a director and shareholder of Cowden       Limited, which provides insurance broking services to the Company. All dealings with       Cowden Limited are on normal terms and conditions. Cowden Limited was paid A$37,104       during the three months ended 31 December 2008 (31 December 2007: A$24,293). In       addition, amounts of A$222,404 (31 December 2007: A$143,204) were paid to Cowden       Limited to be passed on to underwriters for premiums during the three months ended 31       December 2008.

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

Add notes as necessary fro an understanding of the position.

	Amount available $US'000	Amount used $US'000
3.1 Loan facilities	-	-
3.2 Credit standby arrangements	-	-

Estimated cash outflows for next quarter

	$US'000
4.1 Exploration and evaluation	3,000
4.2 Development	40,000
Total	43,000

Reconciliation of Cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $US'000	Previous quarter $US'000
5.1 Cash on hand and at bank	3,606	4,125
5.2 Deposits at call	-	-
5.3 Bank overdraft	-	-
5.4 Term deposits	93,899	143,849
Total: cash at end of quarter (item 1.22)	97,505	147,974

Changes in interests in mining tenements

	Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1 Interest 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	Number quoted	Issue price per security (see note 3)	Amount paid up per security (see note 3)
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	879,519,163	879,519,163
7.4 Changes during quarter   (a) increases through issues/     options exercise   (b) decreases through returns   of capital, buy-backs	1,000,000	1,000,000	(see 7.9 below)	(see 7.9 below)
7.5  +Convertible debt securities    (description)
7.6 Changes during quarter   (a) increases through issues   (b) decreases through   securities matured,    converted
7.7  Options    (description and conversion    factor)	Employee Option Plan 2006 1,200,000 2,165,000 250,000 3,500,000 250,000 750,000 250,000 1,000,000 Other Unquoted Options 1,070,000 Broker Warrants 3,393,678 613,582 5,600,000	Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil	Exercise Price A$0.7106 A$1.0500 A$1.4034 A$1.7022 A$1.1999 A$0.7033 A$0.6750 A$1.0000 A$0.3500 C$0.8600 C$0.8600 C$1.2000	Expiry Date 31 Jan 10 24 May 10 15 Oct 10 16 Apr 11 25 Aug 11 28 Oct 11 28 Nov 11 19 Dec 11 31 Oct 10 11 Apr 09 20 Apr 09 23 Nov 09
7.8 Issued during quarter	Employee Option Plan 2006 750,000 250,000 1,000,000	Nil Nil Nil	Exercise Price A$0.7033 A$0.6750 A$1.0000	Expiry Date 28 Oct 11 28 Nov 11 19 Dec 11
7.9 Exercised during quarter	Employee Option Plan 2002 1,000,000	1,000,000	Exercise Price A$0.4355	Expiry Date 08 Dec 08
7.10 Expired/lapsed during quarter	Employee Option Plan 2002 500,000 Employee Option Plan 2006 500,000 500,000	Nil Nil Nil	Exercise Price A$0.4355 A$1.1636 A$0.7106	Expiry Date 08 Dec 08 25 Jun 10 31 Jan 10
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:                             

Print name:        Heidi Brown, Company Secretary        Date: 30 January 2009

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.

== == == == ==

 

END

 

 

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