RNS Number:7660E
Centamin Egypt Limited
28 September 2007
CENTAMIN EGYPT LIMITED
ABN 86 007 700 352
ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007
Centamin Egypt Limited ("the Company") is pleased to provide extracts of the
Company's Annual Report for the year ended 30 June 2007. The printed version of
the Annual Report is expected to be posted to shareholders who are registered as
at 22 October 2007, on 23 October 2007.
In addition the Company's Annual Information Form (AIF) has been lodged with the
Australian Securities Exchange and is in the process of being lodged with the
Canadian Securities Administrators.
Both documents can be downloaded in full from the Company's website
www.centamin.com.
COMPANY PARTICULARS
_______________________________________________________________________________
DIRECTORS
Mr Sami El-Raghy, Chairman
Mr Josef El-Raghy, Managing Director/CEO
Mr Colin Cowden, Non Executive Director
Mr G Brian Speechly, Non Executive Director
Dr Thomas Elder, Non Executive Director
Mr H Stuart Bottomley, Non Executive Director
COMPANY SECRETARY
Mrs Heidi Brown
CHIEF FINANCIAL OFFICER
Mr Mark Smith
PROJECT MANAGER
Mr Robert Sinclair
GENERAL MANAGER - EGYPT
Mr Youssef El-Raghy
HEAD OFFICE EGYPT OFFICE
57 Kishorn Road 361 El-Horreya Road
Mount Pleasant, Western Australia, 6153 Sedi Gaber
Telephone: + 61 8 9316 2640 Alexandria, Egypt
Facsimile: + 61 8 9316 2650 Telephone: + 203 5411 259
Email: centamin@centamin.com.au Facsimile: + 203 5226 350
Website: www.centamin.com Email: pgm@centamin.com.au
BANKERS
Australia United Kingdom
National Australia Bank Limited Clydesdale Bank Plc
50 St Georges Terrace 50 Lothian Road
Perth WA 6000 Edinburgh EH3 9BY
Egypt Egypt
MISR International Bank Commercial International Bank
54 Elbatal Ahmed Abdel Aziz Street Marsa Alam Branch
Cairo, Egypt Marsa Alam, Red Sea, Egypt
AUDITORS UK NOMINATED BROKER & ADVISOR
Australia Evolution Securities Limited
Deloitte Touche Tohmatsu 100 Wood Street
Level 14, Woodside Plaza London EC2V 7AN
240 St Georges Terrace United Kingdom
Perth WA 6000
LOCATION OF REGISTERS OF SECURITIES
Australia United Kingdom
Computershare Investor Services Pty Ltd Computershare Investor Services
Level 2, 45 St Georges Terrace PO Box 82 The Pavilions, Bridgwater Road
Perth WA 6000 Bristol BS99 7NH England
Telephone: + 61 8 9323 2000 Telephone: + 44 0870 702 0003
Facsimile: + 61 8 9323 2033 Facsimile: + 44 0870 703 6116
Canada
Computershare
100 University Avenue, 8th Floor
Toronto, Ontario, ON M5J 2Y1
Telephone: + 1 416 263 9311
Facsimile: + 1 416 981 9777
STOCK EXCHANGES
The Company is listed on the Australian Securities Exchange (ASX), the AIM
Market of the London Stock Exchange (AIM) and the Toronto Stock Exchange (TSX).
The Home Exchange is Perth.
CHAIRMAN'S REPORT
Dear Shareholders
It is my pleasure to present to you the annual report of the Company for the
year ended 30 June 2007.
Centamin has evolved significantly during 2006 and 2007, with several
significant achievements providing the conduit for the Company's continuing
progress from an explorer to a mid tier gold producer/explorer with considerable
exploration potential yet to be realised.
This transformation has been recognised by the international investment
community which has in turn resulted in substantial equity capital investment in
the Company and consequently considerable growth in shareholder value as
evidenced by the Company's market capitalisation increasing by 98% during the
year under review.
This support from the investment community has occurred because the Company has
managed to identify and acquire a substantial land holding in what we believe
will in time prove to be a gold province of world standard and also because we
have assembled a team of high quality personnel with the necessary skills to
bring the Sukari Project into production.
It is worth noting that the current Mineral Resource comprises 6.84 Moz Measured
and Indicated, plus 3.6 Moz Inferred ounces of gold and has been discovered at
an impressively low cost of - US$5.00 per ounce.
The development of the Sukari Project is occurring during a time of considerable
activity in the resources sector which in turn has placed significant pressure
on all inputs to the development of the project, however I am pleased to report
that the development of the Company and the Sukari Project look just as
impressive from within the Company as they obviously also do to the investment
community at large.
The achievements during the year include:-
* Completion of the Definitive Feasibility Study for the development of the
Sukari Project and commencement of construction
* The purchase and dismantling for shipment of the Kori Kollo Processing
Plant in Bolivia
* The purchase and dismantling for shipment of a second hand 28MW Heavy
Fuel Oil power plant in Turkey
* Completion of C$151m Equity Raising and TSX listing
* Current Mineral Resource containing 6.84 million ounces of gold Measured
and Indicated, plus 3.6 million ounces of gold Inferred, an increase of 3.7
million ounces (2.52 Moz Measured and Indicated and 1.1 Moz Inferred) during the
period
* Appointment of Barclays Capital as Mandated Lead Arranger to finance up
to US$100 million for project development
* Environmental approval received
* Owners development team assembled
During the year, the Company made two significant and assertive strategic
decisions as a consequence of the current rampant activity within the resources
sector. The first decision was to discontinue with the services of an
international engineering and project management group engaged on the
pre-feasibility study and replace them with an in-house owner's team.
Secondly, the Company is now seeing the considerable benefits of seeking out and
purchasing both the Kori Kollo processing plant and the heavy fuel oil power
plant and also to have had the foresight to commit to the purchase of long lead
time critical items such as the mining fleet.
The Company's Sukari development schedule and key dates covering all phases of
the project are listed below:
Construction Camp Q4 2007
Commence Site Works Q4 2007
Kori Kollo Plant Arrives Egypt Q4 2007
Project Finance Q4 2007
Commence Tailings Storage Facility Q1 2008
Commence Mining Pre-strip Q1 2008
Commissioning and Production Q4 2008
Although construction has commenced at Sukari, the Company has continued its
drilling programme utilising the nine rigs that are currently on site and has
also stepped up regional exploration outside of the Sukari mine corridor and
within the 160 km2 Sukari Mining Concession.
As such we are very confident that the number of minable ounces will increase
well beyond the current forecast annual production of 200,000 ounces of gold
from a 15 year mine life.
In closing, I thank my co-directors for their contributions during a very active
year, in particular our Managing Director/CEO, Josef El-Raghy, his management
team and all our loyal and dedicated staff.
On behalf of the Board of Directors.
Sami El-Raghy
Chairman
Perth, 27 September 2007
REVIEW OF operations
Sukari Gold Project
Sukari Gold Project - Background
Centamin Egypt Limited ("Centamin" or "the Company") is a mineral exploration
and development company, listed on the Toronto Stock Exchange (TSX : CEE), the
Australian Securities Exchange (ASX : CNT) and the AIM Market of the London
Stock Exchange (AIM : CEY), and has been actively exploring in Egypt since 1995,
via its wholly owned subsidiary company, Pharaoh Gold Mines NL ("PGM"). The
Company's principal asset 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 fourth quarter of 2008. The Sukari
Gold Project will be the first large-scale modern gold mine to be developed in
Egypt. Centamin's 12 year operating experience in Egypt gives it a significant
advantage in acquiring and developing other gold projects in the prospective
Arabian-Nubian Shield.
A definitive feasibility study (the "DFS") for the development to commercial
production of the Sukari Gold Project was completed in February 2007 and was
based on a geological resource containing 4.3 million measured and indicated
ounces (currently 6.84 million ounces - see Table 1).
A summary of the findings of the DFS were:
* the DFS concluded that a 4 million tonne per annum ("Mtpa") 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.
Sukari is a large, sheeted vein-type and brittle-ductile shear zone hosted gold
deposit developed in a granitoid intrusive complex. Gold mineralisation is
hosted exclusively by a granitoid body of approximately granodiorite - tonalite
composition referred to as the Sukari Porphyry.
The Company operates in Egypt under a Concession Agreement ("CA") with the
Egyptian Government that provides for exploration and exploitation rights at the
Sukari Gold Project. Under the terms of the CA, an operating company, Sukari
Gold Mines ("SGM"), owned 50% by PGM and 50% by the Egyptian Mineral Resource
Authority ("EMRA"), has been established to manage the Sukari Project. Centamin
is entitled to recover all of its predevelopment exploration expenditure and
operating and capital costs from SGM's operating surplus prior to any splitting
of operating surplus. All sustaining capital and future exploration is also
recoverable. All funding and management rests solely with PGM.
The Sukari Mining License covers an area of 160 km2 and was granted in May 2005
for an initial period of 30 years with an option for a further 30 years. The
licence area contains several other historical gold mines and recent regional
exploration programmes have identified several additional targets within close
proximity of Sukari that are now the subject of a planned drilling campaign.
The Sukari Gold Project DFS was based on scheduled 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 of gold. A further 374 Mt of waste material is also
expected to be mined resulting in a waste to ore 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 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$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 630 construction employees and 70 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 Q4 2007
Kori Kollo Plant Arrives Egypt Q4 2007
Project Finance Q4 2007 (Equity component complete)
Commence Tailings Storage Facility Q1 2008
Commence Mining Pre-strip Q1 2008
Commissioning and Production Q4 2008
Project Development Funding
During the second half of the financial year, the Company completed an investor
road show through London and North America with Westwind Partners Inc and
Evolution Securities Limited. At the completion of this road show, the Company
placed approximately 175m new shares to raise C$151m. The placing was heavily
oversubscribed. The Company subsequently completed a full TSX listing and shares
began trading on 05 April 2007. These equity funds will be applied to the Sukari
development and represent the full equity component of the capital required to
take the project into production.
On 17 April 2007, the Company announced that Barclays Capital, the investment
banking division of Barclays Bank PLC, was appointed as Mandated Lead Arranger
to finance up to US$100 million by way of a project loan facility.
Together with the proceeds from the recently completed placement, this facility
will complete the financing arrangements required for the development of the
project. The facility is subject to completion of due diligence and detailed
documentation.
The due diligence process commenced during April 2007 with the review of project
data together with visits to site by key banking personnel. The Company is in
receipt of the project financing schedule from Barclays Capital and expects to
complete the financing of the project in the fourth quarter of this year.
Construction Camp
A contract for the earthworks for a 700 man accommodation facility was awarded
during the quarter to an Egyptian company, CMS. Earthworks are complete and
installation of buried services is 60% complete. A contract for installation of
the sewage treatment plant is in progress and water storage tanks are in place.
Two contracts for the construction of the camp buildings have been awarded to
two Egyptian contractors and construction is underway with the first rooms and
kitchen/diner forecast to be available at the end of October 2007.
Site Works
Upgrading of the 10km access road to the Sukari site from the main highway has
commenced and is estimated to be 80% completed as at the end of August 2007.
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 performing geotechnical
investigations. Final design and appropriate bid documentation will be completed
during the fourth quarter of 2007.
Project Engineering and Design
A contract for the engineering and design work for the process plant was awarded
in mid-March 2007 to MetPlant Engineering Services Pty Ltd, an Australian-based
company. A technical team visited Bolivia in April 2007 to review the Kori Kollo
processing plant dismantling progress, and then travelled on to 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 first quarter of 2008.
An Egyptian engineering company, TCB Egypt, has been engaged to detail design
and engineer the construction camp, kitchen-mess, desalination plant and
sewerage treatment plant. The layout and design of the mine maintenance workshop
has been finalised and construction bids received.
Kori Kollo Process Plant
As at the end of August, dismantling activities had been completed and all plant
and equipment had been trucked to the port of Arica in Chile for onwards
shipping to Alexandria, Egypt.
The Kori Kollo processing plant was acquired late last year from a subsidiary of
Newmont Mining Corporation for US$11 M and was located in the Andes Plains 200km
south east of the Bolivian capital of La Paz.
Dismantling operations began in February 2007 utilizing Bolivian engineering and
transport groups. Large cranes for the project were mobilised from Argentina,
Santa Cruz and La Paz.
All activities were supervised by a construction team from Centamin. At the peak
of activity, 280 personnel were involved in dismantling the facility which
required more than 200,000 man hours. The same group of construction supervisors
are now in the process of relocating to Egypt to re-assemble the processing
plant.
The first shipment of dismantled equipment commenced in June 2007 and largely
consisted of equipment requiring refurbishment outside of Egypt prior to
importation to Alexandria and then site. After some 200 semi trailer loads, all
plant and equipment has now been transported across the Bolivian border to the
Chilean port of Arica.
Ship loading has taken place and arrival into Egypt is scheduled for the fourth
quarter of 2007.
Mining Equipment
Caterpillar, through their Egyptian authorised dealer Mantrac, has been selected
as the supplier of haulage 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 D10 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)
Initial deposits have been paid and the rigs have arrived into the Port of
Alexandria, with mining activity schedule to commence in the fourth quarter of
2007.
Power Station
A second-hand Caterpillar, 28MW Heavy Fuel Oil power plant which is currently
located in Turkey, has been acquired. The purchase of this critical path item
has removed a significant amount of project risk from the completion time line
schedule and will also represent a material saving on the budgeted capital
expenditure amount in the DFS.
A contract for the dismantling, packing and transportation within Turkey has
been awarded to Magdenli, a Turkish transport company, and a small Centamin team
is currently in Turkey overseeing these activities. Dismantling and packing of
the power plant is proceeding according to schedule, and it is anticipated that
the plant will arrive in Egypt in the coming month.
Maintenance support in Egypt for the power plant engines will be provided by the
local Caterpillar dealer, Mantrac who are also supplying and maintaining the
mining fleet.
Owners Team and Operations Personnel
The Company's organisational structure continues to grow with several key
appointments having been made. 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
- Operations Superintendent
- Drill & Blast Supervisor
- Mine Training Supervisor
- Production Supervisors
- Chief Mine Geologist
Resource Estimation
The Sukari Mineral Gold Resource has grown strongly during the year 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). Several resource
upgrades were issued throughout the year, showing a steady and consistent
increase of approximately 250,000oz every month for a total increase since the
last annual report of 3.7 Moz (2.52 Moz Measured and Indicated, and 1.1 Moz
Inferred).
Table 1 - Current Sukari Project Mineral Resource Estimate
+-------------------------------------------------------------------------------------------+
| Mineral Resource (September 2007) |
+---------+---------------------+-------------------+--------------------+------------------+
| | | | Total | |
| | Measured | Indicated | (Measured + | Inferred |
| | | | Indicated) | |
| 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 was calculated by independent consultants, Hellman & Schofield.
Measured resources lie in areas where drilling is available at a 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 from 9700mN to 12200mN and to a maximum depth of 350mRL
(a maximum depth of 950 metres below the crest of the Sukari hill) and is based
on all assay data available at 12 September 2007, from a total of 110,239 two
metre down hole composites and surface rock chip samples. The resources are
estimates of recoverable tonnes and grades using Multiple Indicator Kriging with
block support correction.
South of 11300N, in the DFS mining area, the resource is estimated at 6.1 Moz
Measured and Indicated, and 3.1 Moz Inferred at a 0.5g/t Au cut off grade.
Drilling Results
Resource drilling at Sukari during 2006 and 2007 has been very successful (Table
3). The Mineral Resource increased by more than 60% from the previous year. The
mineralisation zones and geology were able to be modelled consistently
throughout the porphyry unit, over its entire strike length of 2.2km. The
resource is still open at depth down dip, and results in the Amun, Ra and
Pharaoh Zones show there is strong potential for further significant resource
increase and underground mining potential.
The first three quarters of the year focused on the central and northern parts
of the hill, adding resource ounces along strike, testing the near surface
mineralisation in the Pharaoh Zone and the full extent of the Hapi Zone and
other mineralisation zones at depth in the Ra - Gazelle zone, thereby maximising
ounces inside the optimised pit shell for the DFS.
The results of the program were very successful; the optimised pit shells
generated included the deep Hapi Zone material, increasing the pit volume and
potential reserves considerably. The results of preliminary mine optimisation
studies are positive indicating significant potential growth of Sukari reserves
from 3.7 Moz and requires further detailed mine design/planning.
To test the full strike extent of the deeper mineralisation to the south, work
commenced in the fourth quarter in the Amun Zone to test the down dip potential
of the porphyry. Drilling of the down dip extension of mineralisation at Amun
Deeps intersected extremely encouraging results, highlighting the continuing
strong potential of Sukari.
Amun Zone (9900 - 10700N)
Drilling re-commenced in the Amun Zone during the fourth quarter from the wadi
level, testing down dip extensions of the Hapi and other mineralisation zones at
depth. All holes have successfully intersected strong looking mineralisation in
thick units of porphyry, particularly at the hangingwall contact zone in the
porphyry, which correlates to the Hapi Zone. Drilling started at 10550N and is
progressing south along strike.
Several holes returned strong assays over significant widths (Table 3). Hole
D1143 on 11400N intersected 212m @ 2.37g/t Au from the hangingwall contact at
311m; essentially the entire thickness of the porphyry was mineralised.
Mineralisation is associated with quartz veins, brecciated zones with strong
arsenopyrite and pyrite and strong silica-sericite alteration. Visible gold was
seen in most holes in this zone.
Drilling and assay results indicate the thick, strongly mineralised down dip
extension of the Hapi Zone in the main porphyry is very consistent over 300m of
strike currently drilled, and has added significant ounces to the gold resource.
Several other holes have been drilled to the south along strike and intersected
similar thicknesses of mineralised porphyry with visually strong looking
mineralisation zones. Holes continue every 50m to 10000N and have been reverse
cycle ("RC") pre-collared and awaited diamond drilling ("DD") tails.
In addition, further step out holes down dip to the east 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.
Further holes are planned to grow the resource in this area.
Ra - Gazelle Zone (10700 - 11200N)
The bulk of the updated resource ounces during the year were added in this area,
drilling is currently complete. Drilling targeted the major Hapi Zone
mineralisation defined in hole RCD553 (111m @ 15.6g/t Au from 473m) last year,
successfully intersecting and defining a consistent, thick zone, as well as
several higher and lower level mineralisation zones (Table 3). Results show that
mineralisation is consistent along and across strike and down dip. Drilling
focused moving northwards through the Ra and Gazelle zones into the Pharaoh Zone
during the year.
Drilling also indicated strong near surface mineralisation in several areas,
with hole RCD691 on 11000N at the base of the porphyry outcrop returning 30m @
3.83g/t Au from surface, including 4m @ 18.33g/t from 10m. The surface zone can
be traced in holes to the north and south.
The result of the Ra - Gazelle resource definition program was very successful,
with significant potential to increase the pit volume and potential mining
reserve considerably.
Pharaoh Zone
Drilling continued in Pharaoh Zone during the year, targeted at:
*Infill testing continuity of near surface mineralisation detected last
year;
*Sub vertical tailing of RC pre-collars to test deeper along strike
extensions of the Hapi Zone mineralisation; and
*Angled holes into the western footwall contact to test the continuation
of the higher up, Main Zone type mineralisation.
Numerous other flatter to shallow west and east dipping zones of mineralisation
were subsequently tested. Mapped quartz veins and shears confirm a similar
orientation to the ones intersected in drilling.
Surface mineralisation continued to be intersected in the Pharaoh zone north of
11500N proving continuity to the far north of the hill. A strong surface zone is
particularly evident from 11600 - 12000N, corresponding to the NE striking
quartz reef and subsidiary west and east dipping mineralisation zones, now
called the Cleopatra Zone, previously mapped and rock chip sampled with strong
assays.
Drilling initially infill tested the near surface mineralisation associated with
the outcropping shallow North West dipping Cleopatra Zone. Results confirmed a
significant strike extent, width and thickness of near surface mineralisation. H
oles D842, D827, D860, D845 and D910 intersected strong mineralisation (Table
3); including visible gold and arsenopyrite veining in strongly silica-green
sericite altered and brecciated quartz veined porphyry near surface, typical of
the Cleopatra Zone. West and east dipping zones have also been interpreted.
Results from DD tails drilled in the Pharaoh Zone show another, deeper west
dipping structure becoming more significant from 11500N, termed the Antony Zone.
Significant resource ounces were also added and upgraded in category in the area
11200N - 11600N during the year.
Zones beneath the Hapi zone have also been defined in drilling. Holes to the
north such as D1164, RCD728, 741, 743 and 744 (Table 3) intersected thick,
highly mineralised zones at depth, proving continuity of the strongly
mineralised zones throughout the porphyry, and highlighting the underground
potential of the deposit.
The continuity of the Main, Hapi and several other intermediary stacked
mineralisation zones can be demonstrated from the Amun zone in the south through
to the Ra and Gazelle, and into the Pharaoh Zone beyond 11200N. Interpretation
is continuing to the north, where zones above the Main Zone become more
prominent. West dipping mineralised structures such as Cleopatra and Antony are
being followed up with current drilling in the northern Pharaoh Zone.
Drilling will continue with 9 rigs on site, to define the northern extension of
these zones, the down dip extent of the porphyry and mineralisation in the Amun
Deeps area, and other stacked mineralised zones north throughout the Pharaoh
Zone. Also planned is testing of the steep sided NW zone of the hill where
access so far has been too difficult. The introduction of heavy mining machinery
and explosives should create the access needed to fully drill test this area.
Mine Infrastructure Sterilisation Drilling
RC sterilisation drilling was completed during the last quarter of the financial
year. Over 330 holes for 40,000m have been drilled. Several weakly anomalous
intersections were recorded, though nothing of any significance that will impede
infrastructure development. Sub-economic mineralisation is generally associated
with felsic, silica-sericite- carbonate altered igneous rocks.
Rock Chip Sampling and Mapping
A program of rock chip sampling and field mapping of gullies and outcrop in the
eastern, southern and western hills was undertaken to supplement drill
information in areas of difficult access for rigs. Continuous chip sampling of
access tracks throughout Sukari Hill and surrounds was also undertaken to help
understand and evaluate near surface mineralisation. 7,500 rock chip and channel
samples were taken during the year.
Results of chip sampling of rig access tracks cut into Sukari Hill confirmed
previous mapping and understanding of mineralisation. Chip sampling of the Mike
and Lower Mike Tracks in the Pharaoh Zone confirmed the presence and tenor of
the Cleopatra Zone mineralisation, associated with the major North West dipping
outcropping quartz vein shear and green sericite alteration zone.
Regional Sampling has highlighted several zones with anomalous Au values that
are being followed up. The gullies (wadis) to the north east of the Sukari Hill
porphyry returned several promising assays which are currently being evaluated
(Table 2). Mineralisation is related to extensional quartz veining in sericite -
silica - carbonate altered porphyry style rocks. The Western Hills Gullies also
returned weakly anomalous rock chip samples that have been supported by drilling
as described above.
Table 2 - Rock Chip Samples, Regional Work - >0.1g/t Au
+--------+---------------+-------+-------+--------+-------------+
| SAMPLE | PROSPECT | NORTH | EAST | GOLD | Comments |
| | | | | (g/t) | |
+--------+---------------+-------+-------+--------+-------------+
| 231128 | Call Wadi | 11011 | 11459 | 8.8 | Altered |
| | | | | | Porphyry |
+--------+---------------+-------+-------+--------+-------------+
| 231129 | Call Wadi | 11009 | 11457 | 0.687 | Altered |
| | | | | | Porphyry |
+--------+---------------+-------+-------+--------+-------------+
| 230986 | Call Wadi | 11094 | 11526 | 0.356 | Altered |
| | | | | | Porphyry |
+--------+---------------+-------+-------+--------+-------------+
| 231010 | South Sukari | 8853 | 10916 | 1.37 | Altered |
| | | | | | Porphyry |
+--------+---------------+-------+-------+--------+-------------+
| 231467 |Western Gullies| 10191 | 8094 | 1.3 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 221860 |Western Gullies| 10038 | 7981 | 0.472 | Listvenite |
+--------+---------------+-------+-------+--------+-------------+
| 231479 |Western Gullies| 10215 | 8088 | 0.442 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 231466 |Western Gullies| 10189 | 8095 | 0.357 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 231465 |Western Gullies| 10188 | 8096 | 0.189 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 231476 |Western Gullies| 10210 | 8090 | 0.185 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 231469 |Western Gullies| 10195 | 8093 | 0.169 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 231470 |Western Gullies| 10198 | 8094 | 0.163 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
| 231471 |Western Gullies| 10200 | 8093 | 0.161 | Rhyodacite |
+--------+---------------+-------+-------+--------+-------------+
Trenches were dug and samples in the alluvial spoil piles in Wadi Pharaoh,
adjacent to the east flank of the hill in the Pharaoh Zone were taken. All
samples were mineralised, with several +1g/t samples, and an average grade for
all samples of 0.2g/t Au. Results are currently being followed up with close
spaced RC drilling to test the full extent and depth of the deposit. Depths of
transported material up to 13m have been logged, far greater than estimated from
trenching.
Regional Exploration
More detailed work on the regional targets away from the Sukari porphyry has
gradually increased during the year. Drill sites have been prepared for Student,
Pincer and DZS prospects to follow up ore grade rock chips samples off the
northern end of the Sukari porphyry, and await the drill rig. Field
investigation continues of other prospects such as Umm Kola, Kurdeman and Sukari
North.
The 2007-2008 year should be a very productive and exciting one for regional
exploration.
Structural Study
Jigsaw Geoscience conducted structural mapping and analysis of Sukari Hill
outcrop and core logging and spectral scanning of core samples, as well as a
review of the main regional prospects around Sukari. Results confirmed the
current geological model and improved the understanding of alteration and
mineralisation paragenesis and structural controls. Training of Egyptian
geologists in detailed structural mapping and analysis was also undertaken, and
will continue.
Grade Control
Grade Control ("GC") RC drilling commenced late in the last quarter, on the
1185RL bench in the Amun Zone above the historical mine workings. Preparation of
benches for blasting and GC drilling continues.
Table 3 - Significant Intersections, Sukari Project 2007
+--------+------+-------+------+----+------+------+------+---------+-------+
| HOLE |NORTH | EAST | DIP |AZI | EOH | FROM | TO |INTERVAL | Au |
| | | | | | | | | | (g/t) |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD421 |11125 | 10770 | -90 | 0 |815.4 | 595 | 715 | 120 | 1.98 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 611 | 612 | 1 |102.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 615 | 616 | 1 | 6.17 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD433 |11125 | 10852 | -88 |270 |794.7 | 577 | 600 | 23 | 9.82 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 591 | 592 | 1 | 65.30 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 598 | 599 | 1 |130.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD434 |11175 | 10842 | -89 |270 | 627 |284.5 | 323 | 38.5 | 2.53 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 296 | 304 | 8 | 5.86 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 522 | 577 | 55 | 2.23 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 543 | 544 | 1 | 10.50 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 563 | 567 | 4 | 8.09 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 570 | 572 | 2 | 7.82 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD437 |11175 | 10766 | -89 |270 |764.66| 299 | 385 | 86 | 1.96 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 324 | 331 | 7 | 5.06 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 356 | 358 | 2 | 12.38 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 576 | 705 | 129 | 1.28 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 605 | 606 | 1 | 21.10 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 615 | 616 | 1 | 10.10 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD454 |10950 | 10665 | -82 |270 |721.5 | 523 | 563 | 40 | 8.65 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 528 | 529 | 1 |189.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 537 | 538 | 1 | 20.20 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 544 | 545 | 1 | 13.80 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD574 |11300 | 10678 | -70 |270 |545.5 | 488 | 518 | 30 | 16.90 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 501 | 502 | 1 |410.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 512 | 513 | 1 | 19.30 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD595 |11850 | 10830 | -87 |270 | 380 | 164 | 191 | 27 | 3.28 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 175 | 179 | 4 | 16.13 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD660 |10912 | 10550 | -90 | 0 |505.1 | 374 | 438 | 64 | 2.07 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 389 | 390 | 1 | 53.60 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 451 | 494 | 43 | 7.86 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 490 | 491 | 1 |300.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD691 |11000 | 10443 | -90 | 0 | 150 | 0 | 30 | 30 | 3.83 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 10 | 14 | 4 | 18.33 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD699 |11050 | 10726 | -90 | |648.7 | 272 | 368 | 96 | 1.75 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 294 | 297 | 3 | 8.61 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 361 | 362 | 1 | 22.70 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 374 | 394 | 20 | 2.78 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 381 | 385 | 4 | 6.51 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 518 | 543 | 25 | 5.72 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 531 | 541 | 10 | 12.80 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 584 |648.7 | 64.7 | 2.59 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 610 | 614 | 4 | 12.59 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 647 |648.7 | 1.7 | 13.50 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD703 |10949 | 10663 | -75 |270 |622.1 | 295 | 314 | 19 | 4.94 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 302 | 303 | 1 | 74.70 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 385 | 405 | 20 | 6.81 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 404 | 405 | 1 | 97.70 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 470 | 545 | 75 | 1.83 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 476 | 490 | 14 | 3.44 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 507 | 508 | 1 | 17.30 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 588 | 596 | 8 |101.71 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 591 | 592 | 1 |340.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD708 |11150 | 10958 | -75 |270 |709.6 | 556 | 579 | 23 | 4.30 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 567 | 568 | 1 | 28.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 578 | 579 | 1 | 43.60 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D724 |10900 | 10529 | -83 |270 | 387 | 251 | 300 | 49 | 3.05 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 272 | 274 | 2 | 13.12 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD728 |11472 | 10768 | -90 | 0 | 710 | 629 | 655 | 26 | 6.67 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 634 | 637 | 3 | 30.83 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 646 | 652 | 6 | 7.77 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD735 |11150 | 10723 | -90 | 0 |776.2 |658.4 | 687 | 28.6 | 10.54 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 669 | 670 | 1 |142.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 679 | 680 | 1 | 45.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD736 |11050 | 10835 | -80 |270 |844.5 | 498 | 522 | 24 | 1.92 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 516 | 517 | 1 | 8.53 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 542 | 587 | 45 | 1.63 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 560 | 561 | 1 | 6.96 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 567 | 568 | 1 | 10.90 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD741 |11325 | 10729 | -90 | 0 |809.3 | 601 | 739 | 138 | 1.35 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD743 |11425 | 10760 | -90 | 0 |710.7 | 601 | 675 | 74 | 3.04 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 606 | 609 | 3 | 19.87 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 616 | 618 | 2 | 39.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD744 |11375 | 10778 | -90 | 0 |732.6 | 618 |645.4 | 27.4 | 2.54 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 636 | 637 | 1 | 6.03 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 642 | 644 | 2 | 20.80 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 678 | 688 | 10 | 4.05 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 685 | 686 | 1 | 9.31 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| RCD784 |11925 | 10810 | -56 |270 | 150 | 3 | 76 | 73 | 1.58 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 18 | 21 | 3 | 7.31 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D827 |11750 | 10835 | -75 |270 |162.3 | 50 | 79 | 29 | 1.50 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 54 | 61 | 7 | 3.93 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D842 |11725 | 10804 | -90 | 0 |304.3 | 10 | 15 | 5 | 1.04 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 31 | 52 | 21 | 1.73 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 33 | 34 | 1 | 10.10 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 175 | 178 | 3 | 4.04 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 177 | 178 | 1 | 10.30 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 206 | 215 | 9 | 1.44 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 225 | 230 | 5 | 1.08 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 271 | 301 | 30 | 0.89 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D845 |11850 | 10910 | -87 |270 |108.92| 51 | 65 | 14 | 1.23 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 58 | 59 | 1 | 6.24 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 92 | 98 | 6 | 1.37 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 103 |108.92| 5.92 | 0.96 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D856 |11175 | 10604 | -50 |270 |328.5 | 63 | 91 | 28 | 4.62 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 73 | 75 | 2 | 39.05 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 89 | 90 | 1 | 6.34 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D860 |11775 | 10800 | -87 |270 |281.92| 7 | 9 | 2 | 1.36 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 19 | 21 | 2 | 2.27 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 82 | 84 | 2 | 4.42 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 97 | 102 | 5 | 1.57 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 107 | 109 | 2 | 1.27 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 117 | 136 | 19 | 1.24 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 259 | 263 | 4 | 1.48 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D910 |11775 | 10805 | -55 |270 |351.72| 27 | 31 | 4 | 2.18 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 41 | 49 | 8 | 0.96 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 80 | 84 | 4 | 1.21 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D1013 |10550 | 10700 | -80 |270 | 451 | 276 | 319 | 43 | 1.61 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 310 | 311 | 1 | 6.81 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 375 | 397 | 22 | 3.83 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 387 | 389 | 2 | 11.73 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 391 | 393 | 2 | 19.15 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D1042 |10500 | 10767 | -74 |265 |441.4 | 322 | 397 | 75 | 2.17 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 385 | 386 | 1 | 7.37 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 394 | 397 | 3 | 16.53 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D1073 |10450 | 10751 | -83 |270 | 702 | 320 | 517 | 197 | 2.18 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 372 | 375 | 3 | 12.25 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 445 | 447 | 2 | 54.95 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1124 |10350 | 10700 | -83 |270 |573.6 | 326 | 368 | 42 | 6.24 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 326 | 327 | 1 |213.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 461 | 488 | 27 | 3.66 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 466 | 467 | 1 | 26.80 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 486 | 487 | 1 | 45.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D1143 |10400 | 10710 | 270 |-83 | 610 | 311 | 523 | 212 | 2.37 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 348 | 349 | 1 | 8.00 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 451 | 452 | 1 | 94.20 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 488 | 491 | 3 | 39.61 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D1158 |11875 | 10975 | 270 |-55 |97.92 | 67 | 95 | 34 | 2.41 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 74 | 77 | 3 | 10.07 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 81 | 83 | 2 | 8.30 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1162 |10250 | 10700 | 270 |-87 |570.5 | 347 | 408 | 61 | 2.27 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 349 | 351 | 2 | 5.48 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 362 | 363 | 1 | 13.60 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 403 | 407 | 4 | 10.04 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1163 |10201 | 10649 | 270 |-85 |573.3 | 334 | 357 | 23 | 2.60 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 336 | 339 | 3 | 12.73 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
| D1164 |11250 | 10672 | 0 |-90 |764.5 | 711 | 764 | 53 | 3.21 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 728 | 736 | 8 | 9.36 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 752 | 755 | 3 | 11.27 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1165 |10152 | 10662 | 270 |-80 |719.6 | 343 | 388 | 45 | 2.35 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1166 |10102 | 10611 | -87 |270 |534.5 | 279 | 302 | 23 | 6.23 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 309 | 377 | 68 | 1.89 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1177 |10198 | 10706 | 270 |-87 |727.1 | 367 | 432 | 65 | 18.31 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 367 | 372 | 5 |209.43 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | | | | |
+--------+------+-------+------+----+------+------+------+---------+-------+
|RCD1178 |10298 | 10758 | -87 |270 |617.6 | 380 | 485 | 105 | 4.10 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | | | 500 | 517 | 17 | 12.45 |
+--------+------+-------+------+----+------+------+------+---------+-------+
| | | | | |incl. | 501 | 503 | 2 | 76.35 |
+--------+------+-------+------+----+------+------+------+---------+-------+
Notes:
1. Pharaoh Gold Mines NL (a wholly owned subsidiary of Centamin Egypt Limited)
is the holder of a Mining (Exploitation) Lease covering an area of 160 km2
that contains the proposed Sukari mine site and surrounding prospects. This
lease is issued under the existing Law 222 of 1994, which was enacted by the
Egyptian Government specifically to accommodate the Company's exploration and
mining activities in the Eastern Desert (the Eastern Desert Concession). The
Lease has a tenure of thirty years with the option to renew for a further
thirty years.
2. An Egyptian mineral concession held under application by Egyptian Pharaoh
Investment (EPI) an Egyptian Company jointly owned by Centamin Egypt Limited
and Kara Gold NL under an agreement with the Egyptian Government. Under the
terms of this agreement to develop a heavy minerals project at Rosetta on the
Mediterranean coast, east of Alexandria, any profit from mining and separation
of the heavy minerals will be shared with the Egyptian Government after EPI
recoups all of its development expense. Any profit from the upgrading of the
ilmenite to pigment quality TiO2 (titanium dioxide) will be 100% EPI.
AUSTRALIAN PROJECTS
Nelson's Fleet
The Company is entitled to a royalty over the Nelson's Fleet gold project near
St Ives, Western Australia, from the St Ives Gold Mining Co Pty Ltd, a
subsidiary of Gold Fields Ltd. The Company has not been informed of any mining
of the tenement to date.
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, 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.
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 350mRL (approximately 950 metres
below the crest of the Sukari hill) 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.
CORPORATE ACTIVITIES
In July 2006, Minister Sameh Fahmy and members of Parliament revisited Sukari
site, resulting in positive media coverage and increased public interest in the
Project.
In October 2006, the Company, via its fully owned subsidiary, Pharaoh Gold Mines
NL, entered into an agreement with a subsidiary of Newmont Mining Corporation,
to acquire the Kori Kollo CIL process plant which is located in Bolivia for
US$11 million. The acquisition was funded out of existing cash reserves of the
Company at the time. Dismantling work commenced in February 2007 and the Plant
is due to arrive into Egypt in the fourth quarter of 2007.
The Company embarked on its first North American road show in December 2006
visiting institutional investors and clients of Westwind Partners Inc in New
York, Boston and Toronto. The road show was deemed to be highly successful and
as a result the company engaged Westwind Partners to work towards a full Toronto
Stock Exchange ("TSX") listing to complement the existing AIM and ASX Listings.
In January 2007, The Egyptian Ministry of Petroleum and Mineral Resources
("EMRA") and the International Finance Corporation ("IFC"), the private sector
arm of the World Bank Group, signed an agreement for a technical assistance
program to review and reform Egypt's legal and taxation policy framework for
private sector mining investments. Managed by IFC's technical assistance unit in
the Middle East and North Africa, the joint project will undertake a review and
define specific policy recommendations for the development of the Egyptian
mining industry with particular focus on the legal, fiscal and institutional
framework. Egypt's government wishes to liberalise the country's mining industry
to attract more domestic and foreign investment. Centamin welcomes and fully
supports this new initiative.
In February 2007, the Company announced that the Definitive Feasibility Study
("DFS") into the Sukari Gold Project had been completed, and the Board of
Directors approved the development of the Project.
The Company acquired a 28MW Heavy Fuel Oil second hand power plant from Turkey
in February 2007, following inspection and assessment of its condition. This
purchase removed a significant amount of project risk from the completion
schedule and represented a material saving on the budgeted capital expenditure.
The contract for the dismantlement, packing and transportation within Turkey was
awarded to Magdenli, a Turkish engineering group, with a small Centamin team
overseeing the activities.
In April 2007, the Company placed approximately 175 million new shares to raise
C$151 million to fund the development of the Sukari Gold Project. The placing
was heavily oversubscribed. Subsequent to this, the Company completed a full TSX
listing and shares began trading on 05 April 2007.
On 17 April 2007, the Company announced that Barclays Capital, the investment
banking division of Barclays Bank Plc, was appointed as Mandated Lead Arranger
to finance up US$100 million for the Project. Though the funding is subject to
completion of due diligence and detailed documentation, together with the
proceeds raised through the TSX listing and offering, this facility completed
the financing arrangements required for the development of the Project. The due
diligence process commenced in April 2007 with the review of Project data, and
key banking personnel visited site in May 2007.
In May 2007, the Company announced that it had received environmental approval
from the Egyptian Environmental Affairs Agency ("EEAA") for the Sukari Gold
Project.
DIRECTORS' REPORT
The Directors of Centamin Egypt Limited submit herewith the annual financial
report of the Company for the financial year ended 30 June 2007. In order for
the Company to comply with the provisions of the Corporations Act 2001, the
Directors' Report is as follows:-
DIRECTORS
The names and particulars of the directors of the Company during or since the
end of the financial year are:-
Mr Sami El-Raghy B.Sc. (Hons), FAusIMM, FSEG
Chairman, age 66
Director since 29 April 1993
A graduate of Alexandria University in 1962, Mr El-Raghy worked in Egypt and
Europe before moving to Australia in 1968 and joining American Smelting and
Refining Company (Asarco). He was instrumental in the discovery and development
of a number of gold mines, including the Wiluna Gold Mine for Asarco and the Mt
Wilkinson Gold mine for Chevron Exploration. Mr El-Raghy recognised the
potential of the Marymia Dome and the Barwidgee Yandal Belt long before these
areas became the most sought after mining areas in Australia. Mr El-Raghy brings
to the board over 40 years experience in the industry, both in Australia and
overseas.
Mr Josef El-Raghy B.Comm
Managing Director/CEO, age 36
Director since 26 August 2002
Josef El-Raghy holds a Bachelor of Commerce Degree from the University of
Western Australia and had a ten year career in stock broking. He was formerly a
director of both CIBC Wood Gundy and Paterson Ord Minnett. His expertise in
international capital markets has greatly assisted the Company in its
fundraising and development activities. Mr El-Raghy was also a director of ISIS
Resources Plc (now Verona Pharma Plc) from 24 February 2005 to 18 September
2006.
Mr Colin Cowden FAII, ASA, ACIS, ACIM, FNIBA, CD
Non Executive Director, age 63
Member Audit Committee
Member Remuneration Committee
Director since 8 March 1982
Colin Cowden is the Executive Chairman of Cowden Limited, a licensed insurance
broking company formed in 1972. Cowden Limited is a prominent broking firm in
Western Australia with branch offices in Sydney, Melbourne and Adelaide. Mr
Cowden has been a director of Wentworth Holdings Limited since 26 October 2005,
and from 27 November 1998 until 27 October 2005, was a director of OAMPS
Limited.
Mr G. Brian Speechly FAusIMM
Non Executive Director, age 74
Member Audit Committee
Member Remuneration Committee
Director since 15 August 2000
Brian Speechly is a Fellow of the Australasian Institute of Mining and
Metallurgy with over 50 years experience in the mining industry. During his
career, Mr Speechly has been involved in over 320 mining projects and is
recognised in Australia and overseas as an expert in both underground and open
pit mining and design. He is particularly noted for his innovative and low cost
approaches to mining issues. Mr Speechly has been a director of Dynasty Metals &
Mining Inc since 28 April 2004.
Dr Thomas G. Elder PhD, FIMM, FGS
Non Executive Director, age 68
Director since 8 May 2002
Dr Elder is a geology graduate of Durham University and post-graduate NATO
Scholar at the University of Oslo. His extensive background in mineral
exploration was gained with major companies including BP and Rio Tinto. Dr Elder
ran exploration programmes in the UK, Spain, Italy, Portugal and Greenland for
Cominco, prior to his appointment as worldwide Exploration Manager for BP
Minerals in 1983. Following the take-over by Rio Tinto in 1989, he had special
responsibility for project development in the Former Soviet Union. Dr Elder has
been a non-executive director of Angus & Ross since 12 January 2006 and has been
the President of Mano River Resources Inc since 04 October 1998.
Mr H. Stuart Bottomley
Non Executive Director, age 62
Member Audit Committee
Director since 26 September 2005
Stuart Bottomley worked as a portfolio manager for over twenty years, firstly
with the "Target Group" of trusts and subsequently with Fidelity International.
For the last 16 years, he has acted as a consultant to a number of private and
public companies with a growing emphasis on the mining industry. Mr Bottomley
has also been a director of ISIS Resources Plc (now Verona Pharma Plc) since 24
February 2005, African Consolidated Resources Plc since 27 May 2005 and
Starfield Resources Inc since 01 February 2007.
MANAGEMENT
Mrs Heidi Brown GCertAppFin (Finsia)
Company Secretary
Mrs Brown has over nine years experience in the finance and securities
industries and has completed the Chartered Secretaries Australia Graduate
Diploma of Corporate Governance. Mrs Brown also holds a Graduate Certificate of
Applied Finance and Investment and a Diploma of Financial Advising through the
Financial Services Institute of Australasia (Finsia).
Mr Mark Smith B.Bus. (Accy), CPA, MAICD
Chief Financial Officer
Mr Smith has a Bachelor of Business undergraduate degree, with a major in
Accountancy, obtained from the Queensland University of Technology and is a
Certified Practicing Accountant with 16 years post-graduate experience across a
wide variety of industries. He has held senior financial positions with a number
of Australian publicly listed companies in the resources sector, most recently
as the CFO for Grange Resources Limited and prior to that for Red Back Mining
Inc and Chirano Gold Mines Ltd in Ghana. Mr Smith has considerable experience in
project financing, establishing accounting systems and controls for project
development and operations reporting and is based in Egypt.
Mr Robert Sinclair
Sukari Project Development Manager
Mr Sinclair has over 40 years experience in engineering and construction on
projects in mining and chemical industries. These projects are located in the US
, Australia, Canada, Asia and Africa and range in value from US$30 million to
US$850 million. Mr Sinclair has technical experience in senior management
positions with both engineering contractors and with the owner's team and has
managed pre-feasibility and feasibility studies, EPC and EPCM contracts and
direct hire jobs. Mr Sinclair most recently worked as the Area Manager,
Infrastructure for the Koniambo Nickel Project in New Caledonia and previously
as the EPC Manager and Acting General Manager of the Chirano Gold Mine in Ghana.
Mr John McLeod
General (Operations) Manager
Mr McLeod holds a Bachelor of Science from the University of Calgary in Canada,
a Bachelor of Education from Queens University in Kingston, Canada, and a Master
of Education (Management and Innovation) from Western Governor's University in
Utah. Mr McLeod is a member of the Society of Mining, Metallurgy and Exploration
(SME) and of the International Society of Explosive Engineers, and has over 30
years experience in most facets of surface and underground mining all over the
world. Before joining the company in June 2007, Mr McLeod held management
positions with Saudi Arabian Mining Corporation (Ma'aden) and with Eltin (Chile).
Mr Youssef El-Raghy
General Manager - Egyptian Operations
An officer graduate of the Egyptian Police Academy Mr El-Raghy held senior
management roles within the Egyptian Police force for a period in excess of ten
years, having attained the rank of captain, prior to joining the Company. Mr
El-Raghy has extensive contacts within the government and industry and maintains
excellent working relationships with all of the Company's stakeholders within
Egypt.
DIRECTORS' MEETINGS
The following table sets out the number of directors' meetings (including
meetings of the committees of directors) held during the financial year and the
number of meetings attended by each director (while they were a director or
committee member). During the financial year, 10 board meetings, 1 remuneration
committee meeting and 3 audit committee meetings were held.
+-----------------+-------------------+-------------------+-----------------+
| |Board of Directors | Remuneration | Audit Committee |
| | | Committee | |
+-----------------+---------+---------+---------+---------+--------+--------+
|Director | Held |Attended | Held |Attended | Held |Attended|
+-----------------+---------+---------+---------+---------+--------+--------+
|Mr S El-Raghy | 10 | 10 | - | - | - | - |
+-----------------+---------+---------+---------+---------+--------+--------+
|Mr C Cowden | 10 | 10 | 1 | 1 | 3 | 3 |
+-----------------+---------+---------+---------+---------+--------+--------+
|Mr G B Speechly | 10 | 7 | 1 | 1 | 3 | 3 |
+-----------------+---------+---------+---------+---------+--------+--------+
|Dr T G Elder | 10 | 10 | - | - | - | - |
+-----------------+---------+---------+---------+---------+--------+--------+
|Mr J El-Raghy | 10 | 10 | - | - | - | - |
+-----------------+---------+---------+---------+---------+--------+--------+
|Mr H S Bottomley*| 10 | 10 | - | - | 3 | 2 |
+-----------------+---------+---------+---------+---------+--------+--------+
* Mr H S Bottomley became a member of the Audit Committee on 02 April 2007
In addition to these formal meetings, during the year the Directors considered
and passed twenty four (24) Circular Resolutions pursuant to clause 15.10 of the
Company's constitution.
PRINCIPAL ACTIVITIES
The consolidated entity's principal activities during the course of the
financial year were the exploration for precious and base metals, completion of
the Definitive Feasibility Study into the Sukari project, listing the Company on
the Toronto Stock Exchange (TSX) and commencement of the development phase at
the Sukari project.
DIVIDENDS
No dividends have been declared or paid since the end of the previous financial
year.
CHANGES IN STATE OF AFFAIRS
There was no change in the state of affairs of the consolidated entity during
the financial year.
FUTURE DEVELOPMENTS
It is the objective of the Company, to continue to drill at the Sukari project,
so as to increase the overall size of the geological resource, whilst at the
same time, complete construction of the processing plant and ancillary
infrastructure. Commissioning and production is anticipated in the fourth
quarter of 2008. Gold production from the Sukari project is forecast to have a
positive cashflow effect on the Company and consolidated entity.
SHARE OPTIONS
OPTIONS/BROKER WARRANTS ISSUED DURING THE FINANCIAL YEAR
A total of 9,695,000 unlisted options were issued during the financial year to
30 June 2007. The details of these options are as follows:-
+---------------------+--------------------+------------------+
| Number of Ordinary | Exercise Price | Expiry Date |
| shares under option | A$ | |
+---------------------+--------------------+------------------+
| 250,000 | 0.6566 | 30 August 2009 |
+---------------------+--------------------+------------------+
| 2,000,000 | 0.8000 | 09 January 2009 |
+---------------------+--------------------+------------------+
| 3,615,000 | 0.7106 | 31 January 2010 |
+---------------------+--------------------+------------------+
| 2,330,000 | 1.0500 | 24 May 2010 |
+---------------------+--------------------+------------------+
| 1,500,000 | 1.1636 | 25 June 2010 |
+---------------------+--------------------+------------------+
A total of 8,794,691 broker warrants were issued during the financial year to 30
June 2007. The details of these warrants are as follows:-
+---------------------+--------------------+------------------+
| Number of Ordinary | Exercise Price | Expiry Date |
|shares under warrant | C$ | |
+---------------------+--------------------+------------------+
| 3,751,431 | 0.86 | 05 April 2009 |
+---------------------+--------------------+------------------+
| 4,429,678 | 0.86 | 11 April 2009 |
+---------------------+--------------------+------------------+
| 613,582 | 0.86 | 20 April 2009 |
+---------------------+--------------------+------------------+
OPTIONS CONVERTED DURING THE FINANCIAL YEAR
A total of 1,345,000 unlisted options were exercised during the financial year
to 30 June 2007. The details of these options are as follows:-
+-------------------+-------------------+------------------+
|Number of Ordinary | Exercise Price | Expiry Date |
|shares under option| A$ | |
+-------------------+-------------------+------------------+
| 500,000 | 0.2310 | 12 November 2006 |
+-------------------+-------------------+------------------+
| 500,000 | 0.3549 | 15 December 2006 |
+-------------------+-------------------+------------------+
| 380,000 | 0.2804 | 04 February 2008 |
+-------------------+-------------------+------------------+
| 165,000 | 0.2804 | 17 February 2008 |
+-------------------+-------------------+------------------+
The issuing entity was Centamin Egypt Limited. The market weighted average
closing price of Centamin Egypt Limited shares during the 2006-2007 year was
$0.95255. No amount was unpaid on these shares.
EMPLOYEE OPTION PLANS
At the Annual General Meeting on 29 November 2002, shareholders approved the
Employee Option Plan 2002. The following options have been issued to Executives
and Employees under the plan to date.
+---------------------+--------------------+------------------+
| Number of Ordinary | Exercise Price | Expiry Date |
| shares under option | A$ | |
+---------------------+--------------------+------------------+
| 250,000 | 0.2900 | 11 November 2005 |
+---------------------+--------------------+------------------+
| 1,160,000 | 0.2310 | 12 November 2006 |
+---------------------+--------------------+------------------+
| 130,000 | 0.2310 | 17 November 2006 |
+---------------------+--------------------+------------------+
| 750,000 | 0.3549 | 15 December 2006 |
+---------------------+--------------------+------------------+
| 775,000 | 0.2804 | 04 February 2008 |
+---------------------+--------------------+------------------+
| 410,000 | 0.2804 | 17 February 2008 |
+---------------------+--------------------+------------------+
| 1,500,000 | 0.4355 | 08 December 2008 |
+---------------------+--------------------+------------------+
| 250,000 | 0.6566 | 30 August 2009 |
+---------------------+--------------------+------------------+
At the Annual General Meeting on 20 November 2006, shareholders approved the
Employee Option Plan 2006. The following options have been issued to Executives
and Employees under the plan to date.
+---------------------+--------------------+------------------+
| Number of Ordinary | Exercise Price | Expiry Date |
| shares under option | A$ | |
+---------------------+--------------------+------------------+
| 3,615,000 | 0.7106 | 31 January 2010 |
+---------------------+--------------------+------------------+
| 2,330,000 | 1.0500 | 24 May 2010 |
+---------------------+--------------------+------------------+
| 1,500,000 | 1.1636 | 25 June 2010 |
+---------------------+--------------------+------------------+
The following options were not issued under any of the Employee Option Plans,
however, were issued in accordance with employment contracts/service agreements.
+---------------------+--------------------+------------------+
| Number of Ordinary | Exercise Price | Expiry Date |
| shares under option | A$ | |
+---------------------+--------------------+------------------+
| 4,250,000 | 0.3500 | 31 October 2010 |
+---------------------+--------------------+------------------+
| 2,000,000 | 0.8000 | 09 January 2009 |
+---------------------+--------------------+------------------+
During the financial year, the following broker warrants were issued to Westwind
Partners in accordance with the Agency Agreement in relation to the TSX listing.
No warrants have been exercised during or since the end of the financial year.
+---------------------+--------------------+------------------+
| Number of Ordinary | Exercise Price | Expiry Date |
| shares under option | | |
+---------------------+--------------------+------------------+
| 3,751,431 | C$0.86 | 05 April 2009 |
+---------------------+--------------------+------------------+
| 4,429,678 | C$0.86 | 11 April 2009 |
+---------------------+--------------------+------------------+
| 613,582 | C$0.86 | 20 April 2009 |
+---------------------+--------------------+------------------+
OPTIONS / WARRANTS ISSUED SUBSEQUENT TO BALANCE DATE
There have been no options or warrants issues subsequent to balance date.
OPTIONS EXERCISED SUBSEQUENT TO BALANCE DATE
120,000 options have been exercised subsequent to balance date. The details of
these options are as follows:-
+--------------------+---------------------+------------------+
| Number | Exercise Price | Expiry Date |
| | A$ | |
+--------------------+---------------------+------------------+
| 50,000 | 0.2804 | 17 February 2008 |
+--------------------+---------------------+------------------+
| 70,000 | 0.7106 | 31 January 2010 |
+--------------------+---------------------+------------------+
The issuing entity was Centamin Egypt Limited. No amount was unpaid on these
shares.
ENVIRONMENTAL REGULATIONS
The consolidated entity is currently complying with relevant environmental
regulations and has no outstanding environmental orders against it.
EVENTS SUBSEQUENT TO BALANCE DATE
On 29 August 2007 the Company announced that the dismantling of the Kori Kollo
gold processing plant in Bolivia had been completed and the containerised plant
had been transported from Bolivia to the port of Arica in northern Chile where
it was awaiting ship loading and transportation to Egypt.
Other than as set out above there has not risen in the interval between the end
of the financial year and the date of this report any item, transaction or event
of a material and unusual nature likely in the opinion of the Directors of the
company to affect significantly the operations of the company, the results of
those operations, or the state of affairs of the company in subsequent financial
years.
REVIEW OF OPERATIONS
A review of the Company's operations is located at the beginning of this report.
INDEMNIFICATION OF DIRECTORS & AUDITORS
During the financial year, the Company paid a $32,412 premium in respect of a
contract insuring the directors and officers of the Company and any related body
corporate against a liability incurred as a director or officer to the extent
permitted by the Corporations Act 2001.
The Company has not otherwise, during or since the end of the financial year
except to the extent permitted by law, indemnified or agreed to indemnify an
officer or auditor of the Company or of any related body corporate against a
liability incurred as such an officer or auditor.
REMUNERATION REPORT
The Directors of Centamin Egypt Limited present the Remuneration Report prepared
in accordance with section 300A of the Corporations Act 2001 for the Company and
the consolidated entity for the financial year ended 30 June 2007. For the
purposes of this report, Directors and executives of the Company and
consolidated entity are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of
the Company and consolidated entity, directly or indirectly, including any
director (whether executive or otherwise) of the parent company. This
Remuneration Report forms part of the Directors' Report.
OVERVIEW
Remuneration levels for Directors and executives are competitively set to
attract the most qualified and experienced candidates. Details of the Company's
remuneration strategy for the 2007 financial year are set out in this
Remuneration Report.
This Remuneration Report:
*explains the Board's policies relating to remuneration of Directors and
executives;
*discusses the relationship between these policies and the Company's
performance; and
*sets out remuneration details for each director and senior executive.
The fees paid to Non-Executive Directors are set at levels which reflect both
the responsibilities of, and the time commitments required from each
Non-Executive Director to discharge their duties and are not linked to the
performance of the Company.
The remuneration strategy for the Managing Director / Chief Executive Officer
(CEO) and executives including the Company Secretary comprise a fixed cash
component, statutory superannuation contributions, an annual merit based
performance bonus and where applicable the issue of share options in the Company
which is intended to:
*provide competitive rewards to attract high calibre executives; and
*link executive rewards to shareholder value.
Criteria used to determine the annual merit based performance bonus is the
setting of key objectives for each executive and measuring performance against
these targets which centre on Company performance, improvement in net profit and
improvement in return to shareholders.
Share options are offered to executives at the discretion of the Directors,
having regard, among other things, to the length of service with the Group, the
past and potential contribution of the person to the Group and in some cases,
performance.
DIRECTOR AND EXECUTIVE DETAILS
The following persons acted as directors of the company during or since the end
of the financial year:-
* Mr Sami El-Raghy (Chairman)
* Mr Josef El-Raghy (Managing Director/CEO)
* Dr Thomas G Elder (Non-Executive Director)
* Mr Colin Cowden (Non-Executive Director)
* Mr G Brian Speechly (Non-Executive Director)
* Mr H Stuart Bottomley (Non-Executive Director)
The highest remunerated (and only) company executive for the 2007 financial year
was:-
* Mrs Heidi Brown (Company Secretary)
The highest remunerated group executives for the 2007 financial year were:-
* Mr Mark Smith (Chief Financial Officer) , appointed to the position 01
January 2007
* Mr Wayne Foote (General Manager - Operations), resigned 22 May 2007
* Mr John McLeod (General Manager - Operations), appointed 01 June 2007
DIRECTOR AND EXECUTIVE REMUNERATION
The Remuneration Committee reviews the remuneration packages of all Directors
and executives on an annual basis. Remuneration packages are reviewed and
determined with due regard to current market rates and are benchmarked against
comparable industry salaries, adjusted by a performance factor to reflect
changes in the performance of the Company.
+---------+---------------------------------+-----------------+---------+--------+--------------------------+--------+
| | Short-term employee benefits |Post-employment | Other | | Share-based payment | |
| | | benefits |long-term|Termi- |--------------------------| |
| |---------------------------------|-----------------|employee |nation | Equity-settled | Cash | |
| | Salary & | | Non- | | Super- | |benefits |benefits|------------------|settled| Total |
| | Fees |Bonus |monetary |Other|annuation |Other | | |Shares | Options | | |
| | | | | | | | | |& units|& rights 1| | |
| 2007 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------|
|S | 387,583 | -| -| -| -| -| -| -| -| -| -| 387,583|
|El-Raghy | | | | | | | | | | | | |
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|J | 412,500 |50,000| 4,523| -| -| -| -| -| -| -| -| 467,023|
|El-Raghy2| | | | | | | | | | | | |
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|T Elder | 51,504 | -| -| -| -| -| -| -| | 17,053| -| 68,557|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|C Cowden | 26,875 | -| -| -| 2,418| -| -| -| -| 17,053| -| 46,346|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|G B | 26,875 | -| -| -| 2,418| -| -| -| -| -| -| 29,293|
|Speechly | | | | | | | | | | | | |
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|H | 51,504 | -| -| -| -| -| -| -| | 17,053| -| 68,557|
|Bottomley| | | | | | | | | | | | |
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|M Smith 6| 127,500 | -| -| -| 37,777| -| -| -| -| 121,488| -| 286,765|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|W Foote5 | 361,411 | -| 22,547| -| 21,967| -| -| -| -| (57,968)7| -| 347,957|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|J McLeod3| 20,833 | -| -| -| -| -| -| -| -| 6,694| -| 27,527|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|H Brown4 | 85,000 |10,000| -| -| 8,550| -| -| -| -| 43,765| -| 147,315|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+--------+
|Total |1,551,585 |60,000| 27,070| -| 73,130| -| -| -| -| 165,138| -|1,876,923|
+---------+----------+------+---------+-----+----------+------+---------+--------+-------+----------+-------+---------+
1 Options value as per Black Scholes pricing method. Options are offered to
employees at the discretion of the Directors, having regard, among other things,
to the length of service with the Group, the past and potential contribution of
the person to the Group and in some cases, performance.
2 Bonus paid in respect to performance. The bonus represented 10.7% of total
remuneration and was paid on 31 October 2006. The bonus was paid for performance
related to capital raising endeavours.
3 Mr McLeod commenced with the Company on 01 June 2007.
4 Bonus paid in respect to added responsibilities and represents 7.5% of total
remuneration and was paid on 31 October 2006.
5 Mr Foote resigned on 22 May 2007.
6 Mr Smith was promoted to the position of Chief Financial Officer on 01 January
2007. His listed remuneration includes current and previous position held during
the financial year. Mr Smith commenced full time with the Group on 17 July 2006.
7 Reversal of remuneration recognised in prior year in relation to options which
had not vested at date of resignation.
+---------+---------------------------------+----------------+---------+--------+------------------------------------+
| | Short-term employee benefits | Post-employment| Other | | Share-based payment | |
| | | benefits |long-term|Termi- |--------------------------| |
| |---------------------------------|----------------|employee |nation | Equity-settled | Cash | |
| | Salary & | | Non- | | Super-| |benefits |benefits|------------------|settled| Total |
| | Fees |Bonus |monetary |Other|annuation| Other| | |Shares | Options | | |
| | | | | | | | | |& units|& rights 1| | |
| 2007 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|S | 357,353 | -| -| -| -| -| -| -| -| -| -| 357,353|
|El-Raghy | | | | | | | | | | | | |
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|J | 303,609 | -| 24,978| -| 2,860| -| -| -| -| -| -| 331,447|
|El-Raghy | | | | | | | | | | | | |
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|T Elder | 49,167 | -| -| -| -| -| -| -| -| 39,965| -| 89,132|
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|C Cowden | 25,000 | -| -| -| 2,250| -| -| -| -| 39,965| -| 67,215|
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|G B | 25,000 | -| -| -| 2,250| -| -| -| -| -| -| 27,250|
|Speechly | | | | | | | | | | | | |
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|H | 44,107 | -| -| -| -| -| -| -| -| 39,965| -| 84,072|
|Bottomley| | | | | | | | | | | | |
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|W Foote | 326,087 | -| 2,790| -| 29,348| -| -| -| -| 57,968| -| 416,193|
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|H Brown2 | 67,000 |20,000| -| -| 7,830| -| -| -| -| 10,892| -| 105,722|
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
|Total |1,197,323 |20,000| 27,768| -| 44,538| -| -| -| -| 188,755| -|1,478,384|
+---------+----------+------+---------+-----+---------+------+---------+--------+-------+----------+-------+---------+
1 Options value as per Black Scholes pricing method. Options are offered to
employees at the discretion of the Directors, having regard, among other things,
to the length of service with the Group, the past and potential contribution of
the person to the Group and in some cases, performance.
2 Bonus paid in respect to added responsibilities and represents 18% of total
remuneration and was paid on 31 October 2005.
EMPLOYMENT CONTRACTS
Remuneration and other terms of employment for the following Directors and
executives are formalised in employment agreements, the terms of which are set
out below:-
Josef El-Raghy, Managing Director/CEO
- term: 3 years (expiring 01 September 2008). 3 months notice of termination
period.
- base salary: $450,000 (net of taxes) pa, reviewed annually by the remuneration
committee
Sami El-Raghy, Chairman
- term: 3 months notice of termination period
- base salary: $400,000 (net of taxes) pa, reviewed annually by the remuneration
committee
Mark Smith, Chief Financial Officer
- term: 2 years (expiring 01 July 2009). 3 months notice of termination period.
- base salary: $250,000 (net of taxes) pa, reviewed annually by the remuneration
committee
John McLeod, Operations Manager
- term : 2 years (expiring 01 June 2009). 3 months notice of termination period.
- base salary : $250,000 (net of taxes) pa, reviewed annually by the
remuneration committee
Heidi Brown, Company Secretary
- term: 1 month notice of termination period
- base salary: $90,000 + 9% superannuation, reviewed annually by the
remuneration committee
No Director or executive is entitled to any termination payments apart from
remuneration payable up to and including the date of termination and all
payments due by way of accrued leave.
Options Issued to Directors and executives
Options are issued to Directors and executives under the Employee Option Plan
2006 (previously under the Employee Option Plan 2002) as part of their
remuneration. Options are offered to Directors and executives at the discretion
of the Directors, having regard, among other things, to the length of service
with the Group, the past and potential contribution of the person to the Group
and in some cases, performance. The following options have been issued to
Directors and executives to date:-
+----------+------------------+------------+----------+---------+------------+
|Name | Office | Issue Date | No of |Exercise |Expiry Date |
| | | | Unquoted |Price ($)| |
| | | | Options | | |
+----------+------------------+------------+----------+---------+------------+
|Mr C N |Non-Executive |15 December | 250,000 | 0.3549 |15 December |
|Cowden |Director | 2003 | | | 2006 |
+----------+------------------+------------+----------+---------+------------+
| | |08 December | 500,000 | 0.4355 |08 December |
| | | 2005 | | | 2008 |
+----------+------------------+------------+----------+---------+------------+
|Dr T G |Non-Executive |15 December | 250,000 | 0.3549 |15 December |
|Elder |Director | 2003 | | | 2006 |
+----------+------------------+------------+----------+---------+------------+
| | |08 December | 500,000 | 0.4355 |08 December |
| | | 2005 | | | 2008 |
+----------+------------------+------------+----------+---------+------------+
|Mr G B |Non-Executive |15 December | 250,000 | 0.3549 |15 December |
|Speechly |Director | 2003 | | | 2006 |
+----------+------------------+------------+----------+---------+------------+
|Mr H S |Non-Executive |08 December | 500,000 | 0.4355 |08 December |
|Bottomley |Director | 2005 | | | 2008 |
+----------+------------------+------------+----------+---------+------------+
|Mr M Smith|Chief Financial | 30 August | 250,000 | 0.6566 | 30 August |
| |Officer | 2006 | | | 2009 |
+----------+------------------+------------+----------+---------+------------+
| | | 31 January | 250,000 | 0.7106 | 31 January |
| | | 2007 | | | 2010 |
| | | | | | |
+----------+------------------+------------+----------+---------+------------+
| | |25 June 2007| 500,000 | 1.1636 |25 June 2010|
| | | | | | |
| | | | | | |
+----------+------------------+------------+----------+---------+------------+
|Mr J |General |25 June 2007|1,000,000 | 1.1636 |25 June 2010|
|McLeod |(Operations) | | | | |
| |Manager | | | | |
+----------+------------------+------------+----------+---------+------------+
|Mrs H |Company Secretary |12 November | 100,000 | 0.2310 |12 November |
|Brown | | 2003 | | | 2006 |
+----------+------------------+------------+----------+---------+------------+
| | |04 February | 200,000 | 0.2804 |04 February |
| | | 2005 | | | 2008 |
| | | | | | |
+----------+------------------+------------+----------+---------+------------+
| | | 31 January | 200,000 | 0.7106 | 31 January |
| | | 2007 | | | 2010 |
| | | | | | |
+----------+------------------+------------+----------+---------+------------+
The options issued vest and are exercisable over a period of 12 months, with 50%
vesting and exercisable after 6 months and the other 50% vesting and exercisable
after 12 months of issue. These options have a term of 3 years.
Options Exercised by Directors and executives
The following options were exercised by Directors and executives during the
year:-
+-----------+--------------+------------+-----------+---------+--------------+
|Name | Office | Exercise | No of |Exercise | Expiry Date |
| | | Date | Unquoted |Price ($)| |
| | | | Options | | |
+-----------+--------------+------------+-----------+---------+--------------+
|Mr T G |Non-Executive |11 December | 135,000 | 0.3549 | 15 December |
|Elder |Director | 2006 | | | 2006 |
+-----------+--------------+------------+-----------+---------+--------------+
| | |12 December | 115,000 | 0.3549 | 15 December |
| | | 2006 | | | 2006 |
+-----------+--------------+------------+-----------+---------+--------------+
|Mr G B |Non-Executive | 24 October | 250,000 | 0.3549 | 15 December |
|Speechly |Director | 2006 | | | 2006 |
+-----------+--------------+------------+-----------+---------+--------------+
|Mrs H A |Company |29 May 2007 | 200,000 | 0.2804 | 04 February |
|Brown |Secretary | | | | 2008 |
+-----------+--------------+------------+-----------+---------+--------------+
The options exercised by Dr T Elder during the year were issued on 15 December
2003. The value of the options is determined internally using the Black-Scholes
Pricing Model and are included in remuneration on a proportionate basis from
grant date to vesting date. These options vest and are exercisable over a period
of 12 months, with 50% vesting and exercisable after 6 months (15 June 2004) and
the other 50% vesting and exercisable after 12 months of issue (15 December
2004). These options expire after 3 years. The closing market price at the date
of exercise was $0.7550 and $0.7700 respectively.
The options exercised by Mr G Speechly during the year were issued on 15
December 2003. The value of the options is determined internally using the
Black-Scholes Pricing Model and are included in remuneration on a proportionate
basis from grant date to vesting date. These options vest and are exercisable
over a period of 12 months, with 50% vesting and exercisable after 6 months (15
June 2004) and the other 50% vesting and exercisable after 12 months of issue
(15 December 2004). These options expire after 3 years. There was no trading in
Centamin securities on the ASX on the date of exercise. The closing market price
on 19 October 2006 (the day that the shares were traded on the ASX prior to the
exercise) was $0.67.
The options exercised by H Brown during the year were issued on 04 February
2005. The value of the options is determined internally using the Black-Scholes
Pricing Model and are included in the remuneration on a proportionate basis from
grant date to vesting date. These options vest and are exercisable over a period
of 12 months, with 50% vesting and exercisable after 6 months (04 August 2005)
and the other 50% vesting and exercisable after 12 months of issue (04 February
2006). These options expire after 3 years. The closing market price at the date
of exercise was $1.12.
Value of Director and Executives Options Granted, Exercised and Lapsed During
the Year
The following table shows the value of Director and executives options granted,
exercised and lapsed during the year:-
+----------+--------+---------+---------+---------+------------+-------------+
|Name |Options | Options | Options | Total | Value of |Percentage of|
| |Granted |Exercised| Lapsed |Value of | Options | Total |
| | | | | Options |Included in |Remuneration |
| | | | |Granted, |Remuneration|for the Year |
| | | | |Exercised|for the Year|that Consists|
| | | | | and | | of Options |
| | | | | Lapsed | (1) | |
+----------+--------+---------+---------+ | | |
| |Value at|Value at |Value at | | | |
| | Grant |Exercise | Time of | | | |
| | Date | Date | Lapse | | | |
+----------+--------+---------+---------+---------+------------+-------------+
| | $ | $ | $ | $ | $ | % |
+----------+--------+---------+---------+---------+------------+-------------+
|Mr C | -| -| -| -| 17,053| 36.79|
|Cowden | | | | | | |
+----------+--------+---------+---------+---------+------------+-------------+
|Dr T G | -| 190,475| -| 190,475| 17,053| 24.87|
|Elder | | | | | | |
+----------+--------+---------+---------+---------+------------+-------------+
|Mr G B | -| 167,500| -| 167,500| -| -|
|Speechly | | | | | | |
+----------+--------+---------+---------+---------+------------+-------------+
|Mr H S | -| -| -| -| 17,053| 24.87|
|Bottomley | | | | | | |
+----------+--------+---------+---------+---------+------------+-------------+
|Mr M Smith| 322,773| -| -| 935,000| 121,488| 42.36|
+----------+--------+---------+---------+---------+------------+-------------+
|Mr J | 321,003| -| -|1,075,000| 6,694| 24.32|
|McLeod | | | | | | |
+----------+--------+---------+---------+---------+------------+-------------+
|Mrs H | 101,265| 224,000| -| 398,000| 43,765| 29.71|
|Brown | | | | | | |
+----------+--------+---------+---------+---------+------------+-------------+
(1) The value of options grated during the period is recognised in compensation
over the vesting period of the grant, in accordance with Australian accounting
standards.
DIRECTORS' SHAREHOLDINGS
The relevant interest of each Director in the share capital of the Company shown
in the Register of Directors' Shareholdings as at the date of this report are:-
+----------+----------+-----------+---------------------+--------------+-----------+
|Director |Fully paid|Partly paid|Full paid converting | Executive |Convertible|
| | ordinary | ordinary | cumulative |share options | Notes |
| | shares | shares | non-participating | | |
| | | | preference shares | | |
+----------+----------+-----------+---------------------+--------------+-----------+
|S El-Raghy| *| -| -| -| -|
| |78,235,754| | | | |
+----------+----------+-----------+---------------------+--------------+-----------+
|J El-Raghy| *| -| -| -| -|
| |79,185,754| | | | |
+----------+----------+-----------+---------------------+--------------+-----------+
|C Cowden | 578,626| -| -| 500,000| -|
+----------+----------+-----------+---------------------+--------------+-----------+
|G Speechly| 250,000| -| -| -| -|
+----------+----------+-----------+---------------------+--------------+-----------+
|T Elder | 250,000| -| -| 500,000| -|
+----------+----------+-----------+---------------------+--------------+-----------+
|H | 2,800,000| -| -| 500,000| -|
|Bottomley | | | | | |
+----------+----------+-----------+---------------------+--------------+-----------+
*The total shares held by Mr S El-Raghy and Mr J El-Raghy arise due to them both
being directors/trustees of the following personally related entities:
- Nordana Pty Ltd 4,990,668 shares
- Nordana Pty Ltd 17,595,714 shares
- El-Raghy Kriewaldt Pty Ltd 55,299,372 shares
- S & M El-Raghy 350,000 shares
The balance of 950,000 shares are held by Mr J El-Raghy being a director of
Montana Realty Pty Ltd
Since the end of the previous financial year, no Director of the Company has
received or become entitled to receive any benefit (other than a benefit
included in the aggregate amount of remuneration received or due and receivable
by Directors shown in the consolidated accounts) because of a contract made by
the Company, its controlled entities or a related body corporate with the
Director or with a firm of which the Director is a member, or with an entity in
which the Director has a substantial interest.
MANAGEMENT DISCUSSION & ANALYSIS
The following Management's Discussion and Analysis of the Financial Condition
and Results of Operations ("MD&A") for Centamin Egypt Limited (the "Company" or
"Centamin") should be read in conjunction with the Directors' Report and the
audited Financial Report for the year ended 30 June 2007. The effective date of
this report is 27 September 2007.
The financial information presented in this MD&A has been prepared in accordance
with Australian equivalents to International Financial Reporting Standards
(AIFRS), other mandatory professional reporting requirements and the
Corporations Act 2001.
In addition to these Australian requirements, further information has been
included in the Consolidated Financial Statements for the year ended 30 June
2007 in order to comply with applicable Canadian securities law, as the Company
is listed on the Toronto Stock Exchange.
Additional information relating to the Company, including other public
announcements, is available at www.centamin.com.
All amounts in this MD&A are expressed in Australian dollars unless otherwise
identified.
FORWARD LOOKING STATEMENTS
Some of the statements contained in this MD&A, including those relating to
strategies and other statements, are predictive in nature, and depend upon or
refer to future events or conditions, or include words such as "expects",
"intends", "plans", "anticipates", "believes", "estimates" or similar
expressions that are forward looking statements. Forward looking statements
include, without limitations, the information concerning possible or assumed
further results of operations as set forth herein. These statements are not
historical facts but instead represent only expectations, estimates and
projections regarding future events and are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations generally.
The forward looking statements contained in this MD&A are not guarantees of
future performance and involve certain risks and uncertainties that are
difficult to predict. The future results of the Company may differ materially
from those expressed in the forward looking statements contained in this MD&A
due to, among other factors, the risks and uncertainties inherent in the
business of the Company. The Company does not undertake any obligation to update
or release any revisions to these forward looking statements to reflect events
or circumstances after the date of this MD&A or to reflect the occurrence of
unanticipated events.
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 Project, located in the Eastern Desert of Egypt. The Sukari
Project is at an advanced stage of development, construction commenced July 2007
and first gold production is expected during the fourth quarter of 2008.
A definitive feasibility study (the "DFS") for the development to commercial
production of the Sukari Project was compiled in February 2007 by Roche Process
Engineering Pty Ltd. The DFS provides that the capital cost to develop the
project is estimated at US$216.5 million (including mining fleet and
contingencies but not including the leased mining fleet). According to the DFS,
the Sukari Project reserve will be mined by a single open pit over a 15-year
period. During that time 78 Mt ore grading 1.5 g/t is expected to be mined,
containing 3.7 Moz gold. Over this 15-year mining period the project is expected
to produce on average 200,000 oz of gold annually at an average cash operating
cost of US$290/oz (inclusive of 3% royalty).
The Sukari Project will be the first large-scale modern gold mine to be
developed in Egypt. Centamin's operating experience in Egypt gives it a
significant first-mover advantage in acquiring and developing other gold
projects in the prospective Arabian-Nubian Shield.
CONSOLIDATED INCOME STATEMENTS
Year ended Year ended
30 June 2007 30 June 2006
A$ A$
Revenue 3,317,157 1,140,700
Other income 522,526 -
Foreign exchange gain 11,376,694 2,011,921
Administration expenses (6,420,907) (1,580,463)
Marketing expenses (206,532) (218,531)
Travelling expenses (470,421) (337,132)
Other expenses - (5,665)
Profit before income tax 8,118,517 1,010,830
Tax (expense)/income - -
Net profit for the period 8,118,517 1,010,830
(Loss) per share
- Basic (cents per share) 1.311 0.194
- Diluted (cents per share) 1.293 0.192
Revenue of $3,317,157 comprises interest revenue applicable on the Company's
available cash and working capital balances and term deposit amounts. Interest
revenue is higher than for the period last year due to higher average cash
holdings for the period in 2007 when compared to 2006.
Other income of $522,526 is for a "profit on sale of fixed asset" non-cash
accounting entry applicable on the sale of the exploration drilling rigs sold by
under a sale and purchase agreement in a prior financial year. The accounting
entry has been posted to recognise the accounting profit on sale as a result of
the final progressive purchase payment being received.
Foreign exchange gain is attributable to positive exchange rate movements during
the period and has increased substantially due to the effect of higher average
cash holdings held by the Company combined with the strengthening of the
Canadian Dollar against the United States Dollar.
Administration expenses of $6,420,907 comprise expenditure incurred against
share based payments, communications, consultants, directors' fees, stock
exchange listing fees, share registry fees, employee salaries and general office
administration expenses.
Marketing expenses of $206,532 comprise investor relations activities and
attendance at various trade shows and industry conferences.
Travelling expenses of $470,421 are significant and comprise travel and
accomodation for directors, company executives and consultants for industry and
corporate purposes.
The profit after tax of the consolidated entity for the twelve months ended 30
June 2007 was $8,118,517.
CONSOLIDATED BALANCE SHEETS
Year ended Year ended
30 June 2007 30 June 2006
A$ A$
Total current assets 161,111,954 54,789,830
Total non-current assets 96,597,970 42,458,738
___________________________
Total assets 257,709,924 97,248,568
___________________________
Total current liabilities 7,503,203 1,187,188
Total non-current liabilities 176,741 205,448
___________________________
Total liabilities 7,679,944 1,392,636
___________________________
Net assets 250,029,980 95,855,932
___________________________
Current assets have increased to $161,111,954 at 30 June 2007 as a result of the
equity funds raised during April 2007 when the Company listed on the Toronto
Stock Exchange.
Non-current assets have increased to $96,597,970 at 30 June 2007 as a result of
the expenditure incurred for completion of the definitive feasibility study on
the Sukari Gold Project, ongoing exploration resource drilling at Sukari,
acquisition of Kori Kollo second hand gold plant in Bolivia (South America) and
initial construction activities at Sukari. The Company's accounting policy is to
capitalise expenditure of this nature under the category of Exploration,
Evaluation & Development.
Current liabilities have increased to $7,503,203 at 30 June 2007 due to an
increase in the closing creditors' balance and the acquisition of a second hand
power plant in Turkey. The acquisition price of the second hand power plant was
US$9.75M of which US$3.914M remains to be paid, as at 30 June 2007 as the third
and final payment of this transaction.
Non-current liabilities as at 30 June 2007 have decreased to $176,741.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Year ended Year ended
30 June 2007 30 June 2006
A$ A$
Total equity at beginning of period 95,855,932 47,628,088
Movement in issued equity 141,419,320 46,741,156
Movement in reserves 4,636,211 475,858
Profit for the period 8,118,517 1,010,830
___________________________
Total equity at end of period 250,029,980 95,855,932
___________________________
Issued equity has increased as a result of the equity funds raised during April
2007 when the Company listed on the Toronto Stock Exchange.
Reserves have increased due to the effect of expensing share based option
payments and increase in foreign currency translation reserve arising on
translation of accounts to the presentation currency.
Profit for the year ended 30 June 2007 is analysed under the section
Consolidated Income Statement.
CONSOLIDATED CASH FLOW STATEMENTS
Year ended Year ended
30 June 2007 30 June 2006
A$ A$
Net cash flow from operating activities 1,591,064 942,596
Net cash flow from investing activities (47,699,184) (13,849,305)
Net cash flow from financing activities 141,340,506 46,741,156
___________________________
Net increase in cash and cash equivalents 95,232,386 33,834,447
Cash and cash equivalents at the beginning of 54,493,427 17,984,972
the financial period
Effects of exchange rate changes 11,109,600 2,674,008
___________________________
Cash and cash equivalents at the end of the 160,835,413 54,493,427
financial period
___________________________
The net cash flow from operating activities for the year ended 30 June 2007 of
$1,591,064 is attributable to payments for corporate salary and wage, corporate
administration and compliance related costs offset by interest revenue received.
The net cash flow from investing activities for the year ended 30 June 2007 of
($47,699,184) is attributable to exploration expenditure of $11,096,960,
feasibility study expenditure of $2,398,952, Sukari development expenditure of
$20,138,984 and payments for plant and equipment of $14,064,288. This final
amount is largely payments for the Kori Kollo second hand gold processing plant
in Bolivia (South America) and initial payment for the second hand power plant
in Turkey.
The net cash flow from financing activities for the year ended 30 June 2007 of
$141,340,506 is attributable to equity raised when the Company listed on the
Toronto Stock Exchange and the conversion of employee share options offset by
costs of equity raising.
The overall net increase in cash for the year ended 30 June 2007 of $95,232,386,
excluding the effect of exchange rate movements, results in a closing cash
balance of $160,835,413.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of liquidity as at 30 June 2007 is cash of
$160,835,413 (30 June 2006 - $54,493,427). Of this amount $148,735,428 has been
invested in short term commercial banks bills and term deposits.
The Company's principal sources of cash for the year ended 30 June 2007 were
proceeds from an equity raising, conversion of employee share options, cash
investments and interest revenue received from cash investments.
The following is a summary of the Company's outstanding commitments as at 30
June 2007:
Payments due Total Less than 1 year 1 to 5 years
A$ A$ A$
Turkish Power Plant 4,611,759 4,611,759 -
Employee entitlements 539,927 539,927 -
Creditors 2,351,517 2,351,517 -
_______________________________________________
Total commitments 7,503,203 7,503,203 -
_______________________________________________
The Company's financial commitments are limited to controllable discretionary
spending on work programs at the Sukari Project, the Kori Kollo plant
dismantling site in Bolivia, the Turkish power plant dismantling site in Turkey,
administration expenditure at the Egyptian and Australia office locations and
for general working capital purposes.
The Company's financial obligations in relation to the Kori Kollo and Turkish
plants are limited to the following:
* A US$5.5 million payment, being the final balance owing on the
acquisition cost of the Kori Kollo gold processing plant acquired in the
early part of fiscal year 2007 presently located in Bolivia. This payment
has already been funded through the deposit of the final balance into an
escrowed account. Release of funds to the seller were made upon completion
of the relocation program. See section titled "Subsequent Events".
* A US$9.75 million series of progressive payments relating to the
acquisition of a second hand power generation plant acquired in February
2007 and presently located in Turkey. The first payment of US$1.9 million
was made upon signing of the sale and purchase contract in February 2007,
the second and third payments of US$1.9 million were each due on 30 April
2007 and 13 August 2007, and the final payment is due upon the earlier of
power plant location or the expiry date of a letter of credit established as
security for the payments. This expiry date is 09 October 2007.
On 17 April 2007 the Company announced that it had appointed Barclays Capital,
the investment banking division of Barclays Bank PLC, as Mandated Lead Arranger
to arrange a financing facility of up to US$100M for the Sukari Gold Project.
Other than described above the company has no other off balance sheet
arrangements.
OUTSTANDING SHARE INFORMATION
As at 27 September 2007 the Company had 755,854,232 fully paid ordinary shares
issued and outstanding. The following table sets out the fully paid ordinary
shares issuable under the Employee Share Option Plan and Warrants issued under
the recent TSX listing:
As at 27 September 2007 Number
Shares on Issue 755,854,232
Options issued but not exercised 13,370,000
Warrants issued by not exercised 8,794,691
____________
778,018,923
____________
SEGMENT DISCLOSURE
The Company is engaged in the business of exploration for precious and base
metals only, which is characterised as one business segment only.
SIGNIFICANT ACCOUNTING ESTIMATES
Management is required to make various estimates and judgements in determining
the reported amounts of assets and liabilities, revenues and expenses for each
period presented and in the disclosure of commitments and contingencies. The
significant areas where management uses estimates and judgements in preparing
the consolidated financial statements are the determination of carrying values
and impaired values of exploration assets.
INTERNAL CONTROLS
Disclosure controls and procedures are designed to provide reasonable assurance
that all relevant information is gathered and reported to management, including
the CEO and CFO, on a timely basis so that appropriate decisions can be made
regarding public disclosure. Management, with the participation of the
certifying officers, has evaluated the effectiveness of the design and
operation, as of 30 June 2007, of the Company's disclosure controls and
procedures (as defined by the Canadian Securities Administrators). Based on that
evaluation, the certifying officers have concluded that such disclosure controls
and procedures are effective and designed to ensure that material information
relating to the Company and its subsidiaries is known to them by others within
those entities.
Internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of our financial reporting and compliance
with Canadian generally accepted accounting principles in our financial
statements. Management has evaluated the design of internal control over
financial reporting and has concluded that such internal controls over financial
reporting are designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles in Canada.
In addition, there have been no changes in the Company's internal control over
financial reporting during the year ended 30 June 2007 that have materially
affected, or are reasonably likely to materially affect, its internal control
over financial reporting.
FINANCIAL INSTRUMENTS
At 30 June 2007 the Company has exposure to interest rate risk which is limited
to the floating market rate for cash.
The Company does not have foreign currency risk for non-monetary assets and
liabilities of the Egyptian operations as these are deemed to have a functional
currency of United States dollars. The Company has no significant monetary
foreign currency assets and liabilities apart from Canadian dollar and United
States dollar cash term deposits which are held for the purposes of funding a
portion of the mine construction for the Sukari Project.
The Company currently does not engage in any hedging or derivative transactions
to manage interest rate or foreign currency risks.
RELATED PARTY TRANSACTIONS
The related party transactions for financial year ended 30 June 2007 are
summarised below:
*Mr S El-Raghy and Mr J El-Raghy are also directors and shareholders of
El-Raghy Kriewaldt Pty Ltd ("El-Raghy Kriewaldt"). El-Raghy Kriewaldt
provides 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 and office outgoings paid to El-Raghy Kriewaldt Pty Ltd
during the year were $54,988 (2006: $53,055). Refer to Note 19 of the Notes
to the Financial Statements for commitments for expenditure and leasing
arrangements.
*Mr S El-Raghy provides office premises in Alexandria, Egypt to the
Company. All dealings with Mr S El-Raghy are in the ordinary course of
business and on normal terms and conditions. Rent and office outgoings paid
to Mr S El-Raghy during the year were $19,621 (2006: $20,214).
*A director of the Company, Mr C Cowden has an interest as a director and
controlling shareholder of Cowden Limited, Insurance Brokers. This Company
provides insurance broking services to the Company. All dealings with this
Company are in the ordinary course of business and on normal terms and
conditions. Premiums paid to Cowden Limited during the year were $134,817
(2006: $73,212), of which $20,708 was brokerage (2006: $7,567).
For further details of the related party transactions see Note 31 of the Notes
to Financial Statements.
SUBSEQUENT EVENTS
On 29 August 2007 the Company announced that the dismantling of the Kori Kollo
gold processing plant in Bolivia had been completed and the containerised plant
had been transported from Bolivia to the port of Arica in northern Chile where
it was awaiting ship loading and transportation to Egypt.
Other than as set out above there has not risen in the interval between the end
of the financial year and the date of this report any item, transaction or event
of a material and unusual nature likely in the opinion of the Directors of the
Company to affect significantly the operations of the company, the results of
those operations, or the state of affairs of the company in subsequent financial
years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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