RNS Number : 0350E
Centamin Egypt Limited
23 September 2008
CENTAMIN EGYPT LIMITED
ANNUAL INFORMATION FORM
for the Fiscal Year Ended 30 June 2008
22 September 2008
Unless otherwise indicated, the information in this Annual Information Form is given as of 30 June 2008. All amounts in this Annual
Information Form are expressed in United States dollars unless otherwise indicated. References to "C$" are to Canadian dollars, "A$" are to
Australian dollars, "US$" are to United States dollars, and "�" and "p" are to British pounds sterling.
TABLE OF CONTENTS
Page 1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 3
CENTAMIN EGYPT LIMITED 4
Intercorporate Relationships 4
GENERAL DEVELOPMENT OF THE BUSINESS 4
Overview 4
Competitive Position in Egypt 7
Other Projects * Exploration Properties 7
DESCRIPTION OF THE BUSINESS 8
Sukari Project 8
Property Description and Location 8
Accessibility, Climate, Local Resources and Physiography 8
History of Exploration in the Project Area 8
Geological Setting 9
Deposit Type 9
Mineralization 9
Drilling 9
Sampling and Analysis / Security of Samples 10
Mineral Resources and Mineral Reserves 10
Metallurgy 11
Definitive Feasibility Study 12
Capital Costs 12
Proposed Mining Operations 13
Proposed Processing 13
Infrastructure and Services 14
Operating Costs 15
Environment 16
Social and Landowner Issues 16
Development Plan 16
Financial Evaluation 17
Ownership * the Sukari Concession Agreement 18
RISK FACTORS 20
DIVIDENDS 26
DESCRIPTION OF CAPITAL STRUCTURE 26
Description of Ordinary Shares 26
Constitution of the Company 26
Description of Unlisted Options 28
MARKET FOR SECURITIES 30
DIRECTORS AND OFFICERS 31
Name, Occupation and Security Holding 31
Management 33
Directors 33
Senior Officers 34
Corporate Cease Trade Orders or Bankruptcies 35
Penalties or Sanctions and Personal Bankruptcies 35
Conflicts of Interest 35
Committees of the Board of Directors 36
General 36
Audit Committee 36
Remuneration Committee 36
TABLE OF CONTENTS
(continued)
Page2
LEGAL PROCEEDINGS 38
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS 38
TRANSFER AGENT AND REGISTRAR 38
MATERIAL CONTRACTS 38
INTERESTS OF EXPERTS 38
ADDITIONAL INFORMATION 39
GLOSSARY OF TECHNICAL TERMS 40
SCHEDULE A- AUDIT COMMITTEE CHARTER
cautionary statement regarding forward-looking statements
This Annual Information Form contains "forward-looking information" (also referred to as "forward-looking statements") which may
include, but are not limited to, statements with respect to the future financial or operating performance of Centamin Egypt Limited (the
"Company"), its subsidiaries and its projects (including the Sukari Project), the future price of gold, the estimation of mineral reserves
and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, revenues, margins, costs
of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of
construction, costs and timing of future exploration, the timing for delivery of plant and equipment, requirements for additional capital,
foreign exchange risk, government regulation of mining and exploration operations, environmental risks, reclamation expenses, title disputes
or claims, insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward-looking statements can be identified by the use of
words such as "plans", "hopes", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking information involves and is subject to known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, general business,
economic, competitive, political and social uncertainties; the actual results of current exploration activities and feasibility studies;
assumptions in economic evaluations which prove to be inaccurate; fluctuations in the value of the United States dollar and the Canadian
dollar relative to each other and to the Australian dollar; future prices of gold and other metals; possible variations of ore grade or
recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes or slow downs and other risks
of the mining industry; climatic conditions; political instability, insurrection or war; arbitrary decisions by governmental authorities; delays in obtaining governmental approvals or financing or in
the completion of development or construction activities, as well as those factors discussed in the section entitled "Risk Factors" in this
Annual Information Form. Archaeological sites are located within or near the boundaries of the mine. Discovery of archaeological ruins of
historical value could lead to uncertain delays in the development of the mine at the Sukari Project.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially
from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those
anticipated, estimated or intended. Forward-looking information contained herein is made as of the date of this Annual Information Form and
the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or
results or otherwise. There can be no assurance that forward-looking information or statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such information or statements. Accordingly, readers should not place
undue reliance on forward-looking statements.
centamin egypt limited
Centamin Egypt Limited ("Centamin" or the "Company") was incorporated under the Corporations Law of South Australia as a public company
limited by shares with the name Centamin Limited on 24 March 1970. The Company listed on the Australian Securities Exchange ("ASX") on 08
October 1970. On 10 July 1996, the Company changed to a no liability company and changed its name to Centamin NL. On 27 February 1999, the
Company changed to a company limited by shares and changed its name to Centamin Limited. On 02 March 1999, the Company changed its name to
Centamin Egypt Limited. The Company's head and registered office is at 57 Kishorn Road, Mount Pleasant, Western Australia 6153, Australia.
The Company also maintains an office in Alexandria, Egypt.
Intercorporate Relationships
Pharaoh Gold Mines NL ("Pharaoh Gold" or "PGM"), is the primary, wholly owned subsidiary of the Company. PGM was incorporated in Western
Australia under the Australian Corporations Act as an unlisted public company on 20 October 1993. PGM is a no liability company and its
company name has remained unchanged since incorporation. The address of PGM's registered office is the same as that of the Company's
registered office. The Company's interests in the Sukari Project (as described below) are held by and registered in the name of PGM.
The Company's other fully owned subsidiaries North African Resources NL, Viking Resources Ltd and Centamin Limited, remain dormant.
GENERAL DEVELOPMENT OF THE BUSINESS
Overview
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, with construction having commenced in July 2007 and first gold production expected in the second quarter of 2009.
In 1995, PGM, a company at the time controlled by Sami El-Raghy (the current Chairman of Centamin) and others, entered into an
agreement, the Concession Agreement, with the Egyptian Geological Survey and Mining Authority ("EGSMA") (now the Egyptian Mineral Resources
Authority ("EMRA")) and the Arab Republic of Egypt ("ARE"), to explore for and develop gold and associated minerals in three concession
areas located in the Eastern Desert of Egypt. In January 1999, the Company acquired 99.99% of the issued and outstanding shares of PGM and
in May 2003, acquired the outstanding 0.01%.
The Concession Agreement was declared into Egyptian Law 222 for 1994 and came into effect on 13 June 1995. See "Description of the
Business - Sukari Project - Ownership - the Sukari Concession Agreement".
The Company then commenced the exploration drilling and mining studies required to complete a feasibility submission in accordance with
the Concession Agreement. PGM completed the feasibility submission for the Sukari Project and this submission was accepted by EGSMA on 09
November 2001 and a commercial discovery was declared, in accordance with the Concession Agreement. As a result, the Concession Agreement
was converted from exploration to exploitation status.
In April 2003, the Company's field operations in Egypt were suspended when security passes for its staff and contractors, required under
Egyptian law, were not renewed by EGSMA. The Company was not advised formally of any reasons for the delay in renewing the security passes.
The Company commenced arbitration and legal proceedings in respect of this issue, which was subsequently settled through negotiations in
April 2005, following structural changes within EGSMA. No changes were made to the terms of the Concession Agreement as a result of these
actions. The Company re-commenced work at the Sukari Project in May 2005 following the awarding of the Exploitation Lease.
In April 2006, the Company raised �20.6 million at a price of 27.5p (pence), through a private placement of shares, to secure long
lead-time items, to cover pre-mining costs for the development of the Sukari Project and for general working capital purposes.
In October 2006, PGM entered into an agreement to acquire the Kori Kollo gold processing plant located in Bolivia from a subsidiary of
Newmont Mining Corporation. The plant was built and commissioned in 1993 and operated for 10 years until completion of open pit mining in
2003. The plant arrived in Egypt in October 2007.
In February 2007, the Company completed a definitive feasibility study (the "DFS") for the Sukari Project. The DFS concluded that
development of a 4Mtpa operation, producing over 200,000 oz per year, is economically robust. See "Description of the Business - Sukari
Project - Definitive Feasibility Study".
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 capex. 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. The power plant arrived in Egypt in October 2007.
In April 2007, the Company placed approximately 175 million new shares at C$0.86 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 listing on the Toronto Stock
Exchange ("TSX") and the shares began trading on the TSX on 05 April 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.
On 23 November 2007, the Company announced that it had sold on a private basis an aggregate of 112,000,000 special warrants at a price
of C$1.20 per special warrant for aggregate gross proceeds of C$134,400,000, which includes the exercise in full by the Underwriters of the
Underwriters' option. On 24 December 2007, the special warrants automatically converted to fully paid ordinary shares and the fully paid
ordinary shares were delivered on 28 December 2007. The net proceeds of this equity financing were to be applied to fund the continued
development of the Sukari gold project, underground development, other exploration and general corporate purposes.
Sukari Project
Information in this section arising subsequent to the date of the Technical Report, if any, regarding the development of the Sukari
Project is provided by Centamin management.
Overview
The Sukari Project is located in the Eastern Desert region of Egypt, about 700 km south of Cairo and 30 km south-west of the Red Sea
coastal town of Marsa Alam, as shown in Figure 1 below. As at 30 June 2008, the Company had a total of 210 employees.
Figure 1: Location of the Sukari Project
http://www.rns-pdf.londonstockexchange.com/rns/0350E_-2008-9-22.pdf The mineral reserve estimate as at February 2007 for the
Sukari Project is detailed below:
Proven Probable Total Mineral Reserve
Mt g/t Mt g/t Mt g/t Moz
34.1 1.5 44.2 1.5 78.3 1.5 3.7
The mineral resource estimate as at July 2008 for the Sukari Project is detailed below (at a 0.5g/t cut-off):
Measured Indicated Total Inferred
Measured + Indicated
Cut-off Tonnes Grade Tonnes Grade Tonnes Grade Gold Tonnes Grade Gold
g/t Au (Mt) (g/t Au (Mt) (g/t Au) (Mt) (g/t Au) (Moz) (Mt) (g/t Au) (Moz)
0.5 66.37 1.46 111.04 1.52 177.41 1.50 8.56 59.6 1.7 3.2
0.7 47.94 1.79 81.10 1.87 129.04 1.84 7.64 43.1 2.1 2.9
1 31.23 2.31 53.84 2.39 85.07 2.36 6.45 29.0 2.7 2.5
Note to Table: Figures in table may not add correctly due to rounding
The measured and indicated amounts include both proven and probable reserves.
The resources have been calculated by Hellman & Schofield Pty Ltd using Multiple Indicator Kriging with block support adjustment. The
resources are presented in accordance with the 2004 Australian Code for the Reporting of Mineral Resources and Ore Reserves ("JORC Code")
which is equivalent to National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the CIM Definition
Standards on Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Standards (the
"CIM Standards").
The reserves have been estimated by AMC Consultants Pty Ltd, based upon the previous mineral resource estimate prepared by Hellman &
Schofield Pty Ltd in November 2006. AMC concludes that a mineral reserve estimate based on the November 2006 mineral resource estimate could
be expected to be conservative relative to any new reserve estimate based upon the July 2008 resource estimate. The resource estimate is
based on data coming from 1,100 diamond and reverse circulation ("RC") drill holes combining to give approximately 280,000 m of drilling.
The Company has eight drill rigs contracted at the Sukari Project and is advancing the drilling northwards. The orebody is not closed off
leaving the opportunity for increases in the resources.
Metallurgical testwork and process design and engineering for development of the Sukari Project were completed for Centamin in September
2006. In October 2006, Centamin agreed to acquire the Kori Kollo CIL plant from a subsidiary of Newmont Mining Corporation. The Kori Kollo
plant was located in Bolivia and was built and commissioned by Minproc Engineers in 1993. The plant operated for ten years and on-site
inspections by Centamin representatives have shown the key plant components to be in excellent condition due to the site altitude providing
a non-corrosive environment and the high standard of maintenance practices during operation.
Dismantling operations at Kori Kollo commenced in February 2007. The plant arrived in Egypt in October 2007.
The DFS for development of the Sukari Project was compiled in February 2007 by Roche Process Engineering Pty Ltd. The capital cost to
develop the project has been estimated by Roche and Centamin to be US$216.5 million (including mining fleet and contingencies). According to
the DFS, the Sukari Project reserve will be mined by open pit methods over a 15-year period. During that time 78 Mt ore @ 1.5g/t Au is
expected to be mined, producing 3.7 Moz gold. Over this 15-year mining period the project is expected to produce an average of 200,000 oz
gold annually at a cash cost of US$290/oz. The Company is of the opinion that due to increased commodities prices and currency movements
since finalisation of the DFS that the capital estimate is at risk by +15%. Average cash operating costs have been revalidated in June 2008
due the higher cost of inputs (steel, fuel, consumables etc), and are forecast to be approximately US$365/oz.
Competitive Position in Egypt
Although the gold mining industry in Egypt is in its infancy, with very few other foreign precious metal exploration or development
companies active in Egypt, the industry globally is very competitive. So although the Company has a well established business in Egypt it is
likely to face strong competition from other mining companies in connection with the acquisition of additional mineral properties as well as
for the recruitment and retention of qualified employees and other personnel.
Gold producers in Egypt operate under similar competitive conditions to those in other parts of the world, all of which operate in a
commodity business with little to no ability to influence the price of its product, gold dore bars. Gold dore bars are sent to an accredited
gold refiner for smelting and refining into an London Metal Exchange grade gold bar. Sale of gold is thereafter via the standard industry
practice of delivery from this gold account into either a pre-arranged hedging contract or a spot market sale contract.
Other Projects - Exploration Properties
The Company also holds a royalty interest in the Nelson Fleet gold project at St. Ives in Western Australia through its subsidiary,
Viking Resources Limited. The Company has not been informed by the operator of the project, St Ives Gold Mining Co Pty Ltd, a subsidiary of
Gold Fields Ltd, of any mining or near term intention to mine at the tenement.
DESCRIPTION OF THE BUSINESS
SUKARI PROJECT
The following is a description of the Sukari Project in which Centamin has a 100% interest. The information in this section, other than
the drilling plan shown in Figure 2, is based on the technical report titled "Form 43-101F1 Technical Report - Sukari Gold Project Egypt"
(the "Technical Report") dated 02 March 2007 authored by Nic Johnson of Hellman & Schofield Pty Ltd, Paul Newling at Roche Process
Engineering Pty Ltd, Chris Orr at George, Orr and Associates (Australia) Pty Ltd, Dave Morgan at Knight Piold Pty Ltd, Martin Staples of AMC
Consultants Pty Ltd and Geoff Motteram of Geomett Pty Ltd, each of whom is a "Qualified Person" as defined in National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101"). The Technical Report has been filed with the securities regulatory authorities
in each of the provinces of Canada other than Quec. Information in this section arising subsequent to the date of the Technical Report, if
any, regarding the development of the Sukari Project is provided by Centamin management. Portions of the following information are based on assumptions, qualifications and procedures which are not
fully described herein. Reference should be made to the full text of the Technical Report which is available for review on the System for
Electronic Document Analysis and Retrieval (SEDAR) located at www.sedar.com.
Property Description and Location
The Sukari Project is located in the Eastern Desert region of Egypt, about 700 km south of Cairo and 30 km south-west of the Red Sea
coastal resort town of Marsa Alam. The project area is defined by the Exploitation Lease, which covers an area of 160 km2, surrounding the
orebody.
Accessibility, Climate, Local Resources and Physiography
The project area is accessible by means of a good quality bitumen road connecting Marsa Alam and Idfu that passes within 8 km of the
project. Thereafter a gravel road leads into the project area.
The town of Marsa Alam is the main supply point. It is one of the fastest growing holiday resort destinations in Egypt, popular with
wind surfers and divers. It has an international airport with a 3,000 m runway that can accommodate Boeing 737, 757 and 767 jets and similar
aircraft.
During the winter months (October to March) Marsa Alam's average temperature ranges from 18 to 35 degrees Celsius. During the summer
months (April to September) Marsa Alam's temperature ranges from 20 to 45 degrees Celsius. The project is in an area of negligible rainfall
and hence sparse vegetation.
The Sukari Project is located at the southern end of a range of steep granite hills (with a height of up to 200 m above the wadi floor)
and the surrounding wadi.
History of Exploration in the Project Area
Gold was mined at Sukari in Pharaonic and Roman times. Numerous small pits are located over about two kilometers strike on Sukari Ridge.
There are also small pits in wadi colluvium along the flanks of the ridge, most notably in Wadi Pharaoh to the east of the northern part of
the ridge. It is believed that about 32,000 oz of gold may have been mined historically.
The old Sukari Mine was established on an outcropping quartz vein (the "Sukari Main Lode"). In Pharaonic times, mining of this vein
extended to about 50 m from surface and, intermittently, along about 200 m strike, with stopes about one meter wide. Small-scale mining was
re-established in 1912 by British concerns but appears to have ceased at the outbreak of World War I.
In 1936, a renewed effort by government authorities to re-establish Egypt's gold mining industry saw Sukari selected as the first mine
to be brought back into production. Production commenced in August 1937 and continued intermittently until February 1951. Recorded gold
production for this 14 year period was approximately 153,300 oz. Ore was sourced from the Sukari Main Lode, with the ancient underlay shaft
being refurbished and extended to about 185 m depth (on the underlay). An extraction level was established at 110 m depth and stoping above
this level extended over about 100 m strike length. Several subsidiary adits and underlay shafts access stopes along the length of the mined
strike. Ore below the 110 m level has also been stoped over about 50 m strike length. Stopes are generally two to three metres wide.
In 1975-77 an Egyptian-Soviet joint research team investigated gold resources at Sukari. Exploration included surface sampling,
trenching and drilling of five diamond core holes.
In 1995, PGM, EGSMA (now EMRA) and ARE entered into the Concession Agreement which grants PGM and EMRA the right to explore, develop,
mine and sell gold and associated minerals at the Sukari Project.
PGM commenced evaluation drilling at Sukari in April 1997.
Geological Setting
The rock sequence at the Sukari Project comprises part of the Neoproterozoic Arabian-Nubian Shield, one of a number of areas of African
continental crust that accreted and stabilized during the Pan-African Orogeny. At a district scale, the host sequence at the Sukari Project
comprises a NNE striking mange of predominantly calc-alkaline igneous rocks and metasediments representing an accreted island arc or arcs.
Very weak oxidation is generally to a depth of 10 m to 20 m and there is also weak oxidation to 50 m plus down narrow shear zones and
faults. The bulk of the resource is in fresh unoxidized rock.
Deposit Type
The Sukari Project gold deposit is a large, sheeted vein-type and brittle-ductile shear zone hosted gold deposit developed in a late to
post-orogenic granitoid intrusive complex.
The Sukari deposit is subdivided into four geologic domains: Pharaoh, Gazelle, Ra and Amun and each contain three main styles of
veining: sheeted extension vein arrays, en echelon arrays of extension veins within variably dipping brittle-ductile shear zones, and
through-going shear extension veins and laminated reefs.
Mineralization
Gold mineralization is hosted exclusively by a granitoid body of approximately granodiorite-tonalite composition referred to as the
Sukari Porphyry.
Gold mineralization is intimately related dominantly to sulphides; pyrite is the most abundant sulphide, followed by arsenopyrite. High
gold grades are associated with increased arsenopyrite concentration. The sulphides occur as fine grained, subhedral disseminations in
altered porphyry and as blebby sub- to euhedral crystals and finer disseminations in quartz veins, fractures and breccias. Visible gold
occurs as anhedral grains in milky white extensional and breccia quartz veins and as intergrowths with pyrite and arsenopyrite, commonly in
narrow shear veins at quartz vein margins and margins to clasts in hydraulic quartz vein breccias.
The deposit has a strike length of approximately 2,300 metres, and ranges in thickness from 100 metres to approximately 600 metres.
Mineralization has been intersected down dip to depths of 750 m below the wadi surface level.
Drilling
Drilling by PGM commenced in April 1997 and was ongoing at the time of the drafting of the Technical Report. PGM's drilling has been by
diamond core, using two Atlas Copco Craelius 252 rigs to produce 35.3 mm diameter core. These rigs are skid-mounted electric-hydraulic
drills normally used for drilling in underground mines.
In August 2000, the drilling effort was augmented by a track-mounted Atlas Copco 262 diesel hydraulic rig. This rig drills 47 mm
diameter core. During the first half of 2002 the drilling capacity at Sukari was significantly enhanced with the introduction of a drilling
contractor utilising larger, more flexible, drilling rigs; two CS1000 rigs and two CS14 rigs configured for HQ and NQ core drilling only and
two multi-purpose diamond and RC capable drilling rigs.
Drilling has been conducted on 25 m spaced sections, oriented grid east-west, in the Amun, Ra and Gazelle zones. Drilling is primarily
spaced at 50 m to 100 m sections in the southern portion of the Pharaoh zone. Drill coverage is being extended northwards into the Pharaoh
zone.
Sampling and Analysis / Security of Samples
Diamond and RC drill holes are sampled at one metre intervals. Sample recoveries of the diamond and RC drilling are 95% and 86%,
respectively. All drill samples are prepared at the Sukari sample preparation facility. Gold analysis has been conducted by independent
laboratories (Minesite Reference Laboratories, Perth and Ultratrace Analytical Laboratories, Perth (ISO 17025 accredited)). Quality
assurance and quality control has been monitored by incorporating appropriate certified standards, blanks, check samples and field
duplicates into the sampling and analysis process. The analysis process has also been monitored according to routine repeat assaying and
fire assay checks of aqua regia original assaying.
Mineral Resources and Mineral Reserves
Mineral resources at Sukari Project, as at July 2008, are shown in the following table. The resources are presented in accordance with
the 2004 Australian Code for the Reporting of Mineral Resources and Ore Reserves ("JORC Code") which provides an equivalent presentation to
NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Standards (the "CIM Standards").
Measured Indicated Total Inferred
Measured + Indicated
Cut-off Tonnes Grade Tonnes Grade Tonnes Grade Gold Tonnes Grade Gold
g/t Au (Mt) (g/t Au (Mt) (g/t Au) (Mt) (g/t Au) (Moz) (Mt) (g/t Au) (Moz)
0.5 66.37 1.46 111.04 1.52 177.41 1.50 8.56 59.6 1.7 3.2
0.7 47.94 1.79 81.10 1.87 129.04 1.84 7.64 43.1 2.1 2.9
1 31.23 2.31 53.84 2.39 85.07 2.36 6.45 29.0 2.7 2.5
Note to Table: Figures in table may not add correctly due to rounding
The measured and indicated amounts include both proven and probable reserves.
The resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging ("MIK") with block support correction.
Typically, measured resources lie in areas where drilling is available at a nominal 25 x 25 metre spacing, indicated resources occur in
areas drilled at approximately 25 x 50 metre spacing and inferred resources exist in areas of broader spaced drilling. The resource model
extends from 9700mN to 12200mN and to an approximate depth of 350mRL (approximately a maximum depth of 950 metres below the crest of the
Sukari hill) and is based on all assay data available at 30 June 2008. The resource dataset comprises of 137,026 two metre down hole
composites and surface rock chip samples.
Centamin has quality assurance / quality control ("QAQC") systems in place at Sukari to monitor the precision and accuracy of all
sampling and assaying. Some conclusions from the analysis of the available QAQC data are:
* Sample recoveries of the diamond and RC drilling are very good, being 95% and 86%, respectively.
* Repeat analyses have continued to confirm that the precision of sampling and assaying is within acceptable limits for sampling of
gold deposits.
* Assaying by an alternative method has continued to confirm that the principal assay method (aqua regia) is accurate.
Exploration drilling to date has solely focused on the Sukari porphyry, and initially around the Amun Zone, where the bulk of the
mineral resource is located. Work has subsequently continued north through the Ra, Gazelle and into the northern Pharaoh Zones. Drilling
shows there is potential to increase the Sukari resource base down dip of current mineralization in the Amun Zone, and along strike to the
north in the Ra and Pharaoh zones, in near surface and deeper environments.
The Company has 8 drill rigs at the Sukari Project and is advancing the drilling northwards as well as continuing to investigate the
depth extensions. The orebody is not closed off. Approximately 26% of estimated resources are in the Inferred category due to irregular
drill hole spacing, particularly in the Pharaoh Zone. Infill drilling to a regular spacing on 25 m spaced sections is expected to upgrade
some of this material to higher confidence categories and allow its inclusion in mineral reserve estimates.
The table below details the Sukari ore reserves.
Proven Probable Total Mineral Reserve
Mt g/t Mt g/t Mt g/t Moz
Total 34.1 1.5 44.2 1.5 78.3 1.5 3.7
The reserves have been estimated by AMC Consultants Pty Ltd ("AMC"), based upon the previous mineral resource estimate prepared by
Hellman & Schofield Pty Ltd in November 2006. It is AMC's understanding that the major changes to the July 2008 resource estimate relate to
additional drilling to the north and below the area considered in AMC's mining study. Some infill drilling was carried out in the area
considered in the mineral reserve estimate. This drilling tended to confirm the resource and added some resources in less well drilled
areas. Globally the effect of the new model was to raise the metal contained in the resource to the south of 11,300mN and to raise the
confidence in the resource estimate. AMC concludes that a mineral reserve estimate based on the November 2006 mineral resource estimate
could be expected to be conservative relative to any new reserve estimate based upon the July 2008 resource estimate.
The mineral reserves are contained within designed and scheduled open pits which were based upon the results of pit optimization and
Measured and Indicated Resources. The Inferred Resources which occur within the pit design are treated as waste in the production schedule
and project economic evaluation.
Metallurgy
Mineralogical investigation has shown that Sukari is a competent, siliceous ore, consisting mainly of quartz. Gold occurs as fine
inclusions in pyrite or arsenopyrite, or enclosed in sulphides. Comminution test results show that the ore is competent, abrasive, and hard
to grind to its final product size. The results are highly consistent, and indicate a deposit with unusually low variation in its hardness
and abrasivity.
There are five different ore type classifications, M1 through to M5, described in the mine model. These classifications are based on
degree of oxidation where M5 is completely oxidized and M1 comprises sulphide, unoxidized ore. Approximately 90% of the deposit has been
classified as M1 or M2. The following table outlines the proposed circuit and actual recovery predictions for each ore mix.
Ore Feed Circuit Type Recovery Prediction
Oxidized - M5 Direct Cyanidation/CIL 90.8%
Mixed - M2 to M4 Flotation with Concentrate Regrind and 87.4%
CIL Leach plus Float Tail CIL Leach
Sulphide M1 Flotation with Concentrate Regrind and 89.7%
CIL Leach
Definitive Feasibility Study ("DFS")
In October 2006 Centamin agreed to acquire the Kori Kollo CIL plant from a subsidiary of Newmont Mining Corporation. The Kori Kollo
plant was located in Bolivia and was built and commissioned by Minproc Engineers in 1993. The plant operated for ten years and on-site
inspections by Centamin representatives have shown the key plant components to be in excellent condition due to the site altitude providing
a non-corrosive environment and the high standard of maintenance practices during operation. The plant is ideally suited to the Sukari
Project and key equipment sizing is well matched to the 4 Mtpa processing rate currently envisaged for the Sukari Project.
A definitive feasibility study for development of the Sukari Project was compiled in February 2007 by Roche Process Engineering Pty Ltd
("Roche"). This study used, among other things, the Kori Kollo mill and mine design and schedules by AMC Consultants Pty Ltd. According to
the DFS, the Sukari Project reserve will be mined by open pit methods over a 15-year period. During that time 78 Mt ore @ 1.5 g/t Au is
expected to be mined, producing 3.7 Moz gold. Over the 15-year mining period the project is expected to produce an average of 200,000 oz
gold annually at a cash operating cost of US$290/oz. The Company is of the opinion that due to increased commodities prices and currency
movements since finalisation of the DFS that the capital estimate is at risk by 15%. Average cash operating costs have also been revalidated
due the higher cost of consumables, and are forecast to be approximately US$365/oz.
Approximately 5 Mt of ore will be mined and 4 Mt of ore will be processed annually such that a low-grade stockpile will be developed.
According to current schedules, this stockpile will be processed after mining has ceased, extending the operating life of the project for a
further six years.
Unless otherwise stated, the following information is based on the information contained within the DFS.
Capital Costs
The estimated capital cost to develop the Sukari Project is summarized in the following table. The estimate has an accuracy range of +/-
15%.
Capital Cost Element Total CapitalCost
Estimate
(US$)
Mine - (Workshop, Wash-down bay & Misc only) 1,263,000
Process Plant 34,037,000
Tailings Management 4,921,000
On Site Infrastructure 33,854,000
Off Site Infrastructure 14,965,000
Electrical 4,974,000
Miscellaneous - Mobile Equipment, Spares & First Fill 11,111,000
Indirects - EPCM, Kori Kollo & Construction Indirects 31,723,000
Contingency (at 10%) 13,685,000
Sub-total - Plant & Infrastructure (rounded) 150,533,000
Mine Equipment Fleet Purchase 48,800,000
Owners Cost including mine pre-stripping 16,500,000
Finance & Administration 700,000
TOTAL 216,533,000
Note: The capital cost for the mine equipment is to the end of year 2 only and the remaining capital required for the mine equipment is
to be funded from the net cashflow.
The mine cost represented above covers the mine vehicle workshop, truck washdown bay and miscellaneous items only. All other mining
costs are excluded. The capital estimate covers the design and construction of the process plant, together with on site and off site
infrastructure requirements, including power and water supply, and support services. The estimate excludes owner's costs, owner's
contingency, escalation, exchange rate variation, working capital, sustaining capital, financing costs, rehabilitation and closure costs.
The capital cost estimate includes the cost of dismantling, shipping and refurbishing the Kori Kollo plant; it does not include the
acquisition cost of the plant.
Proposed Mining Operations
The Sukari Project has been scheduled for open pit mining over a 15-year period. During that time 78 Mt ore @ 1.5 g/t Au is expected to
be mined, producing 3.7 Moz gold. A further 374 Mt waste material is also expected to be mined giving a waste to ore strip ratio of 4.8:1.
Ore and waste will be mined using conventional open pit mining methods. The operation is planned to utilize selective mining techniques
to separate ore and waste. Provision has been made for drilling and blasting all primary and oxide materials. Ore will be hauled to the run
of mine pad next to the processing plant and either direct tipped to the crusher or stockpiled for future reclaim at the 4 Mtpa process
plant throughput rate.
Mining will be progressed at an increased rate compared to processing; approximately 5 Mt of ore is expected to be mined and 4 Mt of ore
will be processed annually. Operating at an increased mining rate allows the cutoff grade for feed to the plant (referred to as "cutover"
grade) to be increased in the early years of the schedule. This in turn increases the metal output and project revenue in these early years,
thus increasing the discounted operating surplus cashflow. According to current schedules, the low-grade stockpile produced as a result of
applying a cutover grade, will be processed after mining has ceased, extending the 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.
It is proposed that Centamin will own and operate its mining fleet. The production fleet will be based on 380 t class excavators and 150
t class rigid body trucks. At full production, three production fleets, each comprising a single excavator and sharing a maximum of 21
trucks, will be required. The capital cost of the initial mining fleet has been estimated by AMC at US$48.8 million.
Proposed Processing
The proposed process route entails:
* crushing;
* stockpiling crushed ore;
* grinding;
* flotation of a (bulk sulphide) concentrate containing the precious metals;
* thickening of the concentrate;
* fine milling of the concentrate;
* leaching the precious metals from the concentrate in a dilute cyanide solution;
* adsorbing the precious metals onto activated carbon;
* stripping the precious metals from the carbon;
* recovering the precious metals as gold dor 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 dor and
* placing these tailings in the tailings storage facility.
Process plant unit operations and flows are depicted in Figure 2.
Figure 2: Sukari Project - Process Plant Unit Operations and Flows
http://www.rns-pdf.londonstockexchange.com/rns/0350E_1-2008-9-22.pdf Infrastructure and Services
Given the remoteness of the Sukari Project, additional services and infrastructure suitable to support a mining operation of the
proposed magnitude are required. The proposed layout of the project infrastructure is shown in Figure 3.
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�/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 construction camp facility for up to 700 employees has been completed at the Sukari Project.
Figure 3: Sukari Project - Proposed Layout
http://www.rns-pdf.londonstockexchange.com/rns/0350E_2-2008-9-22.pdf
Operating Costs
Processing cost estimates developed by Roche were used with prices obtained in the last calendar quarter of 2006. For the three ore
types at the Sukari Project the costs associated with processing of ore were:
* Oxide ore - US$4.54/t ore
* Mixed ore - US$6.54/t ore
* Sulphide ore - US$5.28/t ore
These estimates include all site related operating costs associated with processing of ore to produce gold dorbars to an accuracy of +/-
15%.
The cash operating costs related to the remaining production process are summarized below:
* Mining - US$5.33/t ore
* Finance & Administration - US$0.95/t ore
* DorRefining & Transport - US$0.05/t ore
* Egyptian Government Royalty - US$0.76/t ore
Based on these costs the average cash operating cost is expected to be approximately:
* US$290/oz over the 15-year mining life of the operation; and
* US$298/oz over the 22-year processing life of the operation.
The Company is of the opinion that due to increased commodities prices and currency movements since finalisation of the DFS that the
capital estimate is at risk by 15%. Average cash operating costs have been revalidated in June 2008 due to the higher cost of inputs (steel,
fuel, consumables etc), and are forecast to be approximately US$365/oz.
Environment
The Sukari Project is located in stark desert with little or no vegetation. There is no permanent population in the immediate area and
it has been visited only by people tending nomadic livestock herds in recent times. The greatest perceived potential impact that has been
identified is seepage of heavy metals into the water table. Engineering design has addressed this in order to mitigate this potential risk.
Social and Landowner Issues
It is expected that this project will have a significant positive effect on the local economy, and that of nearby towns. It is
considered that there will be no negative impact on the local tourism industry.
Development Plan
Dismantling operations at Kori Kollo commenced in February 2007 and was completed in August 2007. The plant was trucked to the port of
Arica in Chile in August 2007. The plant has since been shipped to Alexandria in Egypt and trucked to the Sukari Project where it is
currently being refurbished.
The construction strategy required by PGM is that the plant will be engineered by a non-Egyptian company with similar gold plant
experience. Both international and Egyptian sub-contractors will then bid for and construct various packages. Infrastructure will also be
broken into several work packages and managed by a local Egyptian engineering company. PGM will maintain an owner's team to oversee all
these activities.
PGM has already established the nucleus of an "owner's team" to oversee the project. PGM is in the process of hiring additional staff to
ensure that its in-house skills include all aspects of project management, operations management and financial management, as well as
sufficient technical capability to approve engineering performed by consultants and contractors.
An overall schedule has been developed covering all phases of the project. Current key dates are listed below:
* Project Go-Ahead Decision Feb 2007 (Completed)
* Kori Kollo Plant Arrives Q4 2007 (Completed)
Egypt
* 28MW Power Station Arrives Q4 2007 (Completed)
* Project Finance Q4 2007 (Completed)
* Plant site Civil Works Q2 2008 (Completed)
* Seawater Pipeline Q4 2008 (Commenced)
* Tailings Storage Facility Q4 2008 (Commenced)
* Mining Pre-strip Q4 2008
* Commissioning and Q2 2009
Production
The schedule assumes that all approvals are in place upon project approval. Project development, mining and processing are subject to
various permitting and consent requirements and, accordingly, the Company will process applications for permits and consents related to land
access for the seawater pipeline route, transporting, storing and using hazardous materials and other environmental approvals.
As a result of the capital raising undertaken in November 2007, the Sukari Gold Project is 100% fully funded through to gold production
currently forecast to be the second quarter of 2009. As a result the Company no longer needs to pursue debt financing, has no debt, no
hedging and at 30 June 2008, had a cash balance of US$182M.
Financial Evaluation
The projections, forecasts, and estimates included in this section (including those with respect to net present value and production
targets) constitute forward-looking information. Readers are urged to review the section titled "Cautionary Statement Regarding
Forward-Looking Information" and to not place undue reliance on such forward-looking information. Such information has also not been
prepared with a view toward compliance with the guidelines established by the Canadian Institute of Chartered Accountants for the
preparation and presentation of prospective financial information.
A financial model was prepared and reviewed for the purposes of evaluating the economics of the Sukari Project during the feasibility
study process in early 2007. The financial inputs have been calculated from the capital, mining, plant and administrative cost data
generated through the feasibility study process, a cost review and the following assumptions:
* Gold price of US$600/oz
* No hedging of the gold price has been assumed within the analysis
* Tax free status as set out in the Concession Agreement (see description of Concession Agreement terms in the following section)
* Egyptian government royalty of 3.0%
* No escalation has been applied to operating costs or to revenue
* Mine closure costs of US$5.0 million
Based on these inputs the Sukari Project is financially robust; generating an internal rate of return of 22.3% and a net present value
(at an 8% discount rate) of US$248.4 million.
Sensitivity analysis has been conducted according to the following scenarios:
* Gold Price +/- 5%, +/- 10%
* Operating Costs +/- 5%, +/- 10%
* Capital Costs +/- 5%, +/- 10%
The effect of these scenarios on the internal rate of return (IRR) and net present value (NPV) are presented in the following table.
Sensitivity Area Percentage Values Percentage Change
Change NPV IRR NPV IRR
(US$ (%) (%) (%)
M)
Gold Price -10% 155.8 17.2 -37.3% -22.9%
-5% 202.1 19.7 -18.6% -11.7%
0% 248.4 22.3 0.0% 0.0%
5% 294.6 24.6 18.6% 10.3%
10% 340.9 27.1 37.2% 21.5%
Total Capital Cost -10% 269.8 24.7 8.6% 10.8%
-5% 259.1 23.4 4.3% 4.9%
0% 248.4 22.3 0.0% 0.0%
5% 237.6 21.1 -4.3% -5.4%
10% 226.8 20.1 -8.7% -9.9%
Total Operating -10% 294.6 24.8 18.6% 11.2%
-5% 271.4 23.5 9.3% 5.4%
0% 248.4 22.3 0.0% 0.0%
5% 225.2 20.9 -9.3% -6.3%
10% 202.1 19.6 -18.6% -12.1%
The sensitivity analysis indicates that the project is most sensitive to movements in revenue which are equally influenced by gold
price, grade and recovery. The project is less sensitive to movements in capital and operating costs. Movements in capital and operating
costs are predicted to have a similar effect on project economics.
This financial evaluation is on a project basis and does not reflect PGM's position. The project is a joint venture between the Egyptian
government and PGM, hence cashflow to PGM requires adjustment to match the Concession Agreement.
Ownership - the Sukari Concession Agreement
PGM, EGSMA (now EMRA) and the Arab Republic of Egypt entered into the Concession Agreement dated 29 January 1995, granting PGM and EMRA
the right to explore, develop, mine and sell gold and associated minerals in specific concession areas located in the Eastern Desert of
Egypt identified in the Concession Agreement. The Concession Agreement came into effect under Egyptian law on 13 June 1995.
The initial term of the Concession Agreement was for one year and was extended by the parties for three two-year periods in accordance
with its terms.
In accordance with the terms of the Concession Agreement, PGM undertook a feasibility study to support its application to EMRA for a
"Commercial Discovery" (within the meaning of the Concession Agreement) with respect to the Sukari Project. On 09 November 2001, EMRA
notified PGM that the feasibility submission had demonstrated that a Commercial Discovery had been made at the Sukari Project. As a result,
the Concession Agreement was converted from exploration to exploitation status and PGM, together with EMRA, were granted an Exploitation
Lease over 160 km2 surrounding the Sukari Project site (Figure 4 below). The Exploitation Lease was signed by PGM, EMRA and the Egyptian
Minister of Petroleum and gives tenure for a period of 30 years, commencing 24 May 2005 and extendable by PGM for an additional 30 years
upon PGM providing reasonable commercial justification. The Exploitation Lease will lapse if production of gold is not achieved within 5
years of the signing date.
Figure 4: Exploitation Lease Area
http://www.rns-pdf.londonstockexchange.com/rns/0350E_3-2008-9-22.pdf Following demonstration of a Commercial Discovery, PGM
and EMRA were required to establish an operating company owned 50% by each party (the "Operating Company"). The Operating Company, named
Sukari Gold Mining Company, was incorporated under the laws of Egypt on 27 March 2006. The Operating Company was formed to conduct
exploration, development, exploitation and marketing operations in accordance with the Concession Agreement. The registered office of the
Operating Company is at 361 El-Horreya Road, Sidi Gaber, Alexandria, Egypt.
The ARE is entitled to a royalty of 3% of net sales revenue from the sale of gold and associated minerals from the Sukari Project,
payable in cash in each calendar half year. Net sales revenue is calculated by deducting from sales revenue all shipping, insurance,
smelting and refining costs, delivery costs not payable by customers, all commercial discounts and all penalties (relating to the quality of
gold and associated minerals shipped).
Under the Concession Agreement, PGM solely funds the Operating Company but is entitled to recover the following costs and expenses
payable from sales revenue (excluding the royalty payable to ARE):
* all current operating expenses incurred and paid after the initial commercial production;
* exploration costs, including those accumulated to the commencement of commercial production (at the rate of 33.3% per annum); and
* exploitation capital costs, including those accumulated prior to the commencement of commercial production (at the rate of 33.3%
per annum).
If costs recoverable by PGM exceed the sales revenue (excluding any royalty payable to ARE) in any financial year, the excess is carried
forward for recovery in the next financial year or years until fully recovered, but in no case after the termination of the Concession
Agreement.
After deduction of the royalty payments and recoverable expenses by PGM, the remainder of the sales revenue from the Sukari Project will
be shared equally by PGM and EMRA except that for the first and second years in which there are net proceeds for the entire year, an
additional 10% of such proceeds will be paid to PGM as an incentive (i.e. 60% to PGM and 40% to EMRA), and for each of the next two years in
which there are net proceeds for the entire year, an additional 5% of such proceeds will be paid to PGM (i.e. 55% to PGM and 45% to EMRA).
In addition, under the Concession Agreement, certain tax exemptions have been granted, including the following:
* commencing on the date of commercial production, PGM will be entitled to a 15 year exemption from any taxes imposed by the
Egyptian government. The parties intend that the Operating Company will in due course file an application to extend the tax-free period for
a further 15 years. The extension of tax-free period requires that certain activities in remote areas of the lands under the Concession Area
have been programmed and agreed by all parties;
* PGM, EMRA and the Operating Company are exempt from custom taxes and duties with respect to the importation of machinery,
equipment and consumable items required for the purpose of exploration and mining activities at the Sukari Project;
* PGM, EMRA, the Operating Company and their respective buyers will be exempt from any duties or taxes on the export of gold and
associated minerals produced from the Sukari Project;
* PGM will at all times be free to transfer in US dollars or other freely convertible foreign currency any cash of PGM representing
its share of net proceeds and recovery of costs, without any Egyptian government limitation, tax or duty; and
* PGM's contractors and sub-contractors are entitled to import machinery, equipment and consumable items under the "Temporary
Release System" which provides exemption from Egyptian customs duty.
Under the Concession Agreement, all land in the Sukari Project shall be the property of EMRA as soon as it is purchased. The title to
the fixed and movable assets are to be transferred by PGM to EMRA as soon as their costs are recovered by PGM, with PGM being entitled to
use all fixed and movable assets during the term of the Exploitation Lease and any extensions thereof.
In case of national emergency, due to war or imminent expectation of war or internal causes, ARE may requisition all or part of the
production from the areas that are the subject of the Concession Agreement, and require the Operating Company to increase production to the
utmost extent. ARE may also requisition the mine itself and, if necessary, related facilities. In the event of any requisition, ARE must
indemnify EMRA and PGM for the period during which the requisition is maintained.
ARE has the right to terminate the Concession Agreement in the following circumstances:
* PGM has knowingly submitted any material false statements to the Egyptian government;
* PGM assigns any interest to any unrelated party without the written consent of the Egyptian government;
* PGM does not comply with any final decision reached as a result of provisions in the Concession Agreement with respect to disputes
and arbitration;
* PGM intentionally extracts any mineral other than gold and associated minerals authorized by the Concession Agreement without the
approval of the Egyptian government; or
* PGM commits any material breach of the Concession Agreement.
If the Egyptian government deems that any one of the foregoing causes exists, the government is required to give PGM 90 days' notice to
remedy the defaults. If the default remains unremedied at the expiration of the grace period, the Egyptian government may terminate the
Concession Agreement.
RISK FACTORS
The ordinary shares of Centamin are considered speculative due to the nature of Centamin's business and the present stage of its
development. A prospective investor should carefully consider the risk factors set out below.
Centamin depends on a single mineral project.
The Sukari Project accounts for all of the Company's mineral resources and reserves and the potential for the future generation of
revenue. Any adverse development affecting the progress of the Sukari Project such as, but not limited to, unusual and unexpected geologic
formations, seismic activity, rock bursts, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of
which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage,
hiring suitable personnel and engineering contractors, or securing supply agreements on commercially suitable terms, may have a material
adverse effect on the Company's financial performance and results of operations.
The development of the Sukari Project into a commercially viable mine cannot be assured.
Gold development projects, such as Centamin's Sukari Project in Egypt, have no operating history upon which to base estimates of future
commercial viability. Estimates of mineral resources and mineral reserves are, to a large extent, based on the interpretation of geological
data obtained from drillholes and other sampling techniques and feasibility studies. This information is used to calculate estimates of the
capital cost and operating costs based upon anticipated tonnage and grades of gold to be mined and processed, the configuration of the
mineral resource, expected recovery rates, comparable facility and equipment operating costs, anticipated climatic conditions and other
factors. As a result, it is possible that estimated and actual reserves may differ and such a difference could have a material adverse
effect on the Company's business, financial condition, results of operations and prospects. There can be no assurance that the Company will
be able to complete development of their mineral projects, or any of them, at all or on time or to budget due to, among other things, and in addition to those factors described above, changes in
the economics of the mineral projects, the delivery and installation of plant and equipment and cost overruns, or that the current
personnel, systems, procedures and controls will be adequate to support Centamin's operations. Should any of these events occur, it would
have a material adverse effect on Centamin's business, financial condition, results of operations and prospects.
Precious metal exploration projects may not be successful and are highly speculative in nature.
The exploration for and development of precious metals involves significant risks which even a combination of careful evaluation,
experience and knowledge cannot eliminate. While the discovery of a precious metal deposit may result in substantial rewards, few properties
which are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish mineral reserves,
to develop metallurgical processes and to construct mining and processing facilities at a particular site. Whether a precious metal deposit
will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade
and proximity to infrastructure; metal prices which are highly cyclical; and government regulations, including regulations relating to
prices, taxes, royalties, land tenure, land use, importing and exporting of precious metals and environmental protection. The exact effect
of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital. There is no certainty that
the expenditures made by the Company towards the search and evaluation of precious metal deposits will result in discoveries of commercial
quantities of such metals.
Mining operations generally involve a high degree of risk.
Mining operations are subject to all the hazards and risks normally encountered in the exploration for and development and production of
precious metals, including unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding, variations in
grade, deposit size, density and other geological problems, hydrological conditions, metallurgical and other processing problems, mechanical
equipment performance problems, the unavailability of materials and equipment including fuel, labour force disruptions, unanticipated
transportation costs, unanticipated regulatory changes, unanticipated or significant changes in the costs of supplies including, but not
limited to, petroleum, and adverse weather conditions and other conditions involved in the drilling and removal of material, any of which
could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and
possible legal liability. Should any of these risks and hazards affect any of Centamin's proposed mining operations, it may cause the cost of production to increase to a point where it would not
longer be economic to produce gold from the Company's mineral reserves, which would have a material and adverse affect on the financial
condition, results of operation, and cash flows of the Company.
Gold price volatility may effect the future production, profitability, financial position and financial condition of Centamin.
The development and success of the Sukari Project will be primarily dependent on the future price of gold. Gold prices are subject to
significant fluctuation and are affected by a number of factors which are beyond the control of the Company. Such factors include, but are
not limited to, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign
currencies, global and regional supply and demand, and the political and economic conditions of major gold-producing countries throughout
the world. The price of gold and other base and precious metals has fluctuated widely in recent years, and future serious price declines
could cause continued development of, and commercial production from, the Company's properties to be impracticable or uneconomic. Depending
on the price of gold and other base metals, projected cash flow from planned mining operations may not be sufficient and the Company could
be forced to discontinue development and may lose its interest in, or may be forced to sell, some of its properties. Future production from the Company's mining properties is dependent on gold
prices that are adequate to make these properties economically viable.
Furthermore, reserve calculations and life-of-mine plans using significantly lower gold prices could result in material write-downs of
the Company's investment in mining properties and increased amortization, reclamation and closure charges. In addition to adversely
affecting the Company's mineral reserve estimates and its financial condition, declining commodity prices can impact operations by requiring
a reassessment of the feasibility of a particular project. Such a reassessment may be the result of a management decision or may be required
under financing arrangements related to a particular project. Even if the project is ultimately determined to be economically viable, the
need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed.
Centamin's mineral resources and reserves are estimates only.
There is no certainty that the mineral resources, or any future mineral reserve, attributable to Centamin will be realized. Until
mineral reserves or mineral resources are actually mined and processed, the quantity of mineral resources and mineral reserve grades must be
considered as estimates only. In addition, the quantity of mineral reserves and mineral resources may vary depending on, among other things,
metal prices and currency exchange rates. Any material change in the quantity of mineral reserves, mineral resources, grade or stripping
ratio may affect the economic viability of the properties. In addition, there can be no assurance that gold recoveries or other metal
recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.
Results of drilling, metallurgical testing and production and the evaluation of mine plans subsequent to the date of any estimate may
require revision of such estimate. The volume and grade of reserves mined and processed and recovery rates may not be the same as currently
anticipated. Any material reductions in estimates of mineral reserves and mineral resources, or of the Company's ability to extract these
mineral reserves, could have a material adverse effect on the Company's results of operations and financial condition. Also, a reduction in
estimated reserves could require material write-downs in investment in the affected mining property and increased amortization, reclamation
and closure changes.
Foreign investments and operations are subject to numerous risks associated with operating in foreign jurisdictions.
Centamin conducts mining, development or exploration activities in Egypt. Centamin's foreign mining investments are subject to the risks
normally associated with the conduct of business in foreign countries. The occurrence of one or more of these risks could have a material
and adverse effect on Centamin's profitability or the viability of its affected foreign operations, which could have a material and adverse
effect on Centamin's future cash flows, earnings, results of operations and financial condition.
Risks may include, among others, labour disputes, invalidation of governmental orders and permits, corruption, uncertain political and
economic environments, sovereign risk, war (including in neighbouring states), civil disturbances and terrorist actions, arbitrary changes
in laws or policies of particular countries, the failure of foreign parties to honour contractual relations, corruption, foreign taxation,
delays in obtaining or the inability to obtain necessary governmental permits, opposition to mining from environmental or other
non-governmental organizations, limitations on foreign ownership, limitations on the repatriation of earnings, limitations on gold exports,
instability due to economic under-development, inadequate infrastructure and increased financing costs. In addition, the enforcement by the
Company of its legal rights to exploit its properties may not be recognized by the government of Egypt or by its court system. These risks
may limit or disrupt Centamin's operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization or expropriation without
fair compensation.
The economy and political system of Egypt should be considered by investors to be less predictable than those in countries in which the
majority of investors are likely to be resident. The possibility that the current, or a future, government may adopt substantially different
policies, take arbitrary action which might halt production, extend to the re-nationalization of private assets or the cancellation of
contracts, the cancellation of mining and exploration rights and/or changes in taxation treatment cannot be ruled out, the happening of any
of which could result in a material and adverse effect on the Company's results of operations and financial condition.
Centamin may experience regulatory, consent or permitting delays.
The business of mineral exploration, project development, mining and processing is subject to various national and local laws and plans
relating to: permitting and maintenance of title; environmental consents; taxation; employee relations; heritage / historic matters; health
and safety; royalties; land acquisition; and other matters.
There is a risk that the necessary permits, consents, authorizations and agreements to implement planned exploration, project
development, or mining may not be obtained under conditions or within time frames that make such plans economic, that applicable laws,
regulations or the governing authorities will change or that such changes will result in additional material expenditures or time delays.
There is no assurance as to Centamin's ability to sustain and expand mineral reserves and resources.
Because mines have limited lives based on proven and probable mineral reserves, the Company will be required to continually replace and
expand its mineral reserves as its mines produce gold. The life-of-mine estimates included in this Annual Information Form in respect of the
Sukari Project may not be correct. The Company's ability to maintain or increase its annual production of gold in the future will be
dependent in significant part on its ability to bring new mines into production and to expand mineral reserves at existing mines. The Sukari
Project has an estimated life of 22 years based only on proven and probable mineral reserves.
Feasibility studies may be used to determine the economic viability of a deposit. Many factors are involved in the determination of the
economic viability of a deposit including the achievement of satisfactory mineral reserve estimates, the level of estimated metallurgical
recoveries, capital and operating cost estimates and the estimate of future gold prices. Capital and operating cost estimates are based upon
many factors, including anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, ground and
mining conditions, expected recovery rates of the gold from the ore and anticipated environmental and regulatory compliance costs. Each of
these factors involves uncertainties and as a result Centamin cannot give assurance that its development or exploration projects will become
operating mines. If a mine is developed, actual operating results may differ from those anticipated, thereby impacting on the economic
viability of the project.
Centamin's current and proposed exploration and mining activities are situated entirely in a single country.
Egypt has been politically stable for over 25 years, particularly under the presidency of Hosni Mubarak who succeeded Anwar Sadat in
October 1981. The United States remains Egypt's chief ally and source of foreign aid and it is important that Egypt is able to maintain a
balance between its relationship with the United States and with its Arab neighbours. The major identifiable threat to political stability
is Islamic militancy. While this appears to be under control, there can be no guarantee that this will continue to be the case. There has
been sporadic terrorist activity by militant Islamic organizations in Egypt. While the tourist industry has been the main target of such
groups, it is possible that they may turn their attention to the assets of the extractive industries in Egypt. Increased tension in Israel
may result in a less stable political situation in the Middle East which could have a material adverse effect on Centamin.
Centamin is conducting its exploration and development activities entirely in Egypt. Centamin believes that the Government of Egypt
supports the development of natural resources. There is no assurance that future political and economic conditions in Egypt will not result
in the Government of Egypt adopting different policies respecting foreign development and ownership of mineral resources. Any such change in
policy may result in changes in laws affecting ownership of assets, land tenure and mineral concessions, taxation, royalties, rates of
exchange, environmental protection, labour relations, repatriation of income and return of capital, which may affect both Centamin's ability
to undertake exploration and development activities in respect of future properties as well as its ability to continue to explore and
develop those properties in respect of which it has obtained mineral exploration rights to date.
Centamin's title to mineral rights could be challenged.
The acquisition and retention of title to mineral rights is a detailed and time consuming process. Title to, and the area of, mineral
resource claims may be disputed or challenged. The Company's right to explore for, mine, produce and sell gold from the Sukari Project is
based on the Concession Agreement. Should Centamin's rights under the Concession Agreement not be honoured or be unenforceable for any
reason, or if any material term of the Concession Agreement is unilaterally changed or not honoured, including the boundaries, Centamin's
ability to explore and produce gold in the future would be materially and adversely affected, and this would have a material and adverse
effect on the Company's financial performance and results of operations.
The Company's right to explore, develop, mine and sell gold and associated minerals under the Concession Agreement may be terminated if
the Egyptian government determines that the Company has submitted material false statements to the Egyptian government; that the Company has
assigned any interest to any unrelated party without the written consent of the Egyptian government; that the Company has not complied with
any final decisions reached as a result of provisions in the Concession Agreement with respect to disputes and arbitration; that the Company
has intentionally extracted any mineral other than gold and associated minerals authorized by the Concession Agreement without the approval
of the Egyptian government; or that the Company has committed any material breach of the Concession Agreement. The Company cannot guarantee
that the Egyptian government will not deem any of the above events to have happened, arbitrarily or not. Any claim of such events occurring
could result in termination of the Concession Agreement.
Under the Concession Agreement, all land in the Sukari Project will be the property of EMRA. Title to the fixed and movable assets are
also required to be transferred by the Company to EMRA as soon as their costs are recovered by the Company. Should the relationship between
the EMRA and the Company breakdown, the Company will not have legal title to the land at Sukari nor the fixed or movable assets which could
result in removal of Company personnel from the Project area and/or prevention from using the fixed and moveable assets which could result
in delays of operations.
Centamin relies on its management team and outside contractors, and the loss of one or more of these persons may adversely affect
Centamin.
The success of the operations and activities of Centamin is dependent to a significant extent on the efforts and abilities of its
management and outside contractors. Investors must be willing to rely to a significant extent on management's discretion and judgment, as
well as the expertise and competence of outside contractors. Centamin does not have in place formal programs for succession of management
and training of management, nor does it hold key person insurance on these individuals. The loss of one or more of these key employees or
contractors, if not replaced, could adversely affect Centamin's profitability, results of operations and financial condition.
Inferred mineral resources are uncertain and their economic viability cannot be assured.
Inferred mineral resources cannot be converted into mineral reserves as the ability to assess geological continuity is not sufficient to
demonstrate economic viability. Due to the uncertainty which may attach to inferred mineral resources, there is no assurance that inferred
mineral resources will be upgraded to resources with sufficient geological continuity to constitute proven and probable mineral reserves as
a result of continued exploration.
Centamin has no history of mining operations.
The Company has no history of mining operations, and there is no assurance that it will successfully produce gold, generate revenue,
operate profitably or provide a return on investment in the future. Other factors mentioned in this risk section of the Annual Information
Form may also prevent Centamin from successfully operating a mine.
Centamin's properties are subject to environmental risks.
Mining operations have inherent risks and liabilities associated with pollution of the environment and the disposal of waste products
occurring as a result of mineral exploration and production. Laws and regulations involving the protection and remediation of the
environment and the governmental policies for implementation of such laws and regulations are constantly changing and are generally becoming
more restrictive. Centamin cannot give any assurance that, notwithstanding its precautions, breaches of environmental laws (whether
inadvertent or not) or environmental pollution will not materially and adversely affect its financial condition and its results from
operations.
There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company's operations.
Environmental hazards may exist on the properties on which the Company holds interests which are unknown to the Company at present and which
have been caused by previous or existing owners or operators of the properties. Reclamation costs are uncertain and planned expenditures may
differ from the actual expenditures required.
Centamin's insurance coverage does not cover all of its potential losses, liabilities and damages related to its business and certain
risks are uninsured or uninsurable.
The Company's business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial
accidents, labour disputes or slowdowns, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the
regulatory environment or laws, and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could
result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company's properties
or the properties of others, delays in development or mining, monetary losses and possible legal liability.
Although the Company maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its
insurance will not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to
cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any
resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and
production is not generally available to the Company or to other companies in the mining industry on acceptable terms. The Company might
also become subject to liability for pollution or other hazards which may not be insured against or which the Company may elect not to
insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that
could have a material adverse effect upon its financial performance and results of operations.
Currency fluctuations may affect the costs that Centamin incurs in its operations.
A significant portion of the Company's cash and cash equivalents are held in Canadian dollars while a significant portion of its
operating expenses will be incurred in United States dollars, Australian dollars, Egyptian pounds and other foreign currencies. Gold is sold
throughout the world, based principally on a United States dollar price, but as stated above, a portion of Centamin's operating expenses are
incurred in non-United States dollar currencies. The appreciation of non-United States dollar currencies in those countries where Centamin
has mining and exploration operations against the U.S. dollar would increase the costs of gold production at such operations which could
materially and adversely affect the Company's profitability, results of operation and financial position.
Centamin has a history of operating losses and there can be no assurance that Centamin will ever be profitable.
Centamin's operations have sustained operating losses during recent fiscal years. Centamin expects to continue to sustain operating
losses in the future, partially, as a result of its accounting policy whereby the Company expenses all exploration costs until the
definition of mineral reserve. There is no guarantee that the Company will ever be profitable.
Centamin may require additional capital in the future and no assurance can be given that such capital will be available at all or
available on terms acceptable to Centamin.
The Company may require significant capital in order to develop the Sukari Project and to fund its operating costs. The Company
currently has no revenues from operations and is currently wholly reliant upon its current cash balance and available equity external
financing options to fund all of its capital requirements. The Company may require additional financing from external sources to meet such
requirements. There can be no assurance that such financing will be available to the Company or, if it is, that it will be offered on
acceptable terms. If additional financing is raised through the issuance of equity or convertible debt securities of the Company, the
interests of shareholders in the net assets of the Company may be diluted. Any failure of the Company to obtain required financing on
acceptable terms could have a material adverse effect on the Company's financial condition, results of operations and liquidity and require
the Company to cancel or postpone planned capital investments.
Dividends
Centamin has not, since the date of its incorporation, declared or paid any dividends on its ordinary shares and does not currently have
a policy with respect to the payment of dividends. For the foreseeable future, Centamin anticipates that it will retain future earnings and
other cash resources for the operation and development of its business. The payment of dividends in the future will depend on earnings, if
any, and Centamin's financial condition and such other factors as the directors of Centamin consider appropriate.
Description of Capital Structure
Description of Ordinary Shares
Since 01 July 1998, share capital in Australian companies do not have a nominal (par) value, and Australian companies do not have
authorized share capital. Under the constitution of the Company (the "Constitution"), which was adopted on 08 January 1999, the Board has
the power to issue such number of shares as they determine in their absolute discretion. As of the date of this Annual Information Form, the
Company has an aggregate of 878,519,163 shares, 10,935,000 unlisted options and 9,607,260 broker warrants issued and outstanding.
The ASX Listing Rules provide that a company must not, subject to certain exceptions, issue during any 12 month period equity securities
or other securities with rights of conversion to equity (such as an option) if the number of those securities exceeds 15% of the total
ordinary securities on issue at the commencement of that 12 month period.
Constitution of the Company
The following is a summary of key provisions of the Constitution.
Meetings. Under the Constitution, and in accordance with Section 250N of the Australian Corporations Act, annual meetings of
shareholders must be held at least once in each calendar year and within five months after the end of the Company's financial year. Under
Section 250R of the Australian Corporations Act, the business of an annual meeting may include any of the following, even if not referred to
in the notice of meeting: the consideration of the annual financial report, Directors' report and auditor's report; the election of
Directors; the appointment of the auditor; and the fixing of the auditor's remuneration. Under the Constitution and Part 2G.2 Division 3 of
the Australian Corporations Act, at least 28 days of notice must be given of a meeting of shareholders. No business shall be transacted at
an annual meeting unless a quorum is present comprising two (2) shareholders present in person, by proxy, attorney or representative.
Voting. Subject to any rights or restrictions as to voting attached to any class of shares at any annual or general meeting of
shareholders:
(i) each shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every shareholder who is present in person or by proxy or other representative shall have one vote; and
(iii) on a poll, every shareholder who is present in person or by proxy or other representative has one vote for every share of
which he is the holder but in respect of partly paid shares shall have a fraction of a vote for each partly paid share.
A poll may be demanded by at least five shareholders entitled to vote on the resolution, by shareholders with at least 5% of the total
voting rights of all shareholders having the right to vote on the resolution, or by the Chairman.
Dividends. The Board may from time to time declare a dividend to be paid to shareholders entitled to the dividend. No dividend shall be
payable except out of profits. Any dividends declared but unclaimed may be used by the Board for the benefit of the Company until claimed
or until required to be dealt with in accordance with any law relating to unclaimed moneys.
Issue of Shares. Subject to the Company's Constitution, the ASX Listing Rules and the Australian Corporations Act, the Board may at any
time issue such number of shares either as ordinary shares or shares of another named class and on such terms as the Board in its absolute
discretion determines.
Overseas Shareholders. Under the Constitution, each shareholder with a registered address outside Australia acknowledges that, with the
approval of the ASX, the Company may, in accordance with the ASX Listing Rules, arrange for a nominee to dispose of any of its entitlement
to participate in any issue of shares or share options by the Company to shareholders.
Transfer of Shares. Subject to the Constitution, a shareholder may transfer all or any of the shareholder's shares by a "Market
Transfer" (meaning an electronic transfer of shares where the transfer is pursuant to, or connected with a transaction entered into on a
stock market operated by the ASX or an instrument in writing in any usual or common form or any other form the Directors approve or an
instrument in a form approved by the ASX).
The Board may decline to register any transfer of shares (other than a Market Transfer) where the ASX Listing Rules or the rules of an
electronic transfer facility for Market Transfers permit the Company to do so; the ASX Listing Rules or the rules of an electronic transfer
facility for Market Transfers require the Company to do so; or the transfer is in breach of the ASX Listing Rules or any escrow agreement
relating to the Restricted Securities (as defined under the ASX Listing Rules) entered into by the Company under the ASX Listing Rules.
Reduction of Share Capital. The Company may reduce its share capital by any of the means authorized by the Australian Corporations Act,
subject to the provisions of that law and, where applicable, the ASX Listing Rules. The Company may reduce its share capital in any way that
is not otherwise authorized by law, including by way of an in specie distribution of the assets of the Company (including any shares in
another company), if the reduction is fair and reasonable to the Company's shareholders as a whole; does not materially prejudice the
Company's ability to pay its creditors; and is approved by shareholders in accordance with Section 256C of the Australian Corporations Act.
Share Buy-Backs. The Company may buy shares in itself by any of the means authorized by the Australian Corporations Act, subject to the
provisions of that law and, where applicable, the ASX Listing Rules.
Calls on Shares. The Board may, subject to the requirements of the Australian Corporations Act and the ASX Listing Rules, make calls
upon a shareholder in respect of any money unpaid on the shares of that shareholder. Under the Australian Corporations Act, a shareholder
who is liable to pay calls on partly-paid shares is only liable to do so in accordance with the terms on which the shares are on issue. The
Board may revoke or postpone a call once it has been made. A call is deemed to have been made at the time when the resolution of the Board
authorizing the call was passed and may be required to be paid by installments. The Board may accept from a shareholder the whole or any
part of the amount unpaid on a share although no part of that amount has been called up, and in that event the Board shall nominate whether
the amount so paid is to be treated as capital or a loan to the Company by the shareholder. Each shareholder must pay to the Company at the
time or times and place so specified the amount called on the shares, on receiving at least 15 business days notice (or such longer period as the ASX Listing Rules shall require) specifying
certain prescribed information including the name of the shareholder, the number of shares held by the shareholder; the amount and due date
for payment of the call, and the consequences of non-payment of the call. The joint holders of a share are jointly and severally liable to
pay all calls in respect of the share. The non-receipt of a notice of any call by, or the accidental omission to give notice of a call to, a
shareholder does not invalidate the call. If a sum called in respect of a share is not paid before or on the day appointed for payment of
the sum, the person from whom the sum is due must pay interest on the sum from and including the day for payment to the time of actual
payment at the "Prescribed Rate" (defined as the interest rate which is the domestic 90 day dealer bill rate published in the Australian
Financial Review plus 2% or such other rate as may from time to time be fixed by the Board, calculated daily), but the Board may waive payment of that interest wholly or in part.
Winding Up. If the Company is wound up, a liquidator may, with the authority of a special resolution of the shareholders, divide among
the shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value for the property to
be divided as the liquidator considers fair. Subject to the rights of shareholders (if any) entitled to shares with special rights in a
winding-up, all moneys and property that are to be distributed among shareholders on a winding-up shall be distributed in proportion to the
shares held by each shareholder, respectively. Under the Australian Corporations Act, a shareholder may only be liable to contribute to the
Company's property, in the instance that the Company is being wound up, to the extent of which the shareholder is liable for any amounts
unpaid on the shareholder's shares.
Variation of Rights. Under the Constitution and Section 246B of the Australian Corporations Act, if at any time the share capital of the
Company is divided into different classes of shares, the rights attached to the shares may be varied with the consent in writing of the
holders of three quarters of the issued shares of that class, or if authorized by a special resolution passed at a separate meeting of the
holders of the shares of that class. Any variation of rights is subject to the Australian Corporations Act.
Directors. The Company shall at all times have a minimum of three Directors, at least two of whom must ordinarily reside in Australia.
The maximum number of Directors is ten and the Company, may by ordinary resolution, increase or reduce the number of Directors.
Directors Voting. Under the Constitution, questions arising at any Director's meeting shall be decided by a majority of votes. In the
case of an equality of votes, the Chairman of the meeting shall have a second or casting vote, but the Chairman shall have no casting vote
where only two Directors are competent to vote on the question.
Alteration of Constitution. The Company's Constitution can only be amended by a special resolution passed by at least three quarters of
the votes cast by shareholders entitled to vote on the resolution.
Description of Unlisted Options
As at 30 June 2008, Centamin had 11,785,000 unlisted options to acquire ordinary shares on issue. The following table shows the movement
in options subsequent to 30 June 2007.
Unlisted options outstanding as of 30 June 2007 13,490,000
Granted during the financial year (1) 3,750,000
Forfeited during the financial year (2) (557,500)
Exercised during the financial year (3) (4,897,500)
Outstanding as of 30 June 2008 11,785,000
(1) Options issued during the financial year
A total of 3,750,000 unlisted options were issued during the financial year to 30 June 2008. The details of these options are as
follows:-
Number of Ordinary shares under option Exercise Price Expiry Date
A$
250,000 1.4034 15 October 2010
3,500,000 1.7022 15 April 2011
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.
(2) Options forfeited during the financial year
A total of 557,500 unlisted options were forfeited during the financial year to 30 June 2008, due to employees ceasing employment with
the Company. The details of these options are as follows:-
Number of Ordinary shares under option Exercise Price Expiry Date
A$
500,000 1.1636 25 June 2010
57,500 0.7106 31 January 2010
(3) Options exercised during the financial year
A total of 4,897,500 unlisted options were exercised during the financial year to 30 June 2008. The details of these options are as
follows:-
Number of Ordinary shares under option Exercise Price Expiry Date
A$
395,000 0.2804 04 February 2008
200,000 0.2804 17 February 2008
30,000 0.3500 31 October 2010
1,607,500 0.7106 31 January 2010
2,000,000 0.8000 09 January 2009
165,000 1.0500 24 May 2010
500,000 1.1636 25 June 2010
Options exercised subsequent to balance date
1,100,000 options have been exercised subsequent to 30 June 2008. The details of these options are as follows:-
Number Exercise Price Expiry Date
A$
600,000 0.3500 31 October 2010
250,000 0.6566 30 August 2009
250,000 0.7106 31 January 2010
Options issued subsequent to balance date
250,000 options have been issued subsequent to 30 June 2008. The details of these options are as follows:-
Number Exercise Price Expiry Date
A$
250,000 1.1999 25 August 2011
Description of Unlisted Broker Warrants
As at 30 June 2008, Centamin has 9,607,260 unlisted broker warrants to acquire ordinary shares on issue. The following table shows the
movement in options subsequent to 30 June 2007.
Unlisted broker warrants outstanding as of 30 June 2007 8,794,691
Granted during the financial year (1) 5,600,000
Forfeited during the financial year (2) -
Exercised during the financial year (3) (4,787,431)
Outstanding as of 30 June 2008 9,607,260
(1) Broker Warrants issued during the financial year
A total of 5,600,000 unlisted broker warrants were issued during the financial year to 30 June 2008. The details of these options are as
follows:-
Number of Ordinary shares under warrant Exercise Price Expiry Date
C$
5,600,000 1.2000 23 November 2009
The broker warrants were issued on 10 January 2008. The broker warrants vested and were exercisable immediately. These options expire on
23 November 2009.
(2) Broker Warrants forfeited during the financial year
There were no broker warrants forfeited during the financial year to 30 June 2008.
(3) Broker Warrants exercised during the financial year
A total of 4,787,431 unlisted broker warrants were exercised during the financial year to 30 June 2008. The details of these options are
as follows:-
Number of Ordinary shares under warrant Exercise Price Expiry Date
C$
3,751,431 0.8600 05 April 2009
1,036,000 0.8600 11 April 2009
Broker Warrants exercised subsequent to 30 June 2008
There have been no broker warrants exercised subsequent to 30 June 2008.
Broker Warrants issued subsequent to 30 June 2008
There have been no broker warrants issued subsequent to 30 June 2008.
Market for Securities
Centamin's ordinary shares are listed and posted for trading on the TSX under the symbol "CEE", on the ASX under the symbol "CNT" and on
the AIM Market of the London Stock Exchange ("AIM") under the symbol "CEY". The following table sets forth the reported high and low sale
prices (including intraday highs and lows) and the average daily trading volumes (on days where the shares traded) of Centamin's ordinary
shares on the TSX, the ASX and AIM for each of the periods indicated.
TSX ASX AIM
2008 High (C$) Low (C$) Average High (A$) Low (A$) Average High (p) Low Average
Volume Volume (p) Volume
June 1.310 1.110 15,003,276 1.380 1.110 2,409,377 66.250 56.250 20,813,965
May 1.410 1.250 7,487,030 1.490 1.320 2,026,718 69.750 65.500 10,784,884
April 1.580 1.280 15,406,634 1.575 1.355 2,619,908 73.250 66.500 36,650,392
March 1.580 1.300 16,127,450 1.705 1.460 3,800,159 78.250 67.000 20,980,318
February 1.600 1.260 25,707,847 1.725 1.390 4,795,773 78.250 64.000 30,523,146
January 1.440 1.050 34,617,677 1.630 1.150 6,710,517 69.000 56.500 37,276,780
High (C$) Low (C$) Average High (A$) Low (A$) Average High (p) Low Average
2007 Volume Volume (p) Volume
December 1.250 1.030 16,523,566 1.420 1.220 1,759,023 59.500 53.750 31,630,584
November 1.380 1.190 18,075,120 1.620 1.405 3,650,652 69.000 58.500 39,592,951
October 1.340 1.130 34,958,357 1.450 1.260 2,334,595 66.000 57.500 28,410,549
September 1.290 1.000 15,155,244 1.415 1.180 1,602,682 61.500 48.500 38,101,081
August 1.250 0.870 25,143,579 1.400 0.930 2,978,008 55.000 41.000 47,163,102
July 1.390 1.030 22,021,788 1.400 1.110 6,195,601 60.000 47.500 37,638,033
Directors and Officers
Name, Occupation and Security Holding
The names and municipalities of residence of the directors and executive officers of Centamin, positions held by them with Centamin and
their principal occupations for the past five years are as set forth below.
Name and Municipality of Current Office with Principal Director Since(2)
Residence Centamin Occupation(1)
Directors
Sami El-Raghy Chairman Chairman, 29 April 1993
Alexandria, Egypt Centamin Egypt Limited
Josef El-Raghy Managing Managing Director / 26 August 2002
Perth, Australia Director/Chief CEO, Centamin Egypt
Executive Officer Limited
Trevor Stanley Schultz Executive Director Executive Director of 20 May 2008
Anges Water, QLD, Australia of Operations Operations, Centamin
Egypt Limited
Colin Neil Cowden Non-Executive Executive Chairman 08 March 1982
Director
Martin, Western Australia(3) Cowden Limited
(4)
Gordon Brian Speechly Non-Executive Mining Consultant 15 August 2000
Director
Booragoon, Western Australia
Thomas Gee Elder Non-Executive President, Mano River 08 May 2002
Director
Oxford, United Kingdom(4)(5) Resources Inc.
Herbert Stuart Bottomley Non-Executive Consultant, Self 26 September 2005
Director Employed
East Sussex, United
Kingdom(3)(5)
Graeme Robert Tangye Bowker Non-Executive Retired Ambassador 21 July 2008
Director
Garran, ACT,
Australia(3)(4)(5)
Senior Officers
Mark Smith Chief Financial Chief Financial n/a
Victoria Park, Western Officer Officer, Centamin
Australia (resigned 07 August Egypt Limited
2008)
Heidi Brown Company Secretary Company Secretary, n/a
Ascot, Western Australia Centamin Egypt Limited
Mark Di Silvio Chief Financial Chief Financial n/a
Inglewood, Western Australia Officer Officer, Centamin
(appointed 25 July Egypt Limited
2008)
Notes:
(1) During the past five years each of the foregoing directors and senior officers has been engaged in the principal occupation shown
opposite his name above, except as follows:
* Mr Smith was the Finance Manager at Redback Mining Inc. from March 2004 to September 2005 before taking up a position at Grange
Resources Limited as CFO/Company Secretary in September 2005 until July 2006. In addition, from October 2001 to October 2003, Mr Smith was
the Financial Controller for Giants Reef Mining Limited.
* From 2001 until 2003, Professor Bowker formed part of the directing staff at the Centre for Defence and Strategic Studies at the
Australian Defence College, Canberra, while on secondment from the Australian Department of Foreign Affairs and Trade. He was Visiting
Reader at CAIS in 2004, and from 2005 until he retired on 30 June 2008, was the Australian Ambassador to Egypt.
* Mr Di Silvio worked for Woodside Petroleum from July 1998 to September 2007 in the roles of Finance Manager - Mauritania, Finance
Team Leader - Operations, and Senior Management Accountant - Corporate, before taking up the Chief Financial Officer and Company Secretarial
role at Central Petroleum Limited in October 2007.
* Mr Schultz - From October 1996 until December 2003, Mr Schultz was the Chief Operating Officer of Ashanti Goldfields Company Ltd.
From January 2004 until December 2005, Mr Schultz was the President and CEO of Guinor Gold Corporation in London. From January 2006 to June
2007, Mr Schultz was a Consultant to Crew Gold Corporation and from July 2007 until his appointment as Executive Director of Operations, he
was a mining consultant for various companies.
* Mrs Brown - Mrs Brown joined the Company in January 2003 as Administration Assistant. She was appointed Joint Company Secretary in
July 2004 and became Company Secretary in February 2005.
(2) Each director's term of office expires at the later of the third annual general meeting of shareholders of the Company or three
years following that Director's last election or appointment. One third of the Directors must retire at each annual general meeting.
Retiring Directors are eligible for re-election.
(3) Member of the Audit Committee.
(4) Member of the Remuneration Committee.
(5) Member of the Compliance/Corporate Governance Committee.
As of the date of this Annual Information Form, the directors and officers of Centamin and its subsidiaries, as a group, beneficially
owned, directly or indirectly, or exercised control or direction over 83,989,380 ordinary shares, representing approximately 9.56% of the
issued and outstanding ordinary shares of Centamin as set out in the table below:
Shares Options
Directors
Sami El-Raghy (1) 78,235,754 -
Josef El-Raghy (1) 79,185,754 -
Colin Neil Cowden 603,626 500,000
Gordon Brian Speechly 250,000 -
Thomas Gee Elder 250,000 500,000
Herbert Stuart Bottomley 2,800,000 500,000
Trevor Stanley Schultz - -
Graeme Robert Tangye Bowker - -
Senior Officers
Mark Smith 500,000 500,000
Heidi Brown 400,000 250,000
Mark Di Silvio - 250,000
Notes:
(1) The total shares beneficially owned by Messrs. Sami El-Raghy and Josef 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) and S&M El-Raghy (350,000 shares). The balance of 950,000
shares are held by Mr Josef El-Raghy through his being a director of Montana Realty Pty Ltd .
Options issued to directors and officers during the financial year
Name Office Issue Date No of Unquoted Exercise Price Expiry Date
Options A$
Mrs H Brown Company Secretary 16 April 2008 250,000 1.7022 16 April 2011
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 officers during the financial year
Name Office Exercise Date No of Unquoted Exercise Price Expiry Date
Options A$
Mrs H A Brown Company Secretary 13 February 2008 200,000 0.7106 31 January 2010
Management
Biographical information for each member of the Company's management is set forth below. Messers Sami El-Raghy, Josef El-Raghy and
Trevor Schultz are the only directors who are full-time employees of the Company. No member of Centamin's management is currently subject to
a non-competition or non-disclosure agreement with the Company.
Directors
Sami El-Raghy, B.Sc. (Hons), FAusIMM, FEG, Chairman - Mr El-Raghy graduated from Alexandria University in 1962 and 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 Corporation. Mr El-Raghy recognized the potential of the Marymia Dome and the Barwidgee Yandal Belt long before these areas
became the most sought after mining areas in Australia. He brings to the Board over 41 years of experience in the industry, both in
Australia and overseas. Mr El-Raghy has been a Director of Centamin since 29 April 1993.
Josef El-Raghy, B.Comm, Managing Director/Chief Executive Officer - Mr 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
(now Patersons Securities Limited). 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 El-Raghy has been the Managing Director and Chief Executive Officer of the Company since 26 August 2002.
Trevor Schultz, M.A (ECON), M.Sc (Min Eng), Executive Director of Operations - Mr Schultz has a Masters Degree in Economics from
Cambridge University, a Masters of Science Degree in Mining from the Witwatersrand University and completed the Advanced Management Program
at Harvard University. Trevor has more than 40 years experience at the executive management and board level with leading international
mining companies, including BHP, RTZ/CRA, Pegasus Gold and Ashanti Goldfields. His roles included development of several new mining
operations in Africa, South America and the U.S.A., negotiations with various governments and their agencies and project financing and
capital raisings. Most recently Mr Schultz is currently a director of Pacific Road Capital Management. From April 2003 until December 2005,
Mr Schultz was a director of Guinor Gold Corporation, from December 2003 to June 2006 was a director of Southern Era Pty Ltd and from
October 1996 to December 2003 was a director of Ashanti Goldfields Pty Ltd. Mr Schultz was appoited to the Board on 20 May 2008 as a non-executive director, however became the Executive Director of Operations on
15 August 2008.
Colin Cowden, FAII, ASA, ACIS, FNIBA, CD, Non-Executive Director - Mr 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 is a qualified accountant and Chartered Secretary, and is a Fellow of the Australian Insurance Institute.
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 Cowden has been a Director of Centamin since 08 March 1982.
G. Brian Speechly, FAusIMM, Non-Executive Director - Mr 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
recognized in Australia and overseas as an expert in both underground and open pit mining and design. Mr Speechly has been a director of
Dynasty Metals & Mining Inc since 28 April 2004 and has been a Director of Centamin since 15 August 2000.
Dr. Thomas Elder, PhD, FIMM, FGS, Non-Executive Director - 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 British
Petroleum Plc, and Rio Tinto Plc. Dr Elder ran exploration programmes in the UK, Spain, Italy, Portugal and Greenland for Cominco Limited,
prior to his appointment as worldwide Exploration Manager for BP Minerals International Limited in 1983. Following the take-over by Rio
Tinto Plc 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 Plc since 12 January 2006 and, having held the position of President from 04 October 1998 to 30 September 2007, is
now a non-executive director of Mano River Resources Inc. Dr Elder has been a director of Centamin since 08 May 2002.
H. Stuart Bottomley, Non-Executive Director - Mr. Bottomley worked as a portfolio manager for over 20 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.
He has been a Director of Centamin since 26 September 2005.
Professor G. Robert Bowker, Non-Executive Director - Professor Bowker retired from the Australian Foreign Service in June 2008 after a
37 year career specialising in Middle East issues. He was Australian Ambassador to Egypt (2005 to 2008) and Jordan (1989 to 1992), in
addition to postings in Syria (1979 to 1981) and Saudi Arabia (1974 to 1976). Professor Bowker was accredited from Cairo as a non-resident
ambassador to Libya, Sudan, Syria and Tunisia. Professor Bowker has a PhD from the Centre for Arab and Islamic Studies, Australian National
University 2001, an MA from the Centre for Middle East and Central Asian Studies, Australian National University 1995, a BA (Hons)
Indonesian and Malayan Studies and Political Science, Melbourne University 1970 and completed an RAF Arabic course, Beaconsfield, UK 1988.
Professor Bowker joined the Centamin Board on 21 July 2008.
Senior Officers
Mark Smith, Chief Financial Officer - Mr Smith joined the Company in July 2006 as Finance Manager and was appointed Chief Financial
Officer of the Company in January 2007. Mr Smith holds a Bachelor of Business from the Queensland University of Technology. He is a CPA with
16 years post-graduate experience across a wide variety of industries. He has considerable experience in project financing, establishing
accounting systems and controls for project development and operations reporting. From 2001 to 2003, Mr Smith served as Company Secretary
and Financial Controller of Giants Reef Mining Limited, a gold and copper mining company listed on the ASX. From 2004 to 2005, Mr Smith was
a finance manager for Red Back Mining Inc, a gold mining company with mining interests in Ghana. From 2005, until he joined the Company in
2006, Mr Smith served as Chief Financial Officer of Grange Resources Limited, a mining and exploration company based in Western Australia
and listed on the ASX. Mr Smith resigned from the Company on 07 August 2008.
Heidi Brown, Company Secretary - Mrs Brown joined the Company in January 2003 as Administration Assistant. She was appointed Joint
Company Secretary in July 2004 and became Company Secretary in February 2005. Mrs. Brown has over ten 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 Di Silvio, Chief Financial Officer - Mr Di Silvio holds a Bachelor of Business from Curtin University in Western Australia and
completed a Master of Business and Administration at the University of Western Australia. A Certified Practicing Accountant with over 17
years post graduate experience in the resources sector, Mr Di Silvio commenced his career with a variety of finance based roles within the
gold mining sector whilst based in Kalgoorlie, Western Australia. Mr Di Silvio joined oil and gas independent Woodside Energy Limited in
1998, gaining oilfield experience through the financial management of joint ventures and the development of accounting and compliance
management systems. Prior to leaving Woodside in 2007, Mr Di Silvio was responsible for the financial management of Woodside's Mauritanian
oilfield assets. Most recently, Mr Di Silvio was CFO for Central Petroleum Limited, a junior oil & gas exploration company based in Perth,
Western Australia. Mr Di Silvio was appointed on 25 July 2008.
Corporate Cease Trade Orders or Bankruptcies
No director, officer, promoter or other member of management of the Company is, or within the ten years prior to the date hereof has
been, a director, officer, promoter or other member of management of any other issuer that, while that person was acting in the capacity of
a director, officer, promoter or other member of management of that issuer, was the subject of a cease trade order or similar order or an
order that denied the issuer access to any statutory exemptions for a period of more than thirty consecutive days.
Penalties or Sanctions and Personal Bankruptcies
No director, officer, promoter or other member of management of the Company has, during the ten years prior to the date hereof, been
subject to any penalties or sanctions imposed by a court or securities regulatory authority relating to trading in securities, promotion,
formation or management of a publicly traded company, or involving fraud or theft.
No director, officer, promoter or other member of management of the Company has, during the ten years prior to the date hereof, been
declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency
or has been subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold his or her assets.
Conflicts of Interest
The directors and officers of Centarmin are, or may become, directors or officers of other companies with businesses which may conflict
with the business of the Company. Directors are required to act honestly and in good faith with a view to the best interests of the Company.
In addition, directors in a conflict of interest position are required to disclose certain conflicts to the Company and to abstain from
voting in connection with the matter. To the best of the Company's knowledge, there are no known existing or potential conflicts of interest
between the Company or a subsidiary of the Company and a director or officer of the Company or a subsidiary of the Company as a result of
their outside business interests at the date hereof. However, certain of the directors and officers serve as directors and/or officers of
other companies. Accordingly, conflicts of interest may arise which could influence these persons in evaluating possible acquisitions or in
generally acting on behalf of the Company.
Committees of the Board of Directors
General
The board of directors has established three board committees: an Audit Committee, a Remuneration Committee and a Compliance/Corporate
Governance Committee.
In addition, the full board of directors is responsible for developing the Company's approach to corporate governance issues. The best
practices of the Australian Securities Exchange Corporate Governance Council (the "ASX Corporate Governance Council"), the AIM Rules for
Companies, the Combined Code on Corporate Governance (the "Combined Code"), and the best practice recommendations of the Toronto Stock
Exchange and those prescribed under National Policy 58-201 - Corporate Governance Guidelines ("NP 58-201"), have been applied by the board
of directors. Where there has been any variation from the recommendations, it is because the board of directors believes that the Company is
not yet of a size, nor are its financial affairs of such complexity to justify some of those recommendations and as such those practices
continue to be the subject of the scrutiny of the full board of directors.
The information below sets out the current members of each of the Company's board committees and summarizes the functions of each of the
committees in accordance with their mandates.
Audit Committee
The Audit Committee has been structured in accordance with the ASX Corporate Governance Council, the Combined Code requirements and the
provisions of National Instrument 52-110 - Audit Committees.
The main responsibilities of the Audit Committee are to:
* consider and approve the appointment of external auditors of the Company, audit fee and other external remuneration of the
auditors, and questions of resignation and dismissal;
* ensure the independence and objectivity of the external auditors;
* discuss with the external auditors, before each annual audit commences, the nature and scope of the audit, and other relevant
matters;
* review the half year and annual financial statements before submission to the board of directors;
* discuss problems and reservations arising from final audits, interim audits or otherwise, and any matters the external auditors
may wish to discuss;
* review the external auditor's management letter and management's response;
* review the Company's statement on internal control systems prior to endorsement by the board of directors;
* consider the major findings of any internal investigations and management's response;
* review any internal audit program established by the Company and ensure that it is adequately resourced; and
* consider other topics, as defined by and referred to the Audit Committee by the board of directors.
Audit Committee Charter
A copy of the Audit Committee Charter is attached as Schedule A to this Annual Information Form.
Composition of the Audit Committee
The Audit Committee is comprised of Colin Cowden (Chairman), Stuart Bottomley and Robert Bowker, each of whom is an unrelated,
independent director. The board of directors has determined that all members of the Audit Committee are financial experts as defined in
Section 407 of the Sarbanes-Oxley Act. Each of the members of the Audit Committee is "independent" and "financially literate" within the
meaning of National Instrument 52-110 - Audit Committees of the Canadian Securities Administrators. For a description of the relevant
education and experience of the Audit Committee members, see "Directors and Officers".
Pre-Approval Procedures
Under the Audit Committee Charter, the Audit Committee is required to pre-approve all non-audit services provided by the Company's
external auditor and related fees. In addition, any proposal to grant the external auditor consulting work to the value of A$50,000 or more
(other than audit-related work and work relating to taxation services) must be referred to the chairman of the Audit Committee prior to
granting the work.
Fees Paid to External Auditors
Audit, tax and other fees billed to the Company by its external auditor, Deloitte Touche Tohmatsu, in each of the fiscal years ended 30
June 2007 and 30 June 2008 are set out below:
Fiscal Year ended 30 Fiscal Year ended 30 June 2008
Fees June 2007 (US$)
(A$)
Audit Fees (1) $115,638 $236,499
Tax Fees (2) $ 11,091 $ 33,298
All Other Fees (3) $125,362 -
Total $252,091 $269,797
Notes:
(1) Audit fees comprise professional services for the audit of the Company's annual financial statements, review of the Company's
interim financial statements and services normally provided in connection with the Company's continuous disclosure filings.
(2) Tax fees comprise amounts paid for tax compliance and advisory services.
(3) Other fees include the provision of services with regards to the TSX listing.
Remuneration Committee
The Remuneration Committee is comprised of Tom Elder (Chairman), Colin Cowden and Robert Bowker, each of whom is an unrelated,
independent director.
The Remuneration Committee meets regularly to consider all material elements of remuneration policy and the remuneration of executive
directors and senior management and to make recommendations to the board of directors on the framework for executive remuneration and its
cost. In addition, the role of the Remuneration Committee is to enable the Company to attract and retain the best executives to manage the
Company. It will also provide the executives with the necessary incentives to work to grow long-term shareholder value.
The board of directors is responsible for implementing the recommendations and agreeing to the remuneration packages of individual
directors.
Compliance/Corporate Governance Committee
The Compliance/Corporate Governance Committee was established on 28 May 2008, and comprises Stuart Bottomley (Chairman), Robert Bowker
and Tom Elder.
The Committee shall assist the Board in fulfilling its fiduciary responsibilities by making recommendations to the Board with respect to
the formulation or re-formulation of and implementation, maintenance and monitoring of the Company's Corporate Compliance Program and Code
of Conduct as may be modified, supplemented or replaced from time to time, designed to ensure compliance with Corporate policies and legal
rules and regulations. Fundamental to the Company's corporate governance policy and practice is that all directors and employees reflect
Centamin's key values of accountability, fairness, integrity and openness. The Committee shall oversee the Company's activities in the area
of corporate compliance that may impact the Company's business operations or public image, in light of applicable government and industry
standards, legal and business trends and public policy issues. It will pay particular attention to health and safety, environmental,
archaeological and social responsibility issues addressed by the Company.
Legal Proceedings
Centamin is not the subject of any legal proceedings material to the Company, to which the Company is a party or to which any of its
properties is subject and no such proceedings are known to be contemplated.
Interest of Management and Others in Material TransactionS
No director or senior officer of Centamin or any shareholder holding, on record or beneficially, directly or indirectly, more than 10%
of the issued Centamin ordinary shares, or any of their respective associates or affiliates, had any material interest, directly or
indirectly, in any material transaction with Centamin within the three most recently completed financial years or during the current
financial year in any proposed transaction which has materially affected or would materially affect Centamin.
Transfer Agent and Registrar
Centamin's registrar and transfer agent in Canada is Computershare Investor Services Inc. at 100 University Ave, 8th Floor, North Tower,
Toronto, Ontario M5J 2Y1. The Company's registrar and transfer agent in the United Kingdom is Computershare Investor Services PLC at PO Box
82, The Pavillions, Bridgwater Road, Bristol, BS99 7NH, United Kingdom. Centamin's registrar and transfer agent in Australia is
Computershare at Level 2, 45 St Georges Terrace, Perth, 6000, Western Australia.
Material Contracts
The only material contracts entered into by Centamin or its subsidiaries within the most recently completed fiscal year (or before but
is still in effect), other than contracts entered into in the ordinary course of business, are as follows:
1. Exploitation Lease dated 24 May 2005 between PGM and EMRA and approved by the Egyptian Minister of Petroleum. See "Description of
the Business - Ownership - the Sukari Concession Agreement" in this Annual Information Form.
Interests of Experts
Information of an economic (including economic analysis), scientific or technical nature regarding the Sukari Project is included in
this Annual Information Form based upon the Technical Report dated 02 March 2007 authored by Nic Johnson of Hellman & Schofield Pty Ltd,
Paul Newling at Roche Process Engineering Pty Ltd, Chris Orr at George, Orr and Associates (Australia) Pty Ltd, Dave Morgan at Knight Piold
Pty Ltd, Martin Staples of AMC Consultants Pty Ltd and Geoff Motteram of Geomett Pty Ltd, each of whom is a "Qualified Person" within the
meaning of NI 43-101. The Technical Report provides an independent technical review of the mineral resources and reserves, and development
of the Sukari Project. All of the authors of the Technical Report are independent of Centamin within the meaning of National Instrument
43-101 and do not have an interest in the property of Centamin. Deloitte Touche Tohmatsu audit the Company's annual financial statements.
Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by geologist Mr
R Osman who is a full time employee of the Company, and is a member of the Australasian Institute of Mining and Metallurgy with more than
five years experience in the fields of activity being reported on, and is a 'Competent Person' for this purpose and is a "Qualified Person"
as defined in "National Instrument 43-101 of the Canadian Securities Administrators". His written consent has been received by the Company
for this information to be included in this report in the form and context which it appears. The assay samples were analysed by Ultra Trace
Pty Ltd, Canning Vale, Western Australia.
The information in this report that relates to mineral resources is based on work completed by Mr Nicolas Johnson, who is a Member of
the Australian Institute of Geoscientists. Mr Johnson is a full time employee of Hellman and Schofield Pty Ltd and has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to
qualify as a "Competent Person" as defined in the 2004 edition of the "Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves" and is a "Qualified Person" as defined in "National Instrument 43-101 of the Canadian Securities
Administrators". Mr Johnson consents to the inclusion in the report of the matters based on his information in the form and context in which
it appears.
Additional Information
Additional information, including particulars of directors' and officers remuneration and indebtedness, principal holders of the
Company's securities and interests of insiders in material transactions, where applicable, is contained in the Company's information
circular for its most recent annual general meeting of shareholders that involved the election of directors. Additional financial
information is provided in the Company's financial statements for its most recently completed financial year and in the Company's unaudited
financial statements for the quarter ended 31 March 2008, copies of which have been filed with each applicable securities commission.
Additional information, including the Company's financial statements and MD&A for its most recently completed financial year ended 30
June 2008 and interim MD&A and financial statements for the quarter ended 30 June 2008 may be found on SEDAR at www.sedar.com.
GLOSSARY OF TECHNICAL TERMS
"accreted" in geology, accretion is a process by which
sediment is added to a tectonic plate
"activated carbon" a chemical used in extracting gold from the
leach solution, the gold is absorbed into the
porous matrix of the carbon
"adit" a horizontal, or nearly horizontal passage of a
mine from the ground surface (commonly the side
of a hill) for working the mine
"adsorb" to attract and retain other material on the
surface; to conduct the process of adsorption
"anhedral" a term applied to mineral grains showing no
development of crystal form
"arsenopyrite" FeAsS; sulpharsenide of iron; which occurs in
some gold ore bodies
"assay" an analysis to determine the presence, absence,
and quantity of one or more metallic components
"Au" is the chemical symbol for gold
"base metals" copper, lead, and zinc; as distinct from
precious metals (gold, silver, platinum group)
"breccia" rock composed of angular fragments, commonly
coarse grained (grains over 5 mm across); may
be sedimentary, igneous, tectonic, or supergene
"calc-alkaline" applied to igneous rocks in which the dominant
feldspar is calcium rich
"chip sample" rock chips broken from rock surface with a
hammer along a line to make a composite sample
of chips; the length of the line is commonly
one or two metres, the mass of the sample 2 kg
or more
"CIL" carbon-in-leach; a process in which finely
ground gold ore is leached with weak alkaline
solutions of sodium cyanide bubbled with air or
oxygen, and the slurry (pulp) has added to it
tough porous carbon particles about the size of
wheat grains onto which gold cyanide ions are
adsorbed; following adsorption, the loaded
carbon is washed and stripped of gold cyanide
ions by heated stronger alkaline cyanide
solutions from which metallic gold is recovered
by electro-winning
"concentrate" a product containing valuable metal from which
most of the waste material in the ore has been
eliminated
"continental crust" the 10-20km thick surface crust of the earth
located on land mass
"comminution" the act of reducing to a fine powder or to
small particles; typically by grinding
"cut-off" the grade above which mineralized material is
considered to be ore
"cyanide" sodium cyanide (NaCN)
"cyanidation" the use of weak alkaline solutions of sodium
cyanide to extract gold and silver from ores
"diamond drill" the machine for drilling holes in rocks to get
cylindrical cores of rock for examination and
chemical analyses; the cutting face of the
drill bit is impregnated with diamonds which
cut the rock when the bit is rotated; the core
of rock is caught in a core barrel behind the
bit; ground rock is flushed from the hole by
water pumped down the drill rods; the water
also cools the bit which heats up during
drilling
"dip" the angle between the horizontal and a plane,
measured at right angles to the strike
"ductile" plastic deformation; not brittle
"duplicate" a sample that has been split from another to
check the field sampling or laboratory's
precision
"elution" process of removing gold from the carbon by
using a strong solution of caustic soda and
cyanide
"en echelon" parallel and stepped
"EPCM" engineering, procurement and construction
management
"euhedral" a term applied to mineral grains displaying
fully developed crystal form
"extension vein" a vein that develops perpendicular to the
direction of greatest stress and parallel to
the direction of compression
"fault" a tectonic break or fracture in a body of rock
"feasibility study" a comprehensive study of a deposit in which all
geological, engineering, operating, economic
and other relevant factors are considered in
sufficient detail that it could reasonably
serve as the basis for a final decision by a
financial institution to finance the
development of the deposit for mineral
production
"feldspar" alumino-silicate minerals such as orthoclase
KAlSi3O8; albite NaAlSi3O8; anorthite
CaAl2Si2O8
"felsic" igneous rocks containing one or more of quartz,
feldspar, or feldspathoids, or the equivalent
glasses
"float tail" those mineral particles that sink during the
process of flotation
"flotation" a milling process by which some mineral
particles are induced to become attached to
bubbles of froth and float, and others to sink,
so that the valuable minerals are concentrated
and separated from the remaining rock or
mineral material
"gold dore" an alloy that is produced after the first stage
of the purification process, containing
approximately 90% gold as well as metals such
as silver or copper. It must be refined in
order to achieve the levels of purity required
to be traded on gold markets.
"grade" the amount of mineral in each tonne of ore.
"grade control" the process of determining the grade and
location of ore and from this producing ore
blocks; those ore blocks are marked out in the
open pit to let the mining personnel know where
the ore is situated
"granite" refers to coarse-grained igneous rock, with
quartz, feldspars and micas
"granitoid" resembling granite in granular appearance
"granodiorite" refers to coarse-grained igneous rock, with
quartz, plagioclase and micas
"igneous" refers to a rock formed by the cooling of
molten material
"Indicated Resource" that part of a mineral resource for which
quantity, grade or quality, densities, shape,
and physical characteristics can be estimated
with a level of confidence sufficient to allow
the appropriate application of technical and
economic parameters to support mine planning
and evaluation of the economic viability of the
deposit. The estimate is based on detailed and
reliable exploration and testing information
gathered through appropriate techniques from
locations such as outcrops, trenches, pits,
workings, and drill holes that are spaced
closely enough for geological and grade
continuity to be reasonably assumed
"Inferred Resources" that part of a mineral resource for which
quantity and grade or quality can be estimated
on the basis of geological evidence, limited
sampling, and reasonably assumed, but not
verified, geological and grade continuity. The
estimate is based on limited information and
sampling gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, and workings
"intrusive" rock which, while molten, penetrated into or
between other rocks but solidified before
reaching the surface.
"island arc" an arcuate chain of islands associated with
areas of strong seismic activity
"laminated" developed in thin discrete layers
"leach" to dissolve minerals or metals out of ore with
chemicals.
"level" in connection with a mine, means development
workings at about the same elevation; commonly
numbered downwards from the surface, eg Levels
1, 2, 3, etc, or by their relative elevation,
eg 1000m level, 1050m level etc.
"lode" a body of mineralized rock, commonly tabular
and dipping
"Measured Resources" that part of a mineral resource for which
quantity, grade or quality, densities, shape,
and physical characteristics are so well
established that they can be estimated with
confidence sufficient to allow the appropriate
application of technical and economic
parameters to support production planning and
evaluation of the economic viability of the
deposit. The estimate is based on detailed and
reliable exploration, sampling and testing
information gathered through appropriate
techniques from locations such as outcrops,
trenches, pits, workings, and drill holes that
are spaced closely enough to confirm both
geological and grade continuity
"mange" a jumble of rock bodies
"meta" (prefix) changed, altered
"mineral resource" a concentration or occurrence of natural,
solid, inorganic or fossilized organic material
in or on the Earth's crust in such form and
quantity and of such a grade or quality that it
has reasonable prospects for economic
extraction. The location, quantity, grade,
geological characteristics and continuity of a
mineral resource are known, estimated or
interpreted from specific geological evidence
and knowledge
"mineralization" refers to the presence of a mineral of economic
interest in a rock
"Multiple Indicator Kriging" a method used to interpolate values (grades)
from a sample data set onto a grid. A commonly
used method to compute resources.
"Neoproterozoic" refers to the time period roughly from 900
million years ago to 650 million years ago
"open pit" mine workings for ores open to the surface, a
pit; like a quarry for stone
"orogeny" a period of mountain building
"oxidation" loosely, the sub-aerial weathering of rocks,
generally with the presence of water
"pebble crushing" part of the comminution process
"porphyritic" refers to the texture of an igneous rock in
which there are larger crystals (phenocrysts)
set in a contrasting matrix or groundmass of
smaller crystals or glass
"porphyry" 1. Any porphyritic rock
2. At Sukari; loosely, for the felsic host
rocks of the gold mineralization
"Precambrian" in connection with geological time (before
Cambrian), means before about 600 million years
ago
"Probable Reserves" the economically mineable part of an indicated,
and in some circumstances, a measured mineral
resource demonstrated by at least a preliminary
feasibility study. This study must include
adequate information on mining, processing,
metallurgical, economic, and other relevant
factors that demonstrate, at the time of
reporting, that economic extraction can be
justified
"Proven Reserves" the economically mineable part of a measured
mineral resource demonstrated by at least a
preliminary feasibility study. This study must
include adequate information on mining,
processing, metallurgical, economic, and other
relevant factors that demonstrate, at the time
of reporting, that economic extraction is
justified
"pyrite" iron sulphide (FeS2) mineral
"quartz" commonly referred to as SiO2; silicon dioxide;
and is very common mineral in rocks; occurs
also as veins, and stockworks
"quartz reef" refers to a body of quartz, in places commonly
associated with gold; commonly tabular and
steeply inclined
"RC drill" reverse circulation drilling means rock
drilling powered by compressed air
"ROM" run-of-mine
"sedimentary" a rock formed from cemented or compacted
sediments
"sediments" the debris resulting from the weathering and
breakup of pre-existing rocks
"shear zone" a zone of shearing (intense foliation);
shearing is the response of a rock to
deformation usually by compressive stress
"sheeted" a vein filling a shear zone
"shield" a major unit of the Earth's crust, consisting
of a large mass of Precambrian rocks
"stockworks" refers to mineralized veining, multiple-veined,
at first sight irregularly, with many veins and
veinlets in a host rock.
"stope" refers to an opening in a mine from which ore
has been mined, usually near to vertical and of
considerable length and depth, and of lesser
width
"strike" the bearing of a horizontal line in a planar
geological feature
"strip ratio" the ratio of waste that needs to be mined to
obtain a unit of ore, usually expressed as
tonnes of waste to tones of ore
"siliceous" flooded by silica (SiO2) minerals
"sulphide" a mineral compound in which one or more metals
are found in combination with sulfur
"tonalite coarse-grained igneous rock
"tailings" refers to finely ground effluent rock waste
from ore treatment plant, in aqueous suspension
as it leaves the plant; pumped to large
containments where treatment water is
recovered, and the tailings dry out
"vein" sheet-like body of minerals formed by fracture
filling or replacement of host rock.
"wadi" (Arabic) valley, of any size; in Eastern Desert
of Egypt floored with rock debris washed from
adjacent hills during infrequent rain storms
Abbreviations
"mm" millimetre
"m" metre
"km" kilometre
"t" metric tonne (1000 kg)
"Mt" million metric tones
"g/t" gramme / metric tonne
"g" gramme
"kg" kilogramme
"oz" Troy ounce (used for precious metals)
"Moz" million Troy ounces
"MW" megawatts
"mmboe" million barrels of oil equivalent
"NQ" diamond core diameter 47.6mm
"HQ" diamond core diameter 63.5mm
Conversion
"1 inch" 254 mm (exact)
"1 ounce Troy" 31.103477 g
Schedule A
Audit Committee Charter
1 PURPOSE OF THE CHARTER
1.1 The Audit Committee Charter sets out its mandate and responsibilities, and must not be inconsistent with the listing rules and
regulatory framework within which Centamin Egypt Limited "the Company" and its controlled entities operate.
1.2 The Audit Committee Charter is reviewed annually by the Committee to ensure it remains consistent with the Committee's authority,
objectives and responsibilities.
1.3 For the purposes of ensuring compliance across the various trading exchanges that Centamin Egypt Limited is listed on the Company
has chosen to model its charter against the prescriptive requirements of Multilateral Instrument 52-110 which forms part of the listing
requirements for the Toronto Stock Exchange. The Board of Centamin Egypt Limited considers that compliance with this instrument
automatically ensures compliance across the other trading exchanges.
2 DEFINITION AND OBJECTIVE OF THE CENTAMIN AUDIT COMMITTEE
2.1 The Audit committee ("the Committee") is a sub-committee of the Centamin Egypt Limited Board of Directors ("the Board") whose
primary function is to assist the Board in discharging its responsibility to exercise due care, diligence and skill in the areas of:
* Application of accounting policy and reporting of financial information to shareholders, regulators and the general public;
* Business risk management and internal control systems, including business policies and practices; and
* Corporate conduct and business ethics, including Auditor Independence and ongoing compliance with laws and regulations.
2.2 Membership of the Audit Committee will be disclosed in the Annual Report.
3 MEMBERSHIP AND TERM
3.1 The Committee consists of a minimum of three Directors of the Board.
3.2 Committee members are required to be independent as per the definition of independence contained in section 1.4 of Multilateral
Instrument 52-110 which is attached as an addendum to this charter.
3.3 Committee members are required to be financially literate as per the definition of financial literacy contained in section 1.5 of
Multilateral Instrument 52-110. For the purposes of that instrument, and individual is financially literate if her or she has the ability to
read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally
comparable to the breadth and complexity of the issues that can be reasonably be expected to be raised by the Company's financial
statements.
3.4 The term of appointment as a member is for a period determined by the Board, with Committee members generally being eligible for
re-appointment for so long as they remain independent Directors of the Board. The effect of ceasing to be a Director of the Board is the
automatic termination of appointment as a member of the Committee.
4 CHAIRMAN
4.1 The Chairman of the Committee, an independent non-executive Director, is selected by the Board.
4.2 Should the Chairman be absent from a meeting and no Acting Chairman has been appointed, the members of the Committee present at
the meeting have authority to choose one of their number to be Chairman for that particular meeting.
5 MEETINGS
Meetings Other than in Person
5.1 The Committee may conduct meetings without all Committee members being involved in the meeting in the physical presence of one
another provided that all Committee members involved in the meeting are able to participate in discussion.
Frequency of Meetings
5.2 As a minimum, the Committee meets five times per annum as detailed in item 5.4 of the charter.
5.3 In addition, the Chairman will call a meeting of the Committee if so requested by any member of the Committee, by the external
Auditors or by the Chairman of the Board.
5.4 Scheduled meetings are broadly structured. The table below provides a guide to the timing and suggested minimum content for each
meeting. In addition to the agenda items indicated in the table, any other relevant external Auditor reports or significant correspondence
that may arise between meetings is considered at the next scheduled meeting.
Meeting Timing
Meeting A A date that coincides with the completion of 1st Quarter Report of
activities and earnings
Meeting B A date that coincides with the completion of 2nd Quarter Report of
activities and earnings
Meeting C A date that coincides with the completion of 3rd Quarter Report of
activities and earnings
Meeting D A date that coincides with the completion of 4th Quarter Report of
activities and earnings
Meeting E A date prior to the full year audit commencement date
Agenda Item Meeting Meeting Meeting Meeting Meeting
A B C D
E
1. Consider and recommend the
appointment of the external
Auditor and their compensation.
2. Set compensation for
advisors employed by the
Committee.
3. Consider and review the
adequacy of the management
information and internal control
systems, including information
technology controls and
security, and business
continuity plans.
4. Consider any other issues
that may impact the half yearly
or year end financial statements
or that otherwise require
resolution prior to finalisation
of Half Yearly or Annual
Accounts.
5. Make enquiries in relation to
matters of corporate conduct,
including consideration of any
management report highlighting
actual or potential conflicts of
interest or significant
transactions with related
parties.
6. Receive a report from
Management on the superannuation
arrangements.
7. Review the Audit scope and
objectives for the external
Audit program for the ensuing
year and approve the associated
Audit fee.
8. Review and approve the
Committee's Annual Report to the
Board summarising the
Committee's activities during
the year.
9. Review and make
recommendations to the Board
concerning any proposed changes
to the Audit Committee Charter.
10. Review and note significant
changes to the Corporate Review
Charter.
11. Review and pre-approve all
non-Audit services provided by
the external Auditor and related
fees.
12. Review the Audit scope and
objectives for the Corporate
Review work program for the next
half year.
13. Review the Auditor's
independence statement provided
for the Board by the external
Auditors for
* their reappointment
* the half year and
* year end audits.
14.Review the draft half-yearly
financial statements prior to
recommending their adoption by
the Board, including (where
applicable) the review of any
management representations made
in support of the half-yearly
financial statements, and the
review of any other supporting
documentation and discussion of
the key issues inherent in
preparing the financial
statements.
15. Review the draft year end
financial statements prior to
recommending their adoption by
the Board, including review of
management representations, and
other supporting documentation
and discussion of the key issues
inherent in preparing the
financial statements.
16. Review the Group's corporate
governance practices and ethical
code of conduct including
consideration of the Corporate
Governance Statement to be
included in the Annual Report.
17. Review the management
processes for the identification
of significant business risks
and exposures including an
assessment of the steps
management has taken to minimise
such risk.
18. Review the Annual summary to
the Board of the major
operational risks facing
Centamin.
19. Review financial statements,
MD&A and annual and interim
earnings press releases before
the Company publicly discloses
the information.
20. Review the results and
findings of the statutory
financial Audit including review
of the draft Audit opinion,
review of any management
representation letter sent to
the external Auditors,
discussion of the adequacy of
internal financial controls and
noting consideration of any
changes to the external Audit
program since the Committee's
earlier review.
21. Review the status of the
Corporate Review and external
Audit programs.
6 ATTENDANCE AT MEETINGS AND QUORUM
6.1 Other Board Directors (executive and non-executive) have a right of attendance at meetings. However, no Board Director is
entitled to attend that part of a meeting at which an act or omission of that Director or a contract, arrangement or undertaking involving
or potentially involving that Director or a related party of that Director is being investigated or discussed.
Notwithstanding the above, if in the opinion of the Committee, their investigation or discussion will be assisted by hearing from
the interested Board Director, the Committee may invite that Board Director to address the Committee. The Committee shall give fair
consideration to that address. The Board Director will not, however, be invited to take part in the deliberations following that address.
6.2 The Managing Director / Chief Executive Officer, Chief Financial Officer and Company Secretary are invited to attend each meeting
of the Committee. Other Company executives and / or parties external to the Company may be invited to attend any meeting of the Committee.
6.3 The external Audit engagement partner/client manager should attend any meeting of the Audit Committee.
6.4 The quorum for a meeting is two or more members or any greater number determined by the Committee from time to time.
7 SECRETARY
7.1 The Company Secretary or other appropriate executive acts as Secretary of the Committee.
8 SCOPE, ACCESS & AUTHORITY
8.1 The activities of the Committee are in relation to the Centamin group of companies.
8.2 The Committee has direct access to the Company's external Auditors and has the authority to seek any information it requires to
carry out its duties from any officer or employee of any entity of the Company and such officers or employees shall be instructed by the
Board of the entity employing them to cooperate fully in the provision of such information.
8.3 The Committee also has the authority to consult any independent professional adviser it considers appropriate to assist it in
meeting its responsibilities.
9 REPORTING
9.1 Proceedings of all meetings are minuted and signed by the Committee Chairman.
9.2 The Committee, through its Chairman, reports to the Board at the earliest possible Board Meeting after each Committee meeting.
Minutes of all Committee meetings are circulated to Board Directors. The report should include but not limited to:
* The minutes of the Committee and any formal resolutions;
* Information about the Audit process including the results of internal and external Audits;
* Any determination by the Audit Committee relating to the independence of the external Auditor;
* Any other matters that in the opinion of the Audit Committee should be brought to the attention of the Board, and any
recommendations requiring Board approval and/or action; and
* At least annually, a review of the formal written charter and its continuing adequacy, and an evaluation of the extent to which
the Committee has met the requirements of the charter.
9.3 In addition, the Chairman of the Committee is encouraged to submit an Annual Report to the Board (at the Board meeting at which
the year end financial statements are approved) summarising the Committee's activities during the year. The report (and where appropriate
any interim report) must include:
* A summary of the Audit Committee's main authority, responsibilities and duties;
* Biographical details of Audit Committee members, including expertise, appointment, dates and terms of appointment;
* Member and related party dealings with the company;
* Details of meetings, including the number of meetings held during the relevant period, and the number of meetings attended by each
member;
* Details of any change to the independent status of each member during the relevant period, if applicable; and
* Details of any determination by the Audit Committee regarding the external Auditor's independence.
10 DUTIES
10.1 The duties and responsibilities of a member of the Committee are in addition to those duties set out for a Director of the
Board.
10.2 This section outlines the specific duties the Committee is expected to undertake in meeting its principle purpose. These duties
are grouped below under five headings - Financial & External Reporting, Risk Management & Internal Control Structure, Audit Activities,
Audit Scope & Audit Independence, Corporate Governance & Integrity plus Other Matters. Under each of these headings, the primary duty (where
applicable) has been noted first followed by an indicative list of tasks that the Committee may consider undertaking in order to satisfy the
primary duty.
10.3 The terms of reference of the Committee, including its role and the authority delegated to it by the Board, will be made
available. A separate section of the Annual Report will describe the work of the committee in discharging those responsibilities.
Financial & External Reporting
Primary Duty
The Committee is expected to review all audited Centamin Egypt Limited group companies financial statements intended for publication
prior to recommending their approval by the Board. This includes quarterly reports, if audited quarterly accounting is adopted by the
Board.
In respect of unaudited quarterly reports or reports to regulators, the Chairman will review these on the Committees behalf.
The review process includes determining that management and the external Auditors are satisfied with the contents of the financial
statements and the adequacy of disclosure therein.
Indicative Task List
Tasks the Committee may undertake in meeting this responsibility include:
* Review the appropriateness of the Company's accounting policies and principles;
* Review the processes used by management that monitor and ensure compliance with laws, regulations and other requirements relating
to external reporting by the company of financial and non-financial information. These include, but are not limited to:
* Relevant Accounting Standards;
* Corporations Act;
* Listing Rules of the Company, including but not limited to:
* The existence of an appropriate procedure for meeting the Company's continuous disclosure obligations; and
* Reviewing for completeness and accuracy the disclosure of the company's main corporate governance practices; and where applicable,
requirements of other countries;
* Reviewing any significant changes in accounting policies or principles or any changes in the application of those policies or
principles compared with prior years, including considering the reasons for the changes and the external Auditors' views of the changes, and
if thought appropriate, recommending that such changes be submitted to the Board for approval;
* Enquiring into any significant difference of opinion between management and the external Auditors concerning disclosures in the
financial statements and how the matter was resolved, considering any material adjustments arising from the external or internal Audits and
reviewing cases where management has sought advice on specific accounting matters from any other external advisers, and reporting those
matters to the Board.
* Comparing operating results with prior years and budgets, and obtaining explanations for significant variances;
* Examining significant accounting accruals, provisions and estimates that may have a material impact or effect on the financial
statements;
* Assessing the adequacy of procedures in place for the review of the Company's public disclosure of financial information;
* Determining that disclosures in the financial statements are appropriate and comply with all relevant legislation and accounting
pronouncements by obtaining assurance regarding the major aspects of such disclosure and comparing disclosures made in the draft financial
statements with those representations for reasonableness and accuracy;
* Enquiring into current developments likely to affect the financial statements or financial reporting by reviewing new or pending
accounting and legislative pronouncements, disclosure requirements and taxation matters and proposed changes to the formats of financial
statements, as they affect both current and future years; and
* Reviewing current and pending litigation which management or legal counsel believes is likely to have a material effect on the
financial statements.
Risk Management & Internal Control Structure
Primary Duty
The responsibility of the Committee in the area of risk management and internal control is to monitor the risk management and
internal control structure implemented by management and advise on significant changes to that structure so as to obtain reasonable
assurance that the Company's assets are safeguarded and that reliable financial records are maintained.
Indicative Task List
Tasks the Committee may perform under this heading include:
* Reviewing management's processes and results in identifying, assessing and monitoring risks associated with the Company's business
operations and the implementation and maintenance of policies and control procedures to give adequate protection against key risks;
* Considering and assessing the appropriateness and effectiveness of management information and other systems of internal control,
encompassing review of the external Auditors' reports to management on internal controls (including information technology controls), and
action taken or proposed resulting from those reports;
* Any other business risks that are not dealt with by a specific Board Committee; and
* Once a year report to the Board a summary of the major operational risks facing the Company.
Audit Activities, Audit Coverage & Auditor Independence
Primary Duty
The key responsibility of the Committee in relation to the activities of external Audit are to ensure that the Audit approach covers all
financial statement areas where there is a risk of material misstatement and that Audit activities are carried out throughout the Company in
the most effective, efficient and comprehensive manner with due regard to the differing roles of external Audit.
The Committee has the responsibility to ensure that the External Auditor meets the required standards for Auditor Independence. In
carrying out its responsibilities for monitoring Auditor Independence the Committee will be cognisant of the following;
* On the occasion that the External Audit Services are to be tendered, responsibility for nominating the external Auditor (to be
proposed for shareholder approval) and for evaluating the external Auditor will lie with the Audit Committee. In this instance the Committee
would:
* Review any prospect of Auditor replacement and/or tender suggested by management;
* before any decision is made, report the results of its investigation to the Board of Directors and make recommendations; and
* where the decision for replacement or a new tender is made, all work would then be conducted by the Committee;
* The Committee should have primary responsibility for making a recommendation on the appointment, re-appointment and removal of the
external auditors. If the Board does not accept the Committee's recommendation, it should include in the Annual Report, and in any papers
recommending appointment or re-appointment, a statement from the Committee explaining the recommendation and should set out reasons why the
Board has taken a different position.
* The external Auditor reports to the Audit Committee but is responsible to the Board of Directors, as representatives of the
shareholders;
* It is mandatory that the Audit Partner responsible for the Audit be rotated at least every five years. At least two years must
expire before the Audit Partner can again be involved again in the Audit of the Group;
* The Committee must monitor the number of former employees of the external Auditor who were involved in auditing the company,
currently employed in senior financial positions in the company, and assess whether this impairs or appears to impair the Auditor's judgment
or independence in respect of the company;
* Consider whether taken as a whole, the various relationships between the company and the external Auditor impairs or appears to
impair the Auditor's judgment or independence in respect of the company;
* Review the economic importance of the company (in terms of fees paid to the external Auditor for the Audit as well as fees paid to
the external Auditor for the provision of non-Audit services) to the external Auditor for the provision of non-Audit services) to the
external Auditor and assess whether the economic importance of the company to the external auditor impairs or impair the external Auditor's
judgment or independence in respect of the company; and
* Any proposal to grant the external Auditor consulting work to the value of $50,000 or more (other than audit-related work and work
relating to taxation services) will be referred to the chairman of the Audit Committee by management prior to granting the work.
* Monitor and review the effectiveness of the internal audit activities. Where there is no internal audit function, the Committee
will consider annually whether there is a need for an internal audit function and make a recommendation to the Board, and the reasons for
the absence of such a function should be explained in the relevant section of the Annual Report.
Indicative Task List
As a practical matter, some specific tasks the Committee will focus on in meeting its responsibilities for Audit Activities, Audit
Coverage & Auditor Independence include:
� Ensuring that the external Auditor provides an annual declaration for the half year and full year accounts (addressed to the
Board of Directors) that provides;
o an account of all relationships between the external Auditor and the company
o confirmation that the Auditor has maintained its independence in accordance with:
- The Corporations Act,
- The rules of the professional accounting bodies and
- The auspices of this Charter and
o Confirmation by the Auditor that it is, in its professional judgment, independent of the company;
� In addition, the Audit Committee may hold discussions with the external Auditor in relation to these disclosed
relationships, and their potential impact on Auditor independence;
� Ensuring that the Annual Report for the financial year;
� Provides disclosure of the dollar amount of all non-Audit services provided by the external Audit firm to the Company,
divided by category of service;
� Discloses whether the Committee has considered whether the provision of non-Audit services is compatible with maintaining
the Auditor*s independence;
� Ensuring that the External Auditor or a representative of the Auditor attend the AGM at which the Auditor*s report is
tabled;
� Periodically reviewing the method by which the external Auditors communicate matters to management and the Board to confirm
appropriateness and currency;
� On an annual basis, reviewing their terms of engagement and recommending to the Board the appointment and remuneration of
the external Auditors;
� Annually reviewing the Audit plan of the external Auditors by considering it in light of the terms of their engagement,
areas of special concern to the external Auditors or to the Board, the extent to which changes in internal accounting control have affected
the plan and the coordination of planned work with Corporate Review;
� Assessing the performance of the external Auditors by discussion with management, together with the Committee*s own
perceptions from its interaction with the external Auditors; and
� Review all representation letters signed by management.
Corporate Governance and Integrity
Primary Duty
The principle role of the Committee in relation to corporate integrity is to provide assurance that the Company adequately complies with
applicable laws and regulations, is conducting its affairs ethically and is maintaining appropriate controls against employee conflict of
interest and fraud.
Indicative Task List
Some specific matters the Committee may focus on under this heading include:
* Considering Company policies concerning compliance with laws, regulations, business ethics and conflicts of interest, including
policies in relating to the Company's continuous disclosure obligations and rules governing trading in Centamin Egypt Limited shares by
officers and employees;
* Review arrangements by which staff of the Company may, in confidence, raise concerns about possible improprieties in matters of
financial reporting or other matters. The objective being to ensure that arrangements are in place for the proportionate and independent
investigation of such matters and for appropriate follow-up action;
* Reviewing any significant recommended changes to the Company's Code of Ethical Conduct and monitoring the procedures in place to
ensure compliance with that Code;
* Reviewing and monitoring related party transactions and assessing their propriety;
* Enquiring into actual or potential conflicts of interest, including reviewing contracts, arrangements or undertakings that may
involve related parties and more generally, monitoring significant transactions to ensure they are at arm's length;
* Reviewing any investigation of significant misconduct or fraud and significant instances of employee conflict of interest; and
* Considering the appropriateness and currency of the Company's corporate governance practices, including consideration of the
Corporate Governance Statement to be included in the Centamin Egypt Limited Annual Report.
Other Matters
From time to time, the Committee may need to request, or, if approved by the Board, to direct, a special project or investigation into a
serious issue or significant transaction that falls within the ambit of the Committee's overall responsibilities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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