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Centamin Egypt Limited
admin | Aug 08, 2010 | Comments 0
Centamin Egypt Limited is a rapidly growing gold producer with their flagship project, the Sukari Gold Mine, recently entering into production. With over 9 million ounces of gold reserves, the Company is implementing a rapid expansion program to increase production to 500,000 oz per year over the next three years.
Believe it or not, Centamin is the first and only significant developer of a modern mine in Egypt. The company has been exploring for gold in Egypt since 1995, and in 2005 it was granted a mining license over the massive Sukari Hill gold project.
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https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
Sukari Hill
Sukari Hill (believed to derive from the Arabic word for ‘sweet’ due to the quartz’s resemblance to sugar), is located within a 160 sq km license area of the Sukari Gold Project. Sukari Hill has hosted varying ancient mining communities spanning thousands of years. It was mined by the Pharaohs, the Romans and the British.
Centamin completed a Feasibility Study in February 2007 which concluded:
* Construction of a 4mtpa plant
* Producing on average 200,000 ounces per year
* Average cash operating costs of approximately US$365/oz (inclusive of 3% royalty)
* Total capital construction costs are estimated at US$265m
* 15‑year mine life
Construction commenced in Q2 of 2007 and commercial production began in June 2009. In 2010 the mine is scheduled to produce 200,000 ounces of gold at under $400 per oz. However, there are 7 million oz of gold in reserves at Sukari Hill, and a 200,000 oz operation isn’t reaching the mines full potential. So Centamin is going to be inititiating some major expansion over the next two years.
Currently Sukira Hill is an open pit mine, but an underground operation will be advanced as part of the above mentioned expansion. Once the expansion is complete, Sukira Hill will be an open pit/underground operation with production reaching 500,000 oz per year by 2012.
Stage 1 and 2 of Sukira Hill have been completed which allow for the 200,000 oz production. Stage 3 expansion is targeting an increase plant throughput to 5Mtpa and remains scheduled for completion mid 2011. This will allow Sukira Hill to produce roughly 300,000 oz in 2011.
Stage 4 Expansion will expand the plant to 8 to 10Mtpa. A scoping study continued during the previous quarter to determine the optimum process flow route for a plant expansion of up to 10Mtpa. Initial testwork has indicated a number of crushing and grinding alternatives exist to achieve this outcome. Upon completion of the study, in the second half, detailed design and costing of the preferred route as well as the ordering of long lead items will commence. Stage 4 completion is targeted to occur in 2012, which will result production of 500,000 oz per year. The total cost of the plant expansions/underground development is projected at $300 million.
In total, the Sukari Gold Project is expected to mine 142 Mt ore @ 1.4 g/t Au, producing 6.4 Moz gold.
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https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
Financials and Production
Q2 2010 Highlights:
* Gold production of 30,236 ounces was achieved from the Company’s Sukari Gold Mine
* Gold sales totalled 30,759 ounces at an average sale price of US$1,203 per ounce
* Cash operating cost averaged US$569 per ounce
* Operating profit for the quarter of US$19.1m
* Successful commissioning of the stage 2 sulphide circuit with design throughput achieved
* Record monthly mine production of 1.98Mt achieved in May
* The Sukari gold resource increased to 10.99Moz Measured and Indicated and 3.5Moz Inferred during the quarter
Production:
* 2010 - 160,000-170,000 oz gold
* 2011 – 300,000 oz gold
* 2012 – 500,000 oz gold
Centamin currently has 1.03 billion shares outstanding. The company has so many shares issued because shareholders rejected the debt financing deals that had been presented to them by several banks. As a result, the company elected to fully fund the project through equity offerings.
$35 million in cash and no debt.
Also of note, Egypt has no mining code, although it plans to release one shortly, so Centamin operates under a profit sharing agreement. Under this arrangement, Centamin is able to take all of the cash flows from the mine, less a 3 percent royalty, until its capital and exploration and operating costs have been recouped. Then Centamin will share 50% of the profits with the Egyptian Government.
Conclusion
Centamin Egypt Limited is the first and only significant developer of a modern mine in Egypt. Their flagship Sukira Hill mine will soon ramp up to 500,000 oz of gold production by 2012, thanks to an aggressive plant expansion. The underground operation will produce higher grade ore, which will enable Centamin to be a very low cost gold producer.
The company doesn’t have to pay any taxes on their profits. However, once they recoup all capital, exploration, and operating cost, then they share 50% of the profits with the Egyptian Government.
The company currently has a market cap of roughly $2.7 billion, which is probably a fair value given the current production rate and future growth profile. If they can ramp up to 500,000 oz at a cash cost under $350 per oz then shares should be at least double what they are now.
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
Centamin Egypt Limited
admin | Aug 08, 2010 | Comments 0
Centamin Egypt Limited is a rapidly growing gold producer with their flagship project, the Sukari Gold Mine, recently entering into production. With over 9 million ounces of gold reserves, the Company is implementing a rapid expansion program to increase production to 500,000 oz per year over the next three years.
Believe it or not, Centamin is the first and only significant developer of a modern mine in Egypt. The company has been exploring for gold in Egypt since 1995, and in 2005 it was granted a mining license over the massive Sukari Hill gold project.
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
Sukari Hill
Sukari Hill (believed to derive from the Arabic word for ‘sweet’ due to the quartz’s resemblance to sugar), is located within a 160 sq km license area of the Sukari Gold Project. Sukari Hill has hosted varying ancient mining communities spanning thousands of years. It was mined by the Pharaohs, the Romans and the British.
Centamin completed a Feasibility Study in February 2007 which concluded:
* Construction of a 4mtpa plant
* Producing on average 200,000 ounces per year
* Average cash operating costs of approximately US$365/oz (inclusive of 3% royalty)
* Total capital construction costs are estimated at US$265m
* 15‑year mine life
Construction commenced in Q2 of 2007 and commercial production began in June 2009. In 2010 the mine is scheduled to produce 200,000 ounces of gold at under $400 per oz. However, there are 7 million oz of gold in reserves at Sukari Hill, and a 200,000 oz operation isn’t reaching the mines full potential. So Centamin is going to be inititiating some major expansion over the next two years.
Currently Sukira Hill is an open pit mine, but an underground operation will be advanced as part of the above mentioned expansion. Once the expansion is complete, Sukira Hill will be an open pit/underground operation with production reaching 500,000 oz per year by 2012.
Stage 1 and 2 of Sukira Hill have been completed which allow for the 200,000 oz production. Stage 3 expansion is targeting an increase plant throughput to 5Mtpa and remains scheduled for completion mid 2011. This will allow Sukira Hill to produce roughly 300,000 oz in 2011.
Stage 4 Expansion will expand the plant to 8 to 10Mtpa. A scoping study continued during the previous quarter to determine the optimum process flow route for a plant expansion of up to 10Mtpa. Initial testwork has indicated a number of crushing and grinding alternatives exist to achieve this outcome. Upon completion of the study, in the second half, detailed design and costing of the preferred route as well as the ordering of long lead items will commence. Stage 4 completion is targeted to occur in 2012, which will result production of 500,000 oz per year. The total cost of the plant expansions/underground development is projected at $300 million.
In total, the Sukari Gold Project is expected to mine 142 Mt ore @ 1.4 g/t Au, producing 6.4 Moz gold.
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
Financials and Production
Q2 2010 Highlights:
* Gold production of 30,236 ounces was achieved from the Company’s Sukari Gold Mine
* Gold sales totalled 30,759 ounces at an average sale price of US$1,203 per ounce
* Cash operating cost averaged US$569 per ounce
* Operating profit for the quarter of US$19.1m
* Successful commissioning of the stage 2 sulphide circuit with design throughput achieved
* Record monthly mine production of 1.98Mt achieved in May
* The Sukari gold resource increased to 10.99Moz Measured and Indicated and 3.5Moz Inferred during the quarter
Production:
* 2010 - 160,000-170,000 oz gold
* 2011 – 300,000 oz gold
* 2012 – 500,000 oz gold
Centamin currently has 1.03 billion shares outstanding. The company has so many shares issued because shareholders rejected the debt financing deals that had been presented to them by several banks. As a result, the company elected to fully fund the project through equity offerings.
$35 million in cash and no debt.
Also of note, Egypt has no mining code, although it plans to release one shortly, so Centamin operates under a profit sharing agreement. Under this arrangement, Centamin is able to take all of the cash flows from the mine, less a 3 percent royalty, until its capital and exploration and operating costs have been recouped. Then Centamin will share 50% of the profits with the Egyptian Government.
Conclusion
Centamin Egypt Limited is the first and only significant developer of a modern mine in Egypt. Their flagship Sukira Hill mine will soon ramp up to 500,000 oz of gold production by 2012, thanks to an aggressive plant expansion. The underground operation will produce higher grade ore, which will enable Centamin to be a very low cost gold producer.
The company doesn’t have to pay any taxes on their profits. However, once they recoup all capital, exploration, and operating cost, then they share 50% of the profits with the Egyptian Government.
The company currently has a market cap of roughly $2.7 billion, which is probably a fair value given the current production rate and future growth profile. If they can ramp up to 500,000 oz at a cash cost under $350 per oz then shares should be at least double what they are now.
go to
https://sites.google.com/site/goldandsilver2012/company-reviews-by-goldstocksdaily-com/centamin-egypt-limited-1
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