Do They Steal Gold,Tantalum,Tin and Other Metals From Egypt?!

The following data and information are excerpted mainly from the puplicly published technical and annual reports issued from the foreign working companies in Egypt, related to their exploration, mining and processing activities in eastern desert. Those companies are namely as follows : Gippsland Limited, Centamin plc (plc stands for “public limited Co”) and its Subsidiaries, and the American Cresset Group, which gave up its whole share to the Cypriot Matz Holdings. The last named company produced its first experimental gold bar in the year 2007, and no available data or published to public on its website, regarding its exploration, mining and processing activities in Egypt, except some permitted data for some agreed members with an allowed password and username. On the other hand the approved concession agreements with those foreign companies- which were declared into laws from Egyptian Parliament- are not published to public or available in any governmental website including EMRA website (EMRA stands for Egyptian Minerals and Resource Authority), as if that data are all top military secret ‼

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Gippsland Tantalum and Tin of Abu Dabbab

References : Gippsland Limited Annual Report 2011

Gippsland Alluvial Tin Project updadate 3 July 2012

Gippsland Alluvial Tin Project updadate 21 August 2012

Based on an evaluation of alternative production profiles, the Company (Gippsland Limited) has proceeded with a change of scope for 44.5 million tonne Abu Dabbab Tin-tantalum-Feldspar project in Egypt from 2 million tonne per annum of Run-of-Mine ore to 3 million tones per annum of Run-of-Mine. Abu Dabbab together with the company’s nearby  Nuweibi tantalum deposit,has a combined resources base of 142.4 million tonnes. During the year, there was a 10% increase in the Abu Dabbab Ore Reserve to 33.18 million tonnes and encouraging improvement in the Abu Dabbab project economics.

Also during the year, Gippsland’s corporate  advisors, Noah’s Rule, calculated an ungeared NPV of Gippsland’s share in the project of $ 264m and an IRR of 28.4%.

Work on our Ab Dabbab Tin-Tantalum-Feldspar Project has continued including securing the relevant regulatory approvals in relation to its sea water supply, completion of a bathymetric survey of the seabed , and construction of a security wall and custom office at the Abu Dabbab Free Zone site in compliance with the General Authority of Investment requirements.

The project debt financing is amilestone that is taking considerably more time to finalise than anticipated. The political upheaval in Egypt and the ongoing turmoil in global financial markets has increased the level of difficulty in obtaining acceptable financing terms, however, we believe that the existing Off-take Agreement with the German tantalum major HC Starck GmbH together with projected tin production from the Ab Dabbab Tin-Tantalun-Feldspar Project and hopefully a more stable political situation in Egypt, will assist us to negotiate a finance package which will contribute toward the long-term success of the project.

The ten years off-take agreement between the company’s 50% owned subsidiary, Tantalum Egypt JSC and HC Starck for the supply of six million pound of tantalum pentoxide from the Abu Dabbab project remains on-foot. However, some of its terms and pricing escalation mechanism require clarification between the parties. Negotiatons in relation to these items are ongoing.

The company commenced trial mining operations at Abu Dabbab in relation to the alluvial tin deposits during the first half of 2011. This trial mining has lead to the approval of plans to commence mining operations for the processing of high grade alluvial material.

These mining operations, which are expected to commence in March 2012, are forecast to generate a net cash inflow to Gippsland of approximately US$ 3.5 million over the 17 month project life.

Overview

Gippsland’s activities are primarily focused on the Arabian-Nubian Shield, which is host to a number of world scale projects, particularly in regard to tantalum, gold, copper and volcanic massive sulphide (VMS) projects.

Gippsland’s flagship asset is te worlds class Abu Dabbab Tin-Tantalum-Feldspar project in Egypt, which also contains a financially viable alluvial tin deposit. (48 million ounces of tantalite, which is considered 4th largest in the world).

Gippsland has a controlling 50% interest in the Abu Dabbab and Nuweibi Tin-Tantalum-Feldspar deposits located near the western shore of the Red Sea cost in Egypt. These two deposits have a combined JORC compliant resource of 142.5 million tonnes.

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JORC is a code prepared by the Joint Ore Reserves Committee of The Australian Institute of Mining and Metallurgy, Australian Institute of Geoscience and Minerals Council of Australia (JORC Code)

The company commenced trial mining of the alluvial tin deposits in Ab Dabbab during the year. The results of the trial mining have led to the decision to commence mining and processing of the Wadi Quaria alluvial tin deposit which is scheduled to commence in March 2012.

The company also has an interest in eight gold prospects and one copper-nickel prospect in the Wadi Allaqi region situated to the south-east of Aswan in Egypt. Exploration of the current Wadi Allaqi Exploration licences will recommence following the granting of tenements under application.

Tantalum Market

The long predicted Shortage in the global tantalum supply is now having a dramatic effect on the international market, with a spot market price increasing from approximately US$38 per pound in December 2009 to the present price of approximately US$130 per puond.

The shortage is expected to continue through to at least 2013 by which time the Abu Dabbab Project could be in position to contribute substantially to demand with its initial production of in excess of 900,000 pounds of Ta2O5 per year, coupled with significant opportunities for production expansion should market conditions warrant. Implementation of Abu Dabbab Project would  position Gippsland as a world ranking, top tier producer of conflict-free, clean tantalum, thereby justifying Abu Dabbab as a world class deposit.

Project Finance

During October 2010, Gippsland appointed the risk and financial advisor,Noah’Rule, to assist in fund raising and financial structuring in relation to the development of 44.5 million tone Abu Dabbab Project.

Alluvial Tin Trial Mining

A programme of trial mining was commenced to assess the viability of full-scale mining of two placer tin deposits at Abu Dabbab. The placers are known as Wadi Mubarak and Wadi Quaria and are located adjacent to the Abu Dabbab Tin-Tantalum-feldspar Dposit.

The objectives of the trial mining program included the confirmation of the recoverable grade of tin and related minerals, re-evaluation of recoverable resources based on a lower cut-off-grade, validation of the simple conceptual process flow-sheet and the development of commercially sized equipment design and specification criteria.

Based on the results of the trial mining program, the Company intends to commence commercial operations at the Wadi Quaria deposit during March 2012 with a view to exploiting the resource over a 17 month operating time frame. An order has been placed for two modular IE-TEC HPC-30 units which will be utilized to process high grade alluvial material at the alluvial tin deposit. Allowing for two months sea freight, the units are expected to be on site in February 2012.

The Project is forecast to be cash flow positive one month after operations commenc, that is April 2012 and is forecast to generate US$3.5 million for the entire 17 month project life. Breakeven is anticipated approximately 10 weeks after the commencement of operations. The capital and pre-production mining costs are estimated to total US$0.6 million.

During the early 1970s a joint Egyptian Soviet expedition explored and evaluated two placer tin deposits at Abu Dabbab. The placers are known as Wadi Mubarak and Wadi Quaria and are located adjacent to the large Abu Dabbab tantalum-tin deposit. The sampling data produced by the Soviets was re-evaluated and a new resource estimation completed by Gippsland in 2008 an Identified Resource containing 759t of tin metal as shown in table 1.

Gippsland in 2008 identified an inferred Resource of 438,000 m3 of alluvium containing 759 t of recoverable tin metal. A short programme of re-sampling of the pits excavated during the early 1970s as part of the Soviet exploration programme was completed during 2009 and confirmed the presence of cassiterite and wolframite at commercially exploitable levels. (Annual report 2011) … (759 t x US$25,000 = US$ 18,975,000)

First cassiterite shipment (produced from Quaria placer mine) dispatched  to Malaysia Smelting Corporation Bhd (MSC) from mine site on 28 june 2012 with the following details : 12 Jumbo bags each 750 kg cassiterite concentrate rounded down to zero decimal points ( 9000 kg)  with 46% Sn as a provisional grade. The final grade is to be determined by independent laboratory assay. (Source: Bulletin issued 3 July 2012 by Gippsland Limited).

 Table 2 summarizes the mining contractor’s output to the end of May 2012 . Ongoing performance has been satisfactory.

Ore Processing

Screening of ROM (run of mine) ore has continued and re-screening of – 6 mm screened ore fraction was completed towards the end of june 2012. Ore processing was switched over to treatment of -2 mm feed from the start of june. Ore processing to the end of May is summarised in Table 3.

 Project Schedule and Cost

Project to date capital costs at the end of the period were $688,507 (budget US$815,797 including contingency of $135,000) (note that $ is Australian dollar); project to date direct operating costs were $460,758 (budget $639,154), indirect operating costs $209,861 (budget $139,712). Overall, capital and operating costs have therefore remained within budget.

Second cassiterite shipment dispatched to Malaysia Smelting Corporation MSC (Source : Bulletin issued 21 August 2012 by Gippsland Limited)

 

The company is pleased to advertise that a second shipment of tin concentrate was dispatched ex mine site on 30 july 2012 and shipped to MSC. The shipment  totaled approximately 9,000 kg of cassiterite concentrate independently assayed by Bureau Veritas Egypt to contain 85% SnO2 (approximately 67% Sn) with low impurities as set out in Table 4. Concentrates of this quality are readily saleable. The amenability of the material to processing and the grade of the product able to be produced using simple gravity techniques continue to exceed expectations.

 

Review of Operations

Change of Base Case Throughput Rate

Following detailed evaluation of alternative production profiles for the Abu Dabbab Project, the Company has proceeded with a change of scope for the Abu Dabbab project from 2 million tonnes per annum (Mtpa) of ROM to 3 Mtpa ROM.

At this expanded rate of production, the average annual output of products is estimated to be approximately:

·         925,000 pounds of tantalum oxide (Ta2O5) in slag;

·         2,200 tonnes of tin as tin metal; and

·         Up to 2.4 Mtpa of feldspar

 Revised pit optimization studies suggest a mine life of 13.5 years. The company has completed Whittle pit optimizations at both 2 and 3 Mtpa based on both measured, indicated and inferred Mineral Resources. In each case a number of scenarios over  a range of metal price assumptions were performed. The results indicate that the 3 Mtpa ROM option is superior to the 2 Mtpa ROM case on technical-economic and commercial (marketing) grounds.

Following review of process alternatives and corresponding forecast product specifications, the company has decided not to proceed with SynCon ( an abbreviation for synthetic concentrate, which is here a tantalum concentrate that contains 55% Ta2O5) route for the production of high grade tantalum oxide for the Abu Dabbab project. The process flowsheet will comprise conventional gravity separation after crushing and grinding of the ROM to produce a primary gravity concentrate.

 

 

 Further flowsheet optimization (more details for the above paragraph)

At Abu Dabbab, tantalite minerals have grain sizes averaging 10-100 micron with individual grains up to 600 micron whilst cassiterite grain sizes were typically 30 - 300 micron. Considerable metallurgical test work was conducted between 2002 and 2007. Much of this work was directed at reducing „sliming‟ of „fragile‟ tin and tantalum minerals in the grinding circuit that inevitably occurs with grinding of all hard-rock tin and tantalite ores.

A 2006 progressive grind test work program highlighted the significant benefits in stage grinding of the Abu Dabbab ore. The selected flow-sheet uses stage grinding with the closed circuit milling installation essentially comprising multiple grinding stages with product size material being removed at each stage by using two-stage cyclone classification (P80 150 microns and P80 90 microns) for improved efficiency. The flow-sheet was modified to include a gravity step within the milling circuit to recover coarse liberated values. The test work indicated an overall recovery of 57.4% Ta2O5 and 68.9% SnO2 for the gravity circuit. The balance of the tin and tantalum values are lost to tailings as a consequence of „sliming‟ of

tin and tantalite minerals during grinding to sizes too fine for recovery in a gravity circuit. The company has previously commissioned flotation test work, the results of which were not sufficiently encouraging to warrant continuation.

In view of the increased value of tin and tantalum oxide, Gippsland recognizes that there may be opportunities to improve overall recovery of these minerals to saleable products and to that end intends to commission a program of review of present practice and laboratory test work to evaluate the technical feasibility of recovery of fine tin and tantalite from the gravity circuit tailings stream. The trial mining program announced in March 2011 is on-going. Gippsland expects to be able to provide an update of progress by early June 2011.

Increase of Ore Reserves

The Original pit optimization and open pit mine design for the bankable feasibility study for the Abu Dabbab project was based on prices of US$ 42 per pound for Ta2O5 and US$ 7,000 per tonne  for tin. In light of the recent significant lift in the prices for both commodities, the Company decided to re-optimize the open pit design with the aim of better utilizing the total Abu Dabbab resource.

With this in mind, the pit re-optimizations were run at both 2Mtpa and 3Mtpa production rates with the following metal prices: Ta2O5 US$75 per lb and tin US$25,000 per tonne. The results of the re-optimizations pointed to improved overall project economics stemming both from the increased production rate and metal prices. Accordingly, an updating 3Mtpa open pit mine design was prepared.

The revised open pit mine design and associated production schedule supports updated Ore Reserves statement, based on a 100g/t Ta2O5 cut-off.

 The immediate increase in the Ore Reserve is in the Probable category. The remaining 8.21 Mt of Inferred Resource is expected to be upgraded to an ore reserve category as the pit deepens and additional grade control drilling can be completed. Thus the increase in the Ore Reserves is 10% and the corresponding increase in scheduled resources is 37%. 

NUWEIBI

The Exploitation Licence № 1785 covering the Nuweibi Tantalum Egypt JSC by Ministerial Decree № 5 of 2008  on 13 July 2008. The Nuweibi  deposit is located 17 to south-southwest of the Abu Dabbab deposit and 30 km inland from the Red Sea. This Exploitation Licence also has a 30-years tenure with an option of further 30 years.

The mineralization was first discovered at Nuweibi in 1944 and it was not until 1970 that the more valuable tantalum mineralization was recognized. The deposit was the subject of detailed exploration by the same joint Soviet-Egyptian team that explored Abu Dabbab. The previous work has included 23 diamond drill holes totaling 2,746 m, four surface trenches and four bulk samples which were used for metallurgical testwork.

The mineral resources at Nuweibi have been estimated by Gippsland using the ore block modeling (inverse distance squared) method at a 100g/t Ta2O5 cut-off and currently stand at combined Indicated and Inferred Resources of 98 million tonnes at 140g/t of Ta2O5.

There is the potential for a significant increase in Nuweibi mineral resources as the deposit is open at depth as well as to the east and the west. There is also a small placer resource containing tin and tantalum.

A proposed work program including diamond drilling has been approved and is expected to

commence during the December 2011 quarter, subject to the receipt of required permits.

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Wadi Allaqi

The Wadi Allaqi Project consists of nine small Exploration Licences located approximately160 km southeast of Aswan in the south-western part of the Eastern Desert of Egypt. These Exploration Licences have a total area of 144 km2. Application has been made for an exploration licences having a total area of 980 km2 and the renewal of a small Siega Licence. Exploration of the current Exploration Licences will re-commence following the granting of the tenements under application.

Exploration within the Wai Allaqi tenements has delineated an inferred Resource of 85,000 oz of gold contained in 1.1 million tonnes at a grade of 2.3 g/t Au.

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Egyptian Gold to Centamin plc

Reference: Centamin plc technical report 14 March 2012

Deposit Location :  The Sukari gold deposit is located in the Eastern Desert of Egypt at 24o56’ 50”N 34o 42’ 27”E, about 23 kilometres southwest of the Red Sea coastal town of Marsa Alam. The region has a very long history of mining and exploration carried out through all stages of history, from Pre-dynastic (Ca 3,200 BC), through Ptolemaic, Roman, Arab and British colonial to the present day.

Ownership : Centamin plc is the ultimate holding company of Pharaoh Gold Mines NL (‘PGM’). No-liability (NL) companies are differentiated from other companies as their shareholders are not liable to pay calls on unpaid shares. This differs from traditional company structure where the purchase of shares is a binding contract. Should the shareholder chose not to pay when there is a call, the shareholder forfeits both the unpaid and paid shares. This encourages investment in potentially risky mining ventures, as a shareholder with unpaid shares can chose to withdraw from the company with no legal consequences. A successful mining company usually converts to a limited liability company when advantageous.

In 1994, PGM negotiated an exploration and mining agreement (Concession Agreement), with the Egyptian Geological Survey and Mining Authority (‘EGSMA’; now the Egyptian Minerals and Resource Authority or ‘EMRA’) and the Egyptian Government, to explore for gold and associated minerals in the Eastern Desert of Egypt (Figure 1.3_1). The Concession Agreement (‘CA’) was declared into Law 222 of 1994 and came into effect on the 29th of January 1995 pursuant to which PGM had the sole right to explore and develop gold and associated metal deposits within the concession area.

On the 4 November 2001 PGM was formally notified by EMRA that in accordance with the terms of the CA the feasibility study submitted by PGM and dated the26th of October 2000 relating to the Sukari Gold Project, had been accepted by EMRA and had demonstrated the existence of a “Commercial Discovery” at the Sukari Project and that as such, in accordance with the CA, the Sukari Project had been converted to an Exploitation (Mining) Lease.

In April 2005, PGM recommenced operations on a new Exploitation Lease covering an area of 160km2, containing the proposed Sukari mine site and surrounding prospects. Under the terms of the CA, the Company has title for a period of 30 years from 24 May 2005, being the date of approval by the Minister of the area covered by the Exploitation Lease, and is renewable at the Company’s election for a further period of 30 years.

Geology

The Sukari felsic porphyry outcrop is located in an easterly dipping sequence of andesite flows, serpentinites and associated volcanoclastic sediments, mainly tuffs and epiclastics. It

strikes for 2.3km and is 100 to 600m thick. It forms a jagged-toothed, strong topographic high up to 250m above wadi level (390m ASL) (Figures 1.4_1). Wadi drainage plains pass to the east and west of the outcrop, and the sharply incised green – brown Red Sea Hills surround that. The area is arid and almost bare of vegetation.

 

 

The host to gold mineralisation is the Sukari felsic porphyry unit that contains a variable series of sub-units ranging from minor acid and felsic rhyolite and dacite to coarser grained feldspar and quartz porphyries, quartz diorites and granodiorites, dipping from moderate east in the south, through sub-vertical to slightly overturned “hangingwall” contact in the north. The porphyry units are envisaged to have formed during a more acid event in an overall intermediate environment in which some rhyolite dacite flows were later intruded by high level porphyry as a multiple event (Cavaney, 2005).

 Mineral Resources

Hellman & Schofield Pty Ltd was commissioned by PGM to undertake an estimate of recoverable resources for the Sukari gold prospect. The work satisfies the reporting requirements of the JORC (2004) and CIM (2004) guidelines for reporting mineral resources.

 Estimation of recoverable resources has been undertaken using Multiple Indicator Kriging with block support adjustment. The method estimates the histogram of drillhole sample grades in large panels (20m east x 25m north x 6m elevation), using variograms of gold grade indicators at 14 thresholds. The size of model panels was based on drillhole spacing. A block support adjustment was then applied to estimate the histogram of grades of selective mining units in each panel. For Sukari, a selective mining unit measuring 4m east x 8m north x 3m elevation has been assumed. The shape of the local block gold grade distribution has been assumed lognormal and an additional adjustment correction for Information Effect has also been applied, to make allowance for the fact that ore selection will be based on an estimate of the grade of a mining block generated from grade control sampling, not perfect knowledge of block grades.

The recoverable resources within each panel have been allocated a confidence category based on the spatial distribution of samples in the Kriging neighbourhood. This classification scheme takes into account the uncertainty in estimates resulting from the proximity and lo-

cations of the informing samples.

Recoverable gold resources at Sukari, estimated to approximately 1,350 metres depth below surface (surface is defined as the initial topography which includes mountain and base ground below mountain) are shown in the following Table 1.5_1. The resources shown have been adjusted to the end of September 2011 mining surface and for underground mining voids.

1.    The resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction.

2.    Measured resources lie in areas where drilling is available at a nominal 25x 25 metre spacing; Indicated resources occur in areas drilled at approximately 25x 50 metre spacing and Inferred resources exist in areas of broader spaced drilling.

3.    The resource model extends from 9700 mN to 12200 mN and to a maximum depth of 2mRL (a maximum depth of approximately 1050 meters below wadi level).

Mineral Reserve

The Mineral Reserves for the Sukari Gold Project were estimated by Runge and PGM. This Mineral Reserve estimate was based upon the Mineral Resource estimate prepared by H&S in September 2011.

The resource model contains an allowance for dilution within the limits of the chosen SMU. To date, only a small amount of ore has been mined and as such the reconciliation results from this ore to be representative of the resource estimate. It is assumed that the resource estimate contains the appropriate dilution allowance and that ore recovery is 100% of the estimate.

The Sukari pit will produce ores of varying stages of weathering. The processing costs are expected to vary with the extent of the weathering and hence the cut-off grade applied also varies with the weathering state. The processing cut-off grades for the Oxide, Transition and Sulphide rock types were 0.28 g/t, 0.38 g/t and 0.35 g/t, respectively.

The Sukari pit will be developed in a number of Stages and the Mineral Reserve is tabulated in Table 1.6_1

 Notes to the Table:

(1) Includes:

Open Pit reserves totaling 266.6Mt @ 1.09 g/t

Underground reserves totaling 1.1Mt @ 16.30 g/t

Surface stockpiles totaling 9.4Mt @ 0.57g/t

(2) Based on as mined surfaced as at 31 December 2011

(3) Ultimate open Pit design has a waste to ore ratio of 5.6:1

(4) Announced 15 September 2010 at $900/oz Au

The total Mineral Reserves at Sukari were estimated at 277 Mt of ore at an average grade of 1.13g/t Au for 10.1M contained ounces of gold.

The Mineral Reserves that have been declared are based on a gold price of US$1100/oz and a gold cut-off grade of 0.28g/t Au for oxide and 0.38g/t for Transition and 0.35g/t for sulphide material.

The work satisfies the reporting requirements of the JORC(2004) and CIM (2004) guidelines for reporting mineral resources.

Competitive Position in Egypt

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.

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.

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 kilometres 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.

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 metres below the wadi surface level.

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 above table No5 outlines the proposed circuit and actual recovery predictions for each ore mix.

Notes to the above table No 5:

·         CIL is an abbreviation to Carbon-In-Leach process.

·         Arsenopyrite (FeAsS) serves as an indicator of gold bearing reefs. It is generally intimately intergrown with pyrite and minor amounts of other sulphides.

Mining Operations

The Sukari Project, based on a 10 Mtpa process plant coming on stream in 2013, is scheduled for open pit mining with a 25-year mine life. Current reserves of 277 Mt ore @ 1.13 g/t Au is expected to be mined, producing 10.1 Moz gold. The open pit waste to ore strip ratio of 5.6:1.

Ore and waste is mined using conventional open pit mining methods. The operation utilizes selective mining techniques to separate ore and waste. Provision has been made for drilling and blasting all primary and oxide materials. Ore is 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 5 Mtpa process plant throughput rate.

Mining is progressed at an increased rate compared to processing; approximately 10 Mt of ore is mined and 5 Mt of ore will be processed annually. Operating at an increased mining rate allows the cut off grade for feed to the plant (referred to as “cutover” grade) to be increased in the early years of the schedule. This in turn increases the metal output and project revenue in these early years, thus increasing the discounted operating surplus cash flow.

Centamin owns and operates its mining fleet. The production fleet is based on 380 t class excavators and 150 t class rigid body trucks. At full production, four production fleets, each comprising a single excavator and sharing a maximum of 20 trucks, will be required.

Processing

The process route entails:

·         crushing;

·         stockpiling crushed ore;

·         grinding;

·         flotation of a (bulk sulphide) concentrate containing the precious metals;

·         thickening of the concentrate;

·         fine milling of the concentrate;

·         leaching the precious metals from the concentrate in a dilute cyanide solution;

·         adsorbing the precious metals onto activated carbon;

·         stripping the precious metals from the carbon;

·         recovering the precious metals as gold doré; and

·         placing the concentrate tailing in the tailings storage facility.

Note : A doré bar is a semi-pure alloy of gold and silver, usually created at the site of a mine. It is then transported to a refinery for further purification. The proportions of silver and gold can vary widely. Doré bars weigh as much as 25 kg.

Tailings from the treatment of weathered oxide ore early in the mining schedule contain too much gold to discard. Hence, the bulk flotation tail is further treated by:

·         thickening;

·         leaching the precious metals into a dilute cyanide solution;

·         adsorbing the precious metals onto activated carbon;

·         stripping the precious metals from the carbon;

·         recovering the precious metals as gold doré; and

·         placing these tailings in the tailings storage facility.

Process plant unit operations and flows are depicted in Figure 2.

Processing routes:-

·         Stage 1 - Whole ore direct cyanidation of “oxide ore” (M5).

·         Stage 2 – Flotation of “mixed ore” with separate cyanidation of reground concentrate and flotation tail (M2, M3 and M4).

·         Stage 3 – Flotation of “sulphide ore” with cyanidation of reground concentrate and discarding flotation tail (M1).

 

 

 

 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 layout of the project infrastructure is shown in Figure 3.

Process water is drawn from the Red Sea. The seawater is pumped approximately 25 km to the mine site to satisfy all process plant and mining requirements. Most of the seawater is pumped into a raw water pond located near the processing plant, whilst around 500m³/day is pumped to a water treatment plant for potable and fresh water supplies.

Power is generated on site by a 28 MW power station, operated on heavy fuel oil.

A construction camp facility for up to 800 employees has been completed at the Sukari Project.

The Company is currently expanding the Processing Plant to a throughput capacity of 10MTPA, in line with the forecast expansion of mining activities in 2012 and beyond. The “Stage 3’ 5MTPA Process Plant was completed in July 2012.

Sukari Project Expansion

Stage 4 Expansion – 10Mtpa

Design for the Stage 4 expansion, continued during the period by GBM Minerals Engineering Consultants (UK) who have been awarded the EPCM for the project. Construction of the expansion commenced in late 2011.

 (Note : EPCM stands for Engineering, Procurement, and Construction Management)

The Stage 4 expansion will incorporate additional milling, flotation and thickening capabilities to the process plant as a parallel processing route, as well as upgrading the existing regrind circuit. The plant expansion is designed to increase the nominal capacity of the process plant from 5.0Mtpa to 10.0 Mtpa.

Secondary crushed ore with a P80 of 50 mm - (80% of the crushed product by wt. passed having -50mm size)- will be transferred to a second crushed ore stockpile prior to grinding through a new milling circuit. The new milling circuit will be a two stage circuit, consisting of a SAG mill and ball mill, with hydrocyclone classification and pebble crushing facility. The circuit has been designed to operate 24 hours day, seven days a week with an utilization of 91.3% and a nominal throughput rate of 625 tph.

Milled ore with a P80 of 150μm will report to a new flotation circuit to recover the bulk sulphide concentrate. The concentrate will be thickened and discharged to an upgraded regrind circuit, capable of treating up to 100tph of concentrate to achieve a final milled P80 of 10μm. The regrind circuit will combine the two concentrate streams from each of the separate flotation circuits. The regrind product will be treated through the two CIL circuits in series to maximise leach circuit residence time.

The flotation tails of the new circuit will be thickened and discharged to the tailings storage facility. It is expected that the ore treated through the new flotation circuit will be predominantly sulphide based ore, amenable to recovery by flotation. Any ore that may be oxide or transitional in nature will be treated through the existing processing circuit by adjustment of the crushed ore product splits to each of the crushed ore stockpiles.

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Hamash Gold Mines

Location: Hamash mine is located 100 Km west Marsa Alam in the Eastern Desert.

Company: Hamash Egypt for Gold Mines is a joint venture company between the Egyptian Mineral Resources Authority and the American Cresset, which gave up its whole share to the Cypriot Matz Holdings. It produced its first experimental gold bar in 2007.

 Method of extracting gold: In Hamash gold mine, gold is extracted by heap leaching, which relies on heaping the rocks containing gold after crushing them and then they are irrigated with a chemical solution which dissolves gold. The leach solution containing the dissolved metals is then collected. The gold is then extracted by an electrical and mechanical method. This method needs a sufficient period of time to let the leaching solution extract most of the gold found in the rocks.

Total Production: The total of the gold produced from melting and casting gold deposits, resulting from the electro refining process since the start of the commercial production till February 2010, reached about 65 kg of gold. The Hamash Company's 2010 plan indicates the possibility of producing 15 thousand ounces (425 kg) of gold during the fiscal year 2010.

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Atef Helal 10-Sep-2012

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