Centamin reports on historic quarter

It was a historic quarter for Centamin Egypt (CEE-T, CEY-L) as it marked the first gold production from its massive Sukari project in the North African country.

The successful start up had Josef El-Raghy, Centamin’s chief executive, saying that the company is lined up to reach its target production of over 200,000 oz. of gold for 2010.

In total 140,000 tonnes of ore was processed in the fourth quarter of last year at an average head grade of 1.11 grams gold. The recovery rate came in at 70.6% with a total of 1,118 oz. of gold being produced.

While all of that ore came from the open pit operation, the company plans to bring ore from underground on line soon as well.

Centamin has pushed its “Amun” decline down to a depth of 147 metres and it believes it will have access to the orebody the end of 2010 with production from the zone following in early 2011.

The initial underground mining rate is slated to come in at 500,000 tonnes per year at a grade between 5 and 10 grams per tonne gold.

Over at the open pit – where all of current production comes from – the mining rate is also being ramped up.

Amidst all the activity, Centamin still managed to increase both its reserves and resources at Sukari.

Open pit reserves increased to 7.1 million ounces from 6.4 million ounces, and now comes in at 159.3 million tonnes grading 1.39 grams gold.

The project’s resource estimate also received a health bump with 374,000 oz of gold added to the measured and indicated category and 175,000 oz added to the inferred.

Measured and indicated resources now stand at 210.2 million tonnes grading 1.52 grams gold for 10.29 million oz. while inferred resources come in at 66.3 million tonnes grading 1.6 grams gold for 3.4 million oz.

Those upgrades came on the back of roughly 15,000 metres of diamond drilling.

But Centamin isn’t done with the drill yet. The company says there are still eight drill rigs on the site that are continuing to do resource definition work on the Hapi, Amun Deeps and Pharaoh zones.

As for adding new ounces to the projects already considerable heft, Centamin is continuing with its regional exploration program, which is currently focused mainly on an area known as the Quartz Ridge.

Centamin put 16 holes for 1,436 metres into what it calls the main quartz vein structure where it confirmed a mineralized quartz vein shear zone structure highlighted by intersections of 19 metres grading13.7grams gold; 16 metres grading 8.16 grams gold; 21 metres grading 4.19 grams gold; and 45 metres grading 2.11 grams gold.

All results came from separate holes and at relatively deep depths of between 325 metres and 804 metres.