CENTAMIN, the UK-listed gold producer, said it would convert to owner-operator mining at its Sukari gold mine in Egypt, a step that would save it $15m a year in contractor costs.
The move to self mining was partly motivated by a 200% increase in proven and probable reserves at Sukari’s underground section, said Martin Horgan, CEO of Centamin. Annual savings would be booked from 2023 and are benchmarked against 2021 costs.
“Following a 200% increase in underground reserves with further identified growth opportunities and an underground expansion study underway, we believe this move best places us to extract the maximum value safely, efficiently and cost-effectively from the expanding underground operations,” he said.
A third party specialist drilling firm Geodrill has been awarded a five-year contract to assist Centamin with the development of Sukari’s underground resources.
Centamin said it had also executed its contractual right to purchase the current underground mining fleet from the incumbent contractor for a total capital cost of $10.5m to be paid this (first) quarter of the 2022 financial year.
Moving to owner-operator mining would also help in the upskilling of local employees. In addition, a development programme of Sukari’s underground resources could extend its life of mine ten years. A study is due for completion in the second half of this year.
Centamin produced some 415,370 ounces of gold for its 2021 financial year, achieving the midpoint of its guidance of 400,000 to 430,000 oz. Gold production guidance for 2022 was 430,000 to 460,000 oz at an all in sustaining cost of $1,275 to $1,425/oz sold.
