Tag Archives: Centamin

First of two Cat 6040 shovels head to Centamin’s Sukari gold mine

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Mantrac Egypt says it has completed the assembly, commissioning and handover of a Caterpillar 6040 BH hydraulic shovel to Centamin’s Sukari gold mine in the country.

This is the first of two new excavators heading to the operation.

The Cat dealer said: “With gross power over 2,000 hp (1,491 kW) and approximately 40 t bucket payload, more volume of material will be moved and at lower cost per tonne.”

Back in December, Centamin said it would soon be adding new Cat 6040 hydraulic face shovels to its existing fleet at Sukari. This is part of a plan to position Sukari to reliably produce 450,000-500,000 oz/y of gold at all-in sustaining costs below $900/oz sold from 2024. This has also seen Centamin take on Capital Ltd as open-pit waste mining contractor.

These new shovels are included in the company’s financial year 2021-2023 capital expenditure plans. Also included is a 36 MW solar plant, an explosives contract and the addition of lightweight truck trays.

Capital builds up mining fleet for Sukari gold mine work

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Capital is well on the way to securing a suitable fleet to carry out the open-pit waste mining contract at Centamin’s Sukari gold mine, with additional trucks recently arriving in Egypt and payments “significantly progressed” for all major long lead equipment required to service the operation.

Equity proceeds from the recent $40 million share placing were received in late December 2020, facilitating these further payments, according to Capital.

The 120 Mt open-pit waste mining contract at Sukari will see Capital provide load and haul and ancillary services over a period of four years. At the same time, the existing drilling contract at Sukari has been extended to December 31, 2024, (from September 30, 2023) and expanded by nine additional blasthole rigs, bringing the rigs operating at Sukari to 24 in total.

Included in the long lead items are 17 Cat 785 dump trucks, seven blasthole drill rigs, three excavators, and all major ancillary support equipment including dozers, graders and water trucks. Capital said additional trucks had recently arrived in Egypt, supplementing the initial truck fleet that arrived during the December quarter of 2020.

Capital also said it has made substantial progress on several of the debt facilities contemplated in the capital raising prospectus related to the Sukari contract including:

  • Executing the $2.6 million vendor finance agreement with Epiroc with full draw down against the purchase of three new blasthole rigs;
  • Fully drawing down on the remaining tranches of the $10 million Macquarie facility following finalisation of the Sukari contracts and security registration in Egypt; and
  • The committed and available vendor finance facility with Sandvik for $8.5 million is expected to be used over the course of the March quarter against the purchase of four new blasthole rigs.

Jamie Boyton, Capital Executive Chairman, said it was pleasing to note that site activity was progressing well with the continued expansion of its extensive on-site facilities, “further asset arrivals and the recruitment of key personnel to prepare for the commencement of preliminary mining activity in late Q1 (March quarter) as planned”.

Capital to take on open-pit waste mining at Centamin’s Sukari gold mine

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Capital Limited has entered a conditional open-pit waste mining services contract with Sukari Gold Mines and has also expanded and extended its existing drilling contract with Sukari.

Sukari is the operating company for the Sukari gold mine, in Egypt, one of the largest gold mines in Africa and the principal asset of Centamin.

Collectively, the contracts are anticipated to deliver incremental revenues of $235-260 million over a four-year period, commencing January 1, 2021, representing the largest award of new business in the company’s history.

The 120 Mt open-pit waste mining contract at Sukari will see Capital provide load and haul and ancillary services over a period of four years. At the same time, the existing drilling contract at Sukari has been extended to December 31, 2024 (from September 30, 2023) and expanded by nine additional blasthole rigs, bringing the rigs operating at Sukari to 24 in total.

To date, Capital has spent $23.4 million towards equipment and has made strong progress with early works, key personnel hiring and advanced operational planning, it said. It has also signed an OEM facility with Sandvik for $8.5 million and an OEM facility with Epiroc is awaiting final credit approval with documentation in near final form.

Jamie Boyton, Executive Chairman, said: “The winning of the tender for the Sukari open-pit waste mining contract is a significant milestone for Capital – it is the largest contract win for the group since inception, adds substantial scale to our mining services division, as well as providing revenue diversification from our drilling services business.

“We are also pleased to have increased the scope and scale of our existing drilling contract. Having operated at the Sukari mine since 2005, which started commercial gold production over a decade ago, Capital is pleased to be deepening further its strong client relationship with Centamin in assisting with the generation of significant value to Centamin over the medium and longer term as the Sukari mine enters its next phase of gold production.”

Martin Horgan, CEO of Centamin, said: “With the focus on improving operational flexibility at Sukari, introducing contract mining over the next few years for waste stripping in the open pit is cost and time effective. Following a rigorous tender process, Capital was determined to be the best suited to deliver what is needed.

“Capital is a trusted contractor to the company, with a strong understanding of Sukari and the operating environment, including the employment of local workforce and established training programs, consistent with Centamin’s approach to local workforce development.”

As part of this increased open-pit waste stripping program, Centamin continues to use its existing owner operator fleet, which has capacity of 80-90 Mt/y total material moved (ore and waste). The company said it conducted an independent contract mining tender process to assess incremental contract waste stripping costs, and capacity, against the cost to expand the current owner-operator mining fleet.

Centamin added: “It was concluded that the optimal integration of contract mining was to isolate the waste stripping workstream on the East wall of the open pit, thereby limiting the day-to-day interaction with the operations and simplifying operational oversight and planning from a health, safety and logistical standpoint. The East wall waste stripping program will move material to a dedicated waste dump.”

Centamin sets up Sukari for a solar power-fuelled future

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Among new projects featured in Centamin’s just-released 2019 sustainability report is the development of a solar power installation that could pump 30 MW AC of renewable energy into the mix at its Sukari gold operation in Egypt.

The Stage 1 30 MW solar plant is expected to replace 18–20 million litres of diesel consumption per year through operation during daylight hours, according to Ross Jerrard, Chief Financial Officer and Executive Director.

The bulk of Centamin’s greenhouse gas emissions result from the on-site power generation at Sukari, the company said in the report, with the site powered entirely by heavy fuel oil burning generators consuming over 90–100 million litres of diesel to meet the mine’s electricity needs. MAK and Wartsilla diesel-fired generators, with a combined power of 68 MW, are on site, according to the company.

In 2019, Centamin completed a preliminary study assessing the technical viability of integrating a solar plant at the Sukari mine. The results of the study demonstrated the potential of the project to materially reduce the consumption of fossil fuels and thereby reducing the company’s environmental footprint and operating expenditure, it said.

The study indicated a minimum of 36 MW DC/30 MW AC peak power hybrid solar plant would be the optimal capacity for an initial staged integration to the processing plant. A limited amount of battery storage (7.5 MW) is required to manage start up and shut down surges for integration into the existing site distribution and control systems, with the solar farm scoped over an 85 ha site on the Sukari tenement.

The project will be developed in two phases:

  • Phase one will require the upgrade of Sukari’s high voltage distribution system to prepare the system for connection of large scale solar; and
  • Phase two will be the construction, installation and connection of the solar photo voltaic plant to the Sukari electrical distribution system.

Centamin estimates up to 25% of Sukari’s power needs could be met through solar generation, with the initial 30 MW plant planned to be engineered with the ability to expand the power capacity in the future, if appropriate.

The construction spend for 30 MW is expected to be $37 million, with initial capital of $6 million committed at the end of 2019 to upgrade the high voltage reticulation on site and commence earth-clearing works in the first half of 2020.

Construction was scheduled to commence in 2020, however, as a precautionary move to protect the health and wellbeing of the workforce, non-essential 2020 capital expenditure was temporarily deferred, including the Sukari solar plant.

“This is in order to minimise contractors and other non-operating traffic on and off site, while restrictions related to COVID-19 remain in place,” the company said. Despite this, the company still plans to integrate solar power into the Centamin mine in 2021.

Centamin said it continued to work towards reducing emissions intensity and is in the process of establishing science-induced absolute emissions targets for medium- (2025) and long-term (2030) target years.

Other carbon reduction strategies being considered by the miner include transitioning on-site vehicles to electric vehicles and alternative truck buckets to improve hauling efficiency, it said.