Centamin shifts to owner-operated model for Sukari gold mine

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Centamin shifts to owner-operated model for Sukari gold mine

Centamin, Egypt-focused gold miner has shifted underground operations at its flagship Sukari mine from a contractor to an owner-operated model. The firm explained that the move follows the expiry of a five-year contractor deal.

“This change will deliver significant cost savings of $19 million per year from 2023 onwards and improve operational control and mining flexibility, whilst also enabling the company to upskill the local workforce. A detailed transition plan to owner-operator mining is in place with implementation underway, including utilising a third-party underground mining specialist to assist with workforce training,” the company said.

Sukari, which began operations in January 2010, comprises a large open pit and an underground mine. The gold mining company said the decision to become owner had been based on several factors, an important one being the 200% increase in underground proven and probable reserves at Sukari, as announced in December.

Transition plan

The underground mine currently has eight years left of productive life, but Centamin has identified near-term drill targets to extend it beyond 10 years by the end of 2022. The model switch was also based on the strengthened operational leadership at Sukari, following investment in highly skilled local professionals.

Centamin has a detailed transition plan to owner-operator mining underway, which includes hiring a third-party underground mining specialist to assist with workforce training. It had awarded Toronto-based exploration drilling firm Geodrill a five-year contract to drill a minimum of 90,000 metres per year using five rigs. Geodrill said in a separate statement the contract was the largest in its history and would be worth at least $54.5 million.

The firm is buying the current underground mining fleet from the incumbent contractor. The acquisition has pushed up the company’s 2022 capex by $10.5 million to $225 million. Sukari, Egypt’s sole gold-exporting mine and the first large-scale modern gold operation in the North African nation, contributes up to $900 million a year to the country’s gross domestic product.

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