One of West Africa’s leading drilling companies, Geodrill, announced that it has secured a major five-year drilling contract with Centamin (LSE:CEY) for its Sukari mine. The Toronto-based drilling and exploration company reported that the contract is for a minimum of 90,000 meters of subway exploration and grade control drilling per year using five drill rigs. 

Dave Harper, Geodrill’s president and chief executive officer, said, “The award of this contract to Geodrill is a testament to our operating performance, reputation for excellence and is in line with our strategy to focus on long-term contracts with blue chip clients in new geographic regions that drive future growth of our business.”

Sukari

The Sukari mine is a low-cost bulk tonnage open pit high-grade subway bulk tonnage gold mining operation located in Egypt. Centamin considers Sukari to be the largest and most important gold mine in the country as well as the company’s core asset. 

Sukari produced its first gold ingot in 2009, which was a critical event in Centamin’s history and in the modern Egyptian mining industry. To date, the mine has produced over 4 Moz of gold representing US $1 billion of cash flow. 

The company expects revenues in excess of US $54 million to be generated from the contract over the life of the contract as well as expanding its operating footprint into a new geographic region. 

“Our business with Centamin not only complements our existing work, but will also help us counter cyclical industry downturns while providing a significant and stable long-term revenue base over the next 5 years.” added Harper. 

Centamin is also working to advance its Doropo project located in northwestern Côte d’Ivoire, which consists of seven exploration permits covering an area of approximately 1,850 km2. The company commenced exploration of the Doropo project in late 2015, reaching a mineral resource estimate of 5M oz in 2021. 

Centamin’s African Portfolio

Centamin is the mining company whose principal asset is the Sukari gold mine, a long-life underground and open pit bulk tonnage operation. It is considered one of the largest producing mines in the world with a planned production of over 400,000 ounces per year with a mine life of 12 years. The company recognizes its responsibility not only to deliver operational and financial performance, but also to create a lasting benefit for the company and its shareholders through good corporate citizenship. Centamin has existing operations in Egypt, Burkina Faso and Côte d’Ivoire and an active portfolio of future growth prospects. Its assets include the Sukari mine, the Doropo Project, the Batie West Project and the ABC Project, with Sulkari being its capital focus while steadily unlocking value from its highly prospective West African land package. 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.