centamin egypt limited197 st george’s terrace 54 elbatal ahmed abdel aziz street perth wa 6000...

CENTAMIN EGYPT LIMITED ABN 86 007 700 352

Annual Report

30 June 2004

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COMPANY PARTICULARS......................................................................... 1

CHAIRMAN’S REPORT............................................................................... 2

REVIEW OF OPERATIONS......................................................................... 3

DIRECTORS’ REPORT.............................................................................. 16

CORPORATE GOVERNANCE STATEMENT............................................ 23

INDEPENDENT AUDIT REPORT .............................................................. 27

DIRECTORS’ DECLARATION................................................................... 29

STATEMENT OF FINANCIAL PERFORMANCE....................................... 30

STATEMENT OF FINANCIAL POSITION.................................................. 31

STATEMENT OF CASH FLOWS............................................................... 32

NOTES TO THE FINANCIAL STATEMENTS............................................ 33

ADDITIONAL ASX INFORMATION ........................................................... 53

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 COMPANY PARTICULARS _____________________________________________________________________________________________________

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CCOOMMPPAANNYY PPAARRTTIICCUULLAARRSS DIRECTORS Mr Sami El-Raghy Chairman Mr Josef El-Raghy Managing Director Mr Colin Cowden Non Executive Director Mr G Brian Speechly Non Executive Director Dr Thomas Elder Non Executive Director COMPANY SECRETARIES Mr Dennis Franks Mrs Heidi Brown EXPLORATION Mr Michael Kriewaldt PROJECT MANAGER SENIOR MINE GEOLOGIST - SUKARI Mr Harry Michael Mr Richard Osman PERTH OFFICE MANAGER GENERAL MANAGER - EGYPT Mr John Lynch Mr Youssef El-Raghy HEAD OFFICE EGYPT OFFICE 57 Kishorn Road 356 El-Horia Road Mount Pleasant WA 6153 Sidi Gaber Australia Alexandria, Egypt Telephone: + 61 8 9316 2640 Telephone: + 203 5411 259 Facsimile: + 61 8 9316 2650 Facsimile: + 203 5411 718 Website: www.centamin.com.au BANKERS National Australia Bank Limited MISR International Bank 197 St George’s Terrace 54 Elbatal Ahmed Abdel Aziz Street Perth WA 6000 Cairo, Egypt AUDITORS Deloitte Touche Tohmatsu Level 16, Central Park 152-158 St George’s Terrace Perth WA 6000 UNITED KINGDOM NOMINATED BROKER & ADVISOR Williams de Broë Plc 6 Broadgate London EC 2M 2RP United Kingdom LOCATION OF REGISTER OF SECURITIES Advanced Share Registry Services Computershare Investor Services Level 7, 200 Adelaide Terrace PO Box 82 The Pavilions, Bridgewater Road Perth, WA 6000 Bristol BS99 7NH England Telephone: + 61 8 9221 7288 Telephone: + 44 0870 702 0003 Facsimile: + 61 8 9221 7869 Facsimile: + 44 0870 703 6116 STOCK EXCHANGES The Company is listed on the Australian Stock Exchange and the Alternative Investment Market of the London Stock Exchange. The Home Exchange is Perth.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 CHAIRMAN’S REPORT _____________________________________________________________________________________________________

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CCHHAAIIRRMMAANN’’SS RREEPPOORRTT Dear Shareholders Once again, it is my pleasure to present to you the annual report of the Company for the year ended 30 June 2004. Last year I outlined to you that for the first time our development activities in Sukari were interrupted, the reason for the interruption and the steps taken by the company to correct this situation. While the company remains frustrated by this continued disruption, I am happy to report that a number of positive actions have recently been taken by the Egyptian Government. The restructuring of the Egyptian Cabinet saw the removal from office of the Minister for Industry and Technology who was responsible for the Egyptian Geological Survey and Mining Authority (EGSMA) and, in turn, our activities. The overhauled Cabinet is pro reform and foreign investment is expected to increase again in Egypt as a result. Throughout the dispute, we have received tremendous support from many sections of the Egyptian Government, Parliament, Police, Army, Intelligence, Internal Security Department and the media. Pioneering a new industry in an emerging market economy such as Egypt, is a trying business that requires patience. Your Company has established itself in such an environment and has the opportunity to develop a series of world class projects, which will one day, put it in the forefront of gold producing companies. It also has the people who have the commitment and resolve to make this a reality. At Sukari, we have nearly 3 million ounces of gold defined in only the southern sector of a large mineralised system. We have seven drill rigs ready to re-commence activities and continue to grow this resource. To take this project into production in the shortest possible time, a development team has been assembled and is led by our Project Manager, Harry Michael and includes Ausenco, Hellman & Schofield, Australian Mining Consultants, Knight Piesold, George Orr and Associates, Aquaterra, Geocentric and other reputable international consulting organisations. In addition to the Sukari deposit there are other prospects contained within the Sukari area, including Umm Ud, Hangaliya, Atud and Sabahiya as well as two newly discovered porphyry hills similar to Sukari. All these deposits will be tested and we hope, eventually supply ore to the proposed Sukari central treatment plant. At Barramiya, a major mineralised system has been outlined by your Company which is capable of hosting a world class ore body. The Company will start shortly investigating this system as well as the numerous satellite deposits around it. In the northern area of the concession, the Company has outlined prospects with significant potential around the historic mines of Abu Marawat, Semna, Erediya, Atallah, Fawakhir, Hamama and El-Sid, plus a very prospective 80km long shear zone with the potential of hosting similar styled deposits. I fully appreciate that the year has been difficult for our shareholders, employees and project financiers, but in time we will look back on these days and be justifiably proud of our persistence, resourcefulness and commitment to the task of re-establishing Egypt as a gold producing nation. I would like to acknowledge my management and staff in Australia and Egypt for their efforts throughout the year. The Board also acknowledges the continuous support in Egypt from those individuals who have the interest of the Egyptian mining industry at heart and who recognise the company’s efforts in pioneering such a major exploration and mining effort. Finally, I would like to thank the company’s major shareholders and Williams de Broë Plc in London for their continuing support. I look forward to welcoming you to the Annual General Meeting of the Company. On behalf of the Board

Sami El-Raghy Chairman

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 REVIEW OF OPERATIONS _____________________________________________________________________________________________________

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RREEVVIIEEWW OOFF OOPPEERRAATTIIOONNSS Following the signing in 1995 of the Concession Agreement between the Egyptian Government and the company’s wholly owned subsidiary, Pharaoh Gold Mines NL (PGM), a comprehensive review of all the available geological data relating to the numerous prospects within the Eastern Desert Concession was undertaken. In the period 1995 through 1997 extensive geological mapping, prospecting and sampling was carried out in the three main areas of the concession, namely Sukari, Abu Marawat and Barramiya. An operations base was established at Marsa Alam with field camps in the three areas. These preliminary work programmes outlined numerous prospects with favourable geological settings with the potential to host large mineralised systems warranting follow-up detailed investigation.

The Sukari Project was selected as the first project for development due primarily to its proximity to infrastructure. The Sukari Gold deposit is centrally located within the Sukari area of the Concession and thus any process plant development will likely be within economic trucking distance from the many prospects identified within these boundaries. Cashflow from the proposed Sukari operations will be used to develop these other nearby prospects on a staged basis, as potential long term sources of feed for the planned Sukari processing plant. It is the company’s intention to replicate the concept of a centralised processing plant on both the Abu Marawat and Barramiya areas.

Egypt – Concession location

Preliminary results from exploration work carried out on some of the other prospects contained within the Sukari concession are set out in this report and provide considerable support for this proposed growth strategy and the need to consider developing the Sukari project to provide such flexibility and capacity. Sukari Mapping that has been completed over the accessible areas of the Sukari porphyry shows the mineralised quartz veining in detail and highlights the zones of intense alteration, particularly in the Gazelle zone which is expected to host significant resources of gold when fully drilled. Gold at Sukari is contained in fractured zones in a composite body of felsic rocks known as the Sukari porphyry, which is considered to be part of a late Proterozoic, weakly-metamorphosed, andesitic sequence. Long-lived faulting with accompanying intrusions of mafic and ultramafic rocks, and metasomatism affect the sequence.


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The host to gold mineralisation at Sukari is a porphyry body about 2.3 km long in outcrop, and from 100 to 600 metres wide. The porphyry body is dominantly feldspar and quartz porphyries with minor rhyolite and dacite. Various combinations of albitization, silicification and sericitization extensively alter the Sukari

porphyry. These are pre-mineralisation. In places in the altered rocks there are disseminated cubes of pyrite. Gold mineralization at Sukari is commonly localised in brecciated porphyry occurring as tabular zones of crackle-breccia with quartz and fine-grained pyrite as matrix to the breccia. At the southern end of the deposit there are auriferous zones dipping about 40 degrees easterly, whereas at the northern end the dip is about 30 degrees to the west. In the centre of the body there are auriferous zones dipping to the east and others to the north. In addition auriferous fracture zones have been recognised in the Amun zone, dipping to the west. There is also significant gold mineralisation in rocks within a kilometre of the Sukari porphyry.

Sukari Porphyry - Drilling Progress Sukari Drilling The company has 7 drill rigs on site. It is intended that the larger rigs will resume infill drilling over the Amun Zone with approximately 10,750m of diamond and RC drilling planned, along with continuing the step out drilling into the Ra and Gazelle zones. After mapping and incorporation of available data it is planned to move the smaller rigs and progressively commence exploration drilling over the outlying prospects.


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Sukari Resource To date, approximately 66,000 metres of drilling has been completed at Sukari and has delineated the following resources:- Gold Resource Estimate by category including uncut Hapi Shoot

Measured Indicated Inferred Total Gold Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t M Tonnes g/t M Ounces 0.5 14.79 1.29 25.68 1.35 24.06 1.72 64.63 1.48 3.062 1.0 7.17 1.91 13.23 1.94 13.03 2.57 33.43 2.18 2.341

Gold Resource Estimate by category including cut Hapi Shoot

Measured Indicated Inferred Total Gold Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t M Tonnes g/t M Ounces 0.5 14.79 1.29 25.68 1.33 24.06 1.59 64.53 1.42 2.944 1.0 7.17 1.91 13.23 1.91 13.03 2.32 33.43 2.07 2.223

Cut Hapi Shoot Resource

Measured Indicated Inferred Total Gold Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t M Tonnes g/t M Ounces 0.5 - - 0.044 8.9 0.109 19.6 0.153 16.5 0.082

Uncut Hapi Shoot Resource

Measured Indicated Inferred Total Gold Cut off M Tonnes g/t M Tonnes g/t M Tonnes g/t M Tonnes g/t M Ounces 0.5 - - 0.044 18.6 0.109 49.3 0.153 40.4 0.200

Previous infill drilling in the Amun zone has resulted in some inferred resources being re-classified into measured and indicated as well as outlining additional inferred resources and it is expected that this trend should continue with future infill drilling. The cost per resource ounce of gold discovered to date is less than US$5.00. Utilising this resource base, a scoping study was completed by Ausenco Limited to determine which throughput capacity, process design flow sheet and degree of mining selectivity would best optimise the Sukari project economics. The Scoping Study was conducted on 3, 4, and 5 million tonne per annum scenarios. The results of the study indicate that the higher process capacities, flotation followed by regrinding and leaching of concentrate (subject to confirmatory metallurgical testwork) and a bulk mining method provide the most attractive economics. These results will be used to focus the proposed upgraded Bankable Feasibility Study. Although no field operations were able to be carried out during the year under review, technical staff in Egypt carried out comprehensive checks on sample collection, assaying procedures and results, data compilation along with research and collation of data from other prospects in the concession area. Analysis of quality control samples within the current data base was carried out and a series of reports produced, documenting the comparison to previous results.


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Fire assay checks were compared to aqua regia results to ensure that the aqua regia technique is efficiently liberating the gold into solution. Results indicate that the assay laboratory accuracy is good and is well within the standard deviations recommended. The retrieval and study of historic data from archived daily drill reports was continued as an ongoing check and the different systems of maintaining a data base are being explored to see which will be better suited for the Sukari project. A remote sensing study was completed to investigate the application of remote sensing to identify gold in the Sukari concession area. It was concluded that Landsat imagery is able to discriminate areas containing probable hydrothermal alteration at the known gold deposits in the concession. Good spectral responses were achieved and it was recommended that detailed mapping and ground spectrometry of alteration zones be carried out to distinguish precise spectral characteristics. During the year the company implemented a staff training programme for its Egyptian technical employees with working visits to gold mines in both Ghana and Tanzania to gain valuable operating experience. Regional Exploration As part of exploration programs, composite samples were collected from old underground workings and across outcropping quartz and mineralised veins. Prospects that have produced encouraging results include Umm Ud, Anba Ut, Um Kola, Kurdaman, Sabahiya and Sukari East. These prospects all have historic mining activity with some last in production in the early 1900s and from the mid 1930s through to the end of the second world war (~1946), when gold prices and political instability brought about their closure. At various times the Egyptian Geological Survey and Mining Authority (EGSMA) has attempted to bring some of these mines into operation but methods in use at those times limited production to higher grade relatively shallow mineralisation. The company believes these mineralised occurrences have considerable exploration potential with many apparently amenable to open pit development. Sukari region of concession area


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Umm Ud Prospect Mining was most recently carried out at Umm Ud between 1941 and 1946 and was researched by EGSMA in 1976. The mine was worked over 150m of strike length and to a depth of 85m down dip via

adits and decline shafts, approximately 1100m of development was carried out over three main levels. There is no record of tonnage and grade mined however ACA Howe Mining & Metallurgy, in their evaluation report completed in 1998, stated that there were in situ tailings of 1100t grading 22.12g/t Au, 108,000t at 1.12g/t Au and dumps of 27000t at 12.22g/t Au. The geology has been described as biotite-chlorite-quartz and talcose schist hosted rocks with dioritic intrusions (Jakubiak 1987).

Old workings PGM carried out a rock chip sampling program over exposed quartz veins, returning assays as high as 101.26g/t Au. A longitudinal section contained in a report prepared by Kochin and Bassyuni in 1968, shows high grade surface and underground samples however there is no record of sampling methods or assay procedure used. It is the company’s intention to resample the underground workings and prepare a drill program to delineate the extent and grade of any mineralisation.

PGM Sample Results Sample number Assay g/t Au

1 0.96 2 5.18 3 24.95 4 9.56 5 16.48 6 3.03 7 1.04 8 24.22 9 1.88 10 0.76 11 11.38 12 10.81 13 15.72 14 18.83 15 6.85 16 45.53 17 0.77 18 101.26 19 4.14 20 0.95 21 2.22 22 4.81

Umm Ud – Geology and rock chip sampling


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Kurdaman Prospect PGM carried out a program of surface channel sampling and channel sampling along two accessible adits. The surface sampling returned assays of up to 29.81g/t Au while adit sampling went as high as 37.85g/t Au (average 1m sample width). Geological mapping and follow up sampling will be carried out to gain a better understanding of this prospect. Significant assays are listed below:

Kurdaman – surface rock chip samples 29.81g/t 25.31g/t 8.19g/t Kurdaman – channel samples from adit 1.26g/t 3.59g/t 2.77g/t 8.35g/t 37.85g/t 1.26g/t 20.23g/t 1.78g/t 27.67g/t 25.75g/t 2.60g/t 3.80g/t 2.14g/t 8.32g/t 4.94g/t 3.41g/t 1.89g/t

Note: A rock chip sample is the collection of a sample (small fragments) from a single location. A channel sample is the collection of multiple rock chip samples in a continuous line across a probable mineralised zone.

Sabahiya Prospect An adit has followed a quartz carbonate vein for in excess of 100 metres into a hill off to the side of the wadi. Significant channel sampling assays along the adit are listed below:

Sabbahiya – channel sampling from adit 2.27g/t 1.63g/t 1.20g/t 2.36g/t 3.04g/t 2.56g/t 1.65g/t 1.74g/t 2.38g/t 1.43g/t 1.44g/t 1.65g/t

Um Kola Prospect This prospect consists of an outcrop of red-brown weathered quartz carbonate and quartz veins intruded in mafic volcanic rocks with ancient workings along the veins. Development has occurred through an adit and one vertical shaft in the western zone. Fifty rock chip and channel samples were taken from surface locations and along the sides of the adit.

Um Kola – Old workings and rock chip sampling


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Sukari East Prospect Significant rock chip assays are listed below:

2.72g/t 2.38g/t 3.12g/t 3.31g/t 5.71g/t Anba Ut Prospect Chips of vein quartz from ancient mullock dumps were assayed and returned values of up to 17.7g/t and 18.9 g/t Au. There are two adits, one permits access to a 300 metre long, vertical, 0.5 metre wide quartz stringer lode system, the second adit has collapsed. A rock chip sample from one of the workings returned 11.8 g/t Au. The workings at Anba Ut are approximately 13km east of Sukari. PGM sampled an adit that follows a vertical quartz lode stringer system. As the structure is vertical, high assays are not repeated on the opposite wall of the adit. Anba Ut – Adit with channel sampling Hangaliya Prospect This prospect consists of several mineralised veins located within Gattarian aged granitic wall rocks intruded into felsic volcanics. The main mine workings were in the El Shagara section and are developed on a narrow north east trending quartz vein that dips at 50º to the north. The mine was developed over four levels. The western vein (lode) has a strike extension of 700m, and although gold bearing, no other information is available. The northern vein is known to have gold mineralisation associated with altered granites which occur associated with quartz veins in hematite stained sheared and altered zones. ACA Howe concluded that this prospect may contain a high grade open pit resource.


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Hangaliya – Geology and old workings Abu Marawat Prospect Abu Marawat is in the northern concession area and approximately 40km south west of the port of Safaga. It was worked extensively in the Pharaonic and Roman times over an area of 1km2 and to a depth of 40m. EGSMA, in association with Russian geological teams, mapped the area, collected samples and excavated trenches and in 1987, Minex Minerals, a subsidiary of U.K. company Greenwich Resources Plc, sampled and carried out a percussion and diamond drilling program however withdrew when they could not negotiate favourable terms with EGSMA. The regional geology of the area consists of a layered Precambrian sequence of volcanic and volcano sedimentary rocks which have been metamorphosed to lower greenschist facies and intruded by a variety of granitic rocks. Mineralised quartz veins are hosted within a sequence of andesitic to felsic volcanics and volcanoclastics. Drilling tested two parallel zones, the C Vein and the Fin Zone. The C Vein is approximately 230m long and up to 10m in width and dips steeply to the east, it consists of quartz veining and breccia zones hosted by altered volcanics and volcanoclastics. The Fin Zone is approximately 140m long and up to 5m wide and consists of quartz veining and breccia zones hosted in rhyolite. Minex carried out a scout program of percussion drilling followed by 4140m of diamond drilling over 26 holes. No details of analytical methods have been located and no laboratory data found, consequently all assays have to be reported as indicative only. PGM geologists reviewed and re-evaluated the Abu Marawat prospect between 1995 and 1997. They interpreted the mineralisation as not being reef gold mineralisation as was originally thought but occurring in sheared massive sulphide beds within an acid volcanic pile. These sheared beds average around 4-5 metres in width with grades to 5g/t Au. PGM was also able to trace the continuity of these structures, identify a further five structures and trace the northern and southern extension to both the ‘Fin’ and ‘C’ veins, both of which were previously drilled by Minex.


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Future development of this project will entail developing a data base of known information and compilation of geological cross sections to permit planning of drill programmes to verify the known mineralised zones and to test and delineate the extensions of these zones. Abu Marawat – Diamond and percussion drilling (Minex) Significant intersections from Minex drilling include: North Hole

No. From To Length Assay

(g/t Au)North Hole

No. From To Length Assay

(g/t Au)7240 P 22 22 33 11 2.80 7360 D 15 142 145 3 3.93

P 39 26 30 4 2.60 D 29 184.5 188 3.5 4.73 7260 D 14 85 90 5 3.54 P 33 32 40 8 3.96 7275 D 20 148 149 1 9.20 P 44 70 77 7 5.57

P 38 46 57 11 9.60 P 58 50 56 6 9.10 7300 P 65 19 26 7 6.04 7385 D 11 75.6 79.6 4.0 6.86

P 66 25 29 4 8.40 P 10 35 42 7 2.82 7320 D 30 127.5 131 3.5 4.65 P 25 24 32 8 8.25

D 30 173.5 176 2.5 7.72 P 29 51 55 4 5.60 P 21 26 42 16 3.80 P 45 66 72 6 15.80 P 35 33 45 12 6.50 P 55 14 21 7 3.20 P 63 34 40 6 10.16 P 56 28 37 9 17.18

7340 D 03 50 53 3 12.73 7400 D 06 20 24.5 4.5 5.57 D 05 11.5 15 3.5 15.96 D 07 29.5 36 6.5 3.36 D 12 81 86.5 5.5 4.80 7420 D 01 30 37.5 7.5 6.07 D 13 65.5 71.5 6 6.69 D 10 88.9 93.5 4.6 5.60 P 20 26 42 6 3.32 P 30 25 36 11 5.59 P 60 11 16 5 12.30 P 53 24 31 7 3.50 P 61 13 17 4 7.40 7440 D 08 55 57.5 2.5 9.50


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The Abu Marawat concession area contains numerous old mines such as Semna, Erediya, Atalla, Fawakhir, El Sid and Hamama. None of these prospects have been the subject of detailed modern exploration or mining, however, all are considered highly prospective and warrant dedicated exploration programmes. An 80km long shear zone extends from Erediya in the north to Fawakhir in the south and there are numerous ancient gold diggings along this zone. Barramiya Prospect The Barramiya mineralised zone is a branching, sub concordant, quartz vein system over a strike length of 1.5km within an east west trending shear zone. The shear zone dips north at between 70º and 85º, its surface trace is marked with ancient workings. The vein system as a whole is hosted by graphitic, actinolitic, talc carbonate and quartz sericite-chlorite schists with possible cherty horizons that form part of a metasedimentary sequence within an ophiolitic melange. The deposit was most recently mined from 1903 to 1915 and in 1979 EGSMA carried out a review and re-evaluation. They blocked five higher grade potential ore-bodies within the alteration zones to estimate a resource of 1.67Mt at 3.10g/t Au. ACA Howe in their report of 1998 considered this to be a questionable inferred global resource.

The company carried out a re-sampling program of the underground workings and previous EGSMA trenching to coordinate future exploration. Grades returned confirmed the results of the previous EGSMA sampling which show mineralisation along the length of the quartz vein system. From surface and underground mapping it appears that the steeply north dipping main shear zone, described above, is approximately 75 metres wide. It was cut by a number of cross cutting younger shears at an angle of approximately 30 degrees.

Old workings Extremely high grade, vertical tabular ore shoots developed where the younger shears intersect the main shear. These were the rich shoots, some of which have been mined by the earlier miners, who followed these shoots underground. Mining activities however were restricted to approximately 100 metres which leaves the remainder of the delineated 1.5 km zone to be explored. The Company’s objective is to first test bulk tonnage and grade of the already delineated 1.5 kilometre strike length. This will be carried out by surface drilling and by drilling from the well maintained adit, drive and cross cuts which provide access to the ore zone. The western extension of the mineralised shear dips under the Nubian Sandstone. The Eastern extension however, is open, and it has been traced for several kilometres. This will be subject to further exploration.


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Barramiya Trenching along mineralised zone Table of significant assays from PGM channel sampling at Barramiya:

Trench No Average grade Au g/t



1 55m @ 1.44 8 9m @ 7.06 26 10m @ 5.26 2 17m @ 1.34 9 7m @ 4.69 27 17m @ 3.84 3 26m @ 3.04 13 2m @ 1.78 28 17m @ 3.97 3 27m @ 1.75 14 6m @ 1.91 28 5m @ 2.48 4 6m @ 6.80 15 2m @ 1.73 29 1m @ 4.32 4 12m @ 5.11 16 2m @ 1.47 30 4m @ 2.21 5 15m @ 1.86 16 4m @ 2.25 31 17m @ 2.74 5 11m @ 1.90 17 3m @ 1.17 32 4m @ 2.34 6 33m @ 1.26 18 3m @ 1.25 32 7m @ 1.97 7 1m @ 14.13 22 22m @ 2.54 33 4m @ 4.86 7 12m @ 3.16 26 8m @ 2.40 33 1m @ 6.61

MINERAL EXPLORATION AND MINING TENEMENTS HELD IN EGYPT: Name Tenement reference Note Interest at 30th June 2004 Interest at 30th June 2003 Eastern Desert Law 222 for 1994 1 100% 100% Rosetta Concession 2 50% 50% Notes: 1. Pharaoh Gold Mines NL (a wholly owned subsidiary of Centamin Egypt Ltd) holds the Eastern Desert

Concession that consists of three defined project areas. On 4th November 2001, the Eastern Desert Concession was converted at ministerial direction into an Exploitation Lease, with tenure of thirty years with the option to renew for a further thirty years.

2. An Egyptian mineral concession held under application by Egyptian Pharaoh Investment (EPI) an

Egyptian company jointly owned by Centamin Egypt Limited and Kara Gold NL under an agreement with the Egyptian Government. Under the terms of this agreement to develop a heavy minerals project at Rosetta on the Mediterranean coast, east of Alexandria, any profit from mining and separation of the heavy minerals will be shared with the Egyptian Government after EPI recoups all of its development expense. Any profit from the upgrading of the ilmenite to pigment quality TiO2 (titanium dioxide) will be 100% EPI.


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AUSTRALIAN PROJECTS Nelson’s Fleet The company is entitled to a royalty over the Nelson’s Fleet gold project near St Ives, Western Australia, from the St Ives Gold Mining Co Pty Ltd, a subsidiary of Gold Fields Ltd. The company has not been informed of any mining of the tenement as yet. ASX Listing Rule 5.10.1 Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by Mr M Kriewaldt who is a corporate member of the Australasian Institute of Mining and Metallurgy with more than five years experience in the fields of activity being reported on and is a part time employee of the Company. His written consent has been received by the Company for this information to be included in this report in the form and context that it appears. Mr Kriewaldt declares an interest in shares of the Company. The information in this report that relates to mineral resources is based on information compiled by Mr Gary Brabham, a member of the Australasian Institute of Mining and Metallurgy. Mr Brabham is employed by Hellman & Schofield Pty Ltd a consultancy primarily concerned with estimation of mineral resources worldwide. Mr Brabham is a Competent Person under the meaning of the J.O.R.C. code with respect to the mineralisation being reported in this report. Mr Brabham has more than five years’ experience in the mining industry and has given his consent to the public reporting of this information in the section headed Sukari Resource. For this report, measured resources lie in areas where drilling is available at nominal 25 x 25 metre spacing, indicated resources in areas drilled at approximately 25 x 50 metre spacing and inferred resources in areas of broader spaced drilling. The resource model extends to 750mRL (approximately 400 metres below surface) and resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction. Appropriate check sampling has been undertaken to verify the gold assays used in this estimate. .


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CORPORATE ACTIVITIES In April 2003, field operations in Egypt ceased due to the company’s subsidiary, Pharaoh Gold Mines NL’s (PGM) inability to have the Egyptian Geological Survey and Mining Authority (EGSMA) renew PGM’s employees and contractor’s security permits as required under Egyptian law. In May 2003, the company instigated Arbitration proceedings in the Regional Centre for Commercial Arbitration and an action in the Administrative Court of Cairo requesting the signing of all necessary paperwork to recommence work at Sukari. In September 2003, the company initiated an action via the Ministerial Dispute Committee of the Egyptian General Authority for Investment (GAFI). This Committee is responsible for resolving disputes that may arise between investors and the relevant Minister. The Committee unanimously ruled that work should resume without delay. The GAFI decision, in-order to be binding on EGSMA, was submitted to a full meeting of the Cabinet and Prime Minister for approval. The Cabinet met on the 22nd September 2003 and ratified the resolution of GAFI and on the 4th October 2003 issued a notice to EGSMA, ordering EGSMA to sign the required permits allowing a return to work. To date, EGSMA has failed to abide by this order. In November 2003, the Company’s AIM quoted shares became eligible for settlement within CREST. In April 2004, the Company was advised by its Egyptian legal counsel that the Administrative Court had advised that it had declined to proceed with PGM’s claim against both EGSMA and the Minister, on the basis that the claim against EGSMA should have been submitted to formal arbitration under the terms of the Concession Agreement. The Court did not make any other decision or finding. The Company subsequently appealed the decision on the basis that the court should have proceeded with the case against the Minister and should have only rejected the action against EGSMA. Furthermore, that the Minister of Industry was errant in that he disregarded all prior approvals and procedures initiated by the former Minister for Industry in accordance with the terms of the Concession Agreement relating to the declaration of the Commercial Discovery, the formation of the Operating Company and the boundaries of the exploration areas. In April 2004, following the publication of comments made by Mr Abdul El Hassan Abd El Raouf Soliman, the current Chairman of EGSMA on the EGSMA website relating to the matters before the Court and the Centre, the Company wrote to Mr Soliman requesting him to formally withdraw or correct his comments immediately on the basis that they were false and misleading. As no withdrawal or correction was forthcoming, a penal action for false accusations was filed by PGM against Mr Soliman under Article 305 of the Egyptian Penal Code. The arbitration process commenced on 27th June 2004. The first determination sought by PGM was for the immediate enforcement of Article XXIV (h) of the Concession, which states that pending an arbitration award, operations and activities on the Concession are to continue. The Arbitrators advised that they would decide in the full context of the submissions submitted by the parties. Both parties have the right to submit further information up until 23rd September 2004 with a decision expected soon after that date. On 10th July 2004, the Egyptian President, His Excellency Mr Hosni Mubarak appointed a new Prime Minister, His Excellency Dr Ahmed Nazif. Subsequent to his appointment, Dr Nazif appointed a new 35 member cabinet on 14th July 2004. The former Minister of Industry, Dr Ali Saiedi was not retained as a Minister in the new cabinet, and was replaced by the Honourable Rasheed Mohamed Rasheed.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 DIRECTORS’ REPORT _____________________________________________________________________________________________________

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DDIIRREECCTTOORRSS’’ RREEPPOORRTT The Directors of Centamin Egypt Limited submit herewith the annual financial report of the company for the financial year ended 30 June 2004. In order for the company to comply with the provisions of the Corporations Act 2001, the directors report is as follows: DIRECTORS The names and particulars of the directors of the company during or since the end of the financial year are: Mr Sami El-Raghy B.Sc. (Hons), FAusIMM, FSEG Chairman, age 63 Director since 29 April 1993

A graduate of Alexandria University in 1962, Mr. El-Raghy worked in Egypt and Europe before moving to Australia in 1968 and joining American Smelting and Refining Company (Asarco). He was instrumental in the discovery and development of a number of gold mines, including the Wiluna Gold Mine for Asarco and the Mt Wilkinson Gold mine for Chevron Exploration. Mr. El-Raghy recognised the potential of the Marymia Dome and the Barwidgee Yandal Belt long before these areas became the most sought after mining areas in Australia. Mr. El-Raghy brings to the board over 37 years’ experience in the industry, both in Australia and overseas. Mr Josef El-Raghy B.Comm Managing Director, age 33 Director since 26 August 2002

Josef El-Raghy holds a Bachelor of Commerce from the University of Western Australia and has a ten year career in stock broking. He was formerly a director of both CIBC Wood Gundy and Paterson Ord Minnett. His expertise in international capital markets has greatly assisted the Company in its fundraising and development activities. Mr Colin Cowden FAII, ASA, ACIS, ACIM, FNIBA, CD Non Executive Director, age 60 Member Audit Committee Member Remuneration Committee Director since 8 March 1982

Colin Cowden is the Executive Chairman of Cowden Limited, a licensed insurance broking company formed in 1972. Cowden Limited is a prominent broking firm in Western Australia with branch offices in Sydney, Melbourne and Adelaide. Mr Cowden is also a director of OAMPS Limited. Mr G. Brian Speechly FAusIMM Non Executive Director, age 71 Member Audit Committee Member Remuneration Committee Director since 15 August 2000

Brian Speechly is a Fellow of the Australasian Institute of Mining and Metallurgy with over 45 years experience in the mining industry. During his career, Mr Speechly has been involved in over 300 mining projects and is recognised in Australia and overseas as an expert in both underground and open pit mining and design. He is particularly noted for his innovative and low cost approaches to mining issues. Dr Thomas G. Elder PhD, FIMM, FGS Non Executive Director, age 65 Director since 8 May 2002

Tom Elder is the President and a Director of Mano River Resources Inc. and non-executive Director of Chaco Resources Plc. He is a graduate geologist with an extensive background in mineral exploration gained with major resource companies including BP Minerals, Rio Tinto and Cominco. He has run exploration programs in the United Kingdom, Spain, Italy, Portugal and Greenland and had special responsibility for project development in the former Soviet Union.


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MANAGEMENT Mr Michael Kriewaldt, MSc, FAusIMM, MGSA, FSEG, MAIG Exploration Manager Mr Kriewaldt holds a degree of Master of Science and has worked as a geologist since 1955 with Mt Isa Mines, Broken Hill South, the Geological Survey of Western Australia, Asarco Australia and Eon Metals, during which time he has amassed considerable knowledge and experience in the exploration for gold and base metals. He is credited with directing the attention of Asarco to the Wiluna Gold Mines area and was instrumental in the success of the company in that area. Mr Kriewaldt also recognised the potential of the Nelson’s Fleet project and was solely responsible for the success of Centamin’s exploration effort in that area. He is a member of the following professional bodies: • The Australasian Institute of Mining and Metallurgy. • The Australian Institute of Geoscientists. • The Geological Society of Australia. • The Society of Economic Geologists Mr Harry Michael, B. Eng (Hons), MAusIMM, MAICD Project Manager Mr Michael has over 19 years industry experience predominantly in the gold industry with both construction and operational roles within Australia and internationally. Most recently he had the overall responsibility for the feasibility study, construction and operation of the 500,000 ounce per annum Geita Gold Mine in Tanzania. This operation was a joint venture between Ashanti Goldfields Ltd and Anglogold Ltd. Prior to this he was the General Manager of the Iduapriem Gold Mine in Ghana and has held various management positions at Granny Smith (Australia) and Porgera (PNG) gold mines for Placer Dome Inc. Mr Dennis W Franks, B. Bus, FCPA Joint Company Secretary Mr Franks has in excess of 30 years experience in the finance-investment banking and mining and exploration industries. He has an Accounting Degree and has considerable experience in the management of listed companies both within Australia and overseas. Mrs Heidi Brown, SIA(Aff) Joint Company Secretary Mrs Brown has experience in the finance and securities industries and holds a Diploma from the Securities Institute of Australia. Mr John Lynch Office Manager - Perth Mr Lynch has been in the mining industry in a technical capacity for over 32 years, with Western Mining, Chevron Exploration and Eagle Mining. Mr Youssef El-Raghy General Manager - Egyptian Operations An officer graduate of the Egyptian Police Academy Mr El-Raghy held senior management roles within the Egyptian Police force for a period in excess of ten years, having attained the rank of captain, prior to joining the Company. Mr El-Raghy has extensive contacts within the government and industry and maintains excellent working relationships with all of the Company’s stakeholders within Egypt. Mr Richard Osman, B.Sc.(Hons.), M.Sc. Senior Mine Geologist - Sukari Mr Osman is an experienced mine and exploration geologist who was employed for 5 years at the Big Bell operation in Western Australia owned by Harmony Gold. Mr Osman is responsible for drill hole planning, reserve definition and implementation of and maintaining all of the mining data systems at Sukari.


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Mr Esmat El-Raghy Field Manager - Sukari Operation

A retired Air Defence General, Esmat is responsible for field administration and liasing with the army, police and local authorities. Mr Taha Lamada Administration Manager - Egyptian Operations

A commerce graduate of Alexandria University, Taha is responsible for Egyptian administration and human resource management. Mr Samir Abd El-Aziz Finance Manager - Egyptian Operations

A Chartered Accountant, and member of the Society of Accounting and Auditing, Samir is responsible for implementation of the company’s Egyptian budget and dealings with Egyptian banks and financial institutions. DIRECTORS’ MEETINGS The number of directors’ meetings and number of meetings attended by each of the directors of the Company during the financial year were:

Director No of Meetings Held

No of Meetings Attended

Mr S El-Raghy 7 7 Mr C Cowden 7 6 Mr G B Speechly 7 5 Dr T G Elder 7 7 Mr J El-Raghy 7 7

In addition to these formal meetings, during the year the Directors considered and passed five (5) Circular Resolutions pursuant to clause 15.10 of the Company’s constitution. AUDIT COMMITTEE MEETINGS



Mr C Cowden 1 1 Mr G B Speechly 1 1

Since year end, the Audit Committee has met once to consider matters within its terms of reference. REMUNERATION COMMITTEE MEETINGS AND RESOLUTIONS



Mr C Cowden - - Mr G B Speechly - -

The remuneration committee considered and passed one (1) Circular Resolution in relation to matters within its terms of reference.


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PRINCIPAL ACTIVITIES The principal activity of the consolidated entity during the course of the financial year was the exploration for precious and base metals. There were no significant changes in the nature of the activities of the consolidated entity during the year. DIVIDENDS No dividends have been declared or paid since the end of the previous financial year. CHANGES IN STATE OF AFFAIRS There was no change in the state of affairs of the consolidated entity during the financial year. Consistent with previous reports, the Company’s wholly owned subsidiary Pharaoh Gold Mines NL, has not been able to carry out its activities in Egypt since April 2003 due to the refusal of the Egyptian Geological and Survey Authority (EGSMA) to renew the Company’s employees and contractors security permits as required under Egyptian law. FUTURE DEVELOPMENTS Once the issue regarding the security permits is resolved to the satisfaction of the company, it is the objective of the company, to continue to drill at the Sukari project, so as to increase the overall size of the recoverable resource, whilst at the same time, conclude the Bankable Feasibility Study into the proposed construction of a processing plant with a throughput rate of up to 5 million tonnes per annum. Subsequent to this, the company’s intention is to arrange project development finance so as to commence construction of the processing plant and ancillary infrastructure.

It is also the company’s intention to explore and drill the surrounding gold prospects with the objective to providing additional ore for the Sukari plant for processing.

At the appropriate time, the company shall also systematically test the numerous gold and base metals occurrences contained within the exploitation lease, with the intention of bringing additional gold and base metal mines into production.

OPTIONS OPTIONS ISSUED DURING THE FINANCIAL YEAR: A total of 5,290,000 unlisted options were issued during the financial year to 30 June 2004. The details of these options are as follows:-

Number of Ordinary shares under option

Exercise Price Expiry Date

250,000 29.00 cents 11 November 2005 1,160,000 23.10 cents 12 November 2006 130,000 23.10 cents 17 November 2006 750,000 35.49 cents 15 December 2006

3,000,000 23.62 cents 10 March 2009 OPTIONS CONVERTED DURING THE FINANCIAL YEAR: There were no options converted during the financial year, however 49,999,774 unissued options exercisable at 20 cents expired on 09 November 2003. OPTIONS GRANTED TO DIRECTORS At the Annual General Meeting on 29 November 2002, shareholders conditionally approved the issue of 4,000,000 performance based options to Mr Josef El-Raghy under the terms of an Executive Service Agreement made between the Company and Mr El-Raghy. No options have been issued under that agreement to date, and therefore these performance based options have lapsed.


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At the Annual General Meeting on 28 November 2003, shareholders approved the issue of 250,000 options to each of the non-executive directors, Mr C Cowden, Mr G B Speechly and Dr T Elder. These options were issued on 15 December 2003 at 35.49 cents, expiring 15 December 2006. EXECUTIVE SHARE OPTION PLAN A performance based executive share option plan is in place for Mr Harry Michael under the terms of an Employment Agreement made between the Company and Mr Harry Michael on 4 February 2003. These options were issued on 10 March 2004 at 23.62 cents, expiring 10 March 2009. EMPLOYEE OPTION PLAN At the Annual General Meeting on 29 November 2002, shareholders approved the Employee Options Plan 2002. The following options have been issued under the plan to date.

Number of Ordinary shares under option


1,160,000 23.10 cents 12 November 2006 130,000 23.10 cents 17 November 2006 750,000 35.49 cents 15 December 2006

OPTIONS ISSUED SUBSEQUENT TO BALANCE DATE No options have been issued subsequent to balance date. Details of the number of options held by Directors or held in companies controlled by them at the date of this report are set out in “Directors’ Shareholdings”. There are no unissued shares under option at the date of this report other than the shares referred to above. These options do not entitle the holder to participate in any share issue of any other corporation. ENVIRONMENTAL REGULATIONS The consolidated entity is currently complying with relevant environmental regulations and has no outstanding environmental orders against it. EVENTS SUBSEQUENT TO BALANCE DATE There are no significant events subsequent to balance date. REVIEW OF OPERATIONS A review of the company’s operations is located at the front of this report. INDEMNIFICATION OF OFFICERS & AUDITORS During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company and any related body corporate against a liability incurred as a director to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise indemnified its officers or auditors.


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DIRECTORS’ REMUNERATION The Remuneration Committee reviews the remuneration packages of all directors on an annual basis. Remuneration packages are reviewed with due regard to performance and other relevant factors.

Primary Post Employment Equity Name Salary/Fees

$ Non-Monetary

$ Superannuation

$ Share Options

$ Total

$ S El-Raghy* 322,979 4,383 12,802 - 340,164 J El-Raghy 205,500 22,445 20,600 - 248,545 T Elder* 55,753 - - **28,724 84,477 C Cowden 25,000 - 2,250 **28,724 55,974 G B Speechly 25,000 - 2,250 **28,724 55,974 Total 627,982 26,828 37,902 86,172 785,134

* Non-resident directors (Sami El-Raghy from 01 January 2004) ** Options value as per Black Scholes pricing method. The total value of these options was $38,297 for each individual respectively. Options Issued to Directors

Name Office No of Unquoted Options


Mr C N Cowden Non-Executive Director 250,000 35.49 cents 15 December 2006 Mr G B Speechly Non-Executive Director 250,000 35.49 cents 15 December 2006 Dr T G Elder Non-Executive Director 250,000 35.49 cents 15 December 2006

EXECUTIVES’ REMUNERATION Other than the Executive Directors’ remuneration as set out above the following table discloses the specified executives: Primary Post Employment Equity Name Salary/Fees

Bonus

Superannuation

Share

Options

Total

Total value of options

granted $ $ $ $ $ $ H N Michael 201,972 - 20,197 *24,159 246,328 483,172 M J Lynch 92,341 - 9,150 *34,266 135,757 45,688 D W Franks 85,535 - 14,712 *13,707 113,954 18,275 M Kriewaldt 69,000 - - - 69,000 - H A Brown 42,414 4,200 3,817 *13,707 64,138 18,275 Total 491,262 4,200 47,876 *85,839 629,177 565,410 * Options value as per Black Scholes pricing model Options issued to Executives

Name Office No of Unquoted Options

Exercise Price

Expiry Date

Mr H Michael Project Manager 3,000,000 23.62 cents 10 March 2009 Mr M J Lynch Office Manager 250,000 23.10 cents 12 November 2006 Mr D W Franks Joint Company Secretary 100,000 23.10 cents 12 November 2006 Mrs H A Brown Joint Company Secretary 100,000 23.10 cents 12 November 2006


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DIRECTORS’ SHAREHOLDINGS The relevant interest of each Director in the share capital of the Company shown in the Register of Directors’ Shareholdings as at the date of this report is:

Specified Director

Balance @ 01 July 04

Granted as

remuneration

Received on exercise of

options

Net other change

Balance @ 30 June 04

Balance held

nominally S El-Raghy 78,235,754 - - - *78,235,754 - C Cowden 223,026 - - - 223,026 - G Speechly - - - - - - T Elder - - - - - - J El-Raghy 1,300,000 - - 77,885,754 *79,185,754 -

*The total shares held by Mr S El-Raghy and Mr J El-Raghy arise due to them both being directors/trustees of the following personally related entities:

- Nordana Pty Ltd 4,990,668 shares - Nordana Pty Ltd <Super Fund A/C> 17,575,714 shares - El-Raghy Kriewaldt Pty Ltd 55,299,372 shares - S & M El-Raghy <The El-Raghy Family Account> 350,000 shares

The balance of 950,000 shares are held by Mr J El-Raghy being a director of Montana Realty Pty Ltd <Super Fund A/C> Since the end of the previous financial year no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors shown in the consolidated accounts) because of a contract made by the Company, its controlled entities or a related body corporate with the Director or with a firm of which the Director is a member, or with an entity in which the Director has a substantial interest. Signed in accordance with a resolution of the directors made pursuant to s. 298(2) of the Corporations Act 2001. On behalf of the Directors __________________________ Josef El-Raghy Managing Director Perth, 30 September 2004

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 CORPORATE GOVERNANCE STATEMENT _____________________________________________________________________________________________________

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CCOORRPPOORRAATTEE GGOOVVEERRNNAANNCCEE SSTTAATTEEMMEENNTT The Board of Directors of Centamin Egypt Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and affairs of Centamin Egypt Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. To ensure the Board is well equipped to discharge its responsibilities it has established guidelines for the nomination and selection of Directors and for the operation of the Board. Unless disclosed below, the best practice recommendations of both the ASX Corporate Governance Council and the AIM Listing Rules (The Alternative Investment Market of the London Stock Exchange), including the Combined Code On Corporate Governance have been applied for the entire financial year ended 30 June 2004. Where there has been any variation from the recommendations it is because the Board believes that the company is not as yet of a size, nor are its financial affairs of such complexity to justify some of those recommendations and as such those practices continue to be the subject of the scrutiny of the full Board. Board Composition: The Board comprises five Directors, of whom the Chairman and the Managing Director are the only executive Directors. Both the ASX and AIM rules favour that the Chairman be an independent Director, however as Mr Sami El-Raghy has been primarily based in Egypt during this stage of the company’s development, where his knowledge of the company’s projects, the Egyptian language, culture and government contacts are invaluable, the Board believe that his role and status be both as an executive and as Chairman. The skills, experience and expertise relevant to the position of each Director who is in office at the date of the annual report, their attendances at meetings and their term of office are detailed in the Directors’ Report. The majority of the Board are independent Directors, the names of the Directors of the company in office at the date of this statement are:

Name Position Committees Sami El-Raghy Chairman - Executive Director Josef El-Raghy Managing Director Colin N. Cowden Independent Director Audit and Remuneration G. Brian Speechly Independent Director Audit and Remuneration Thomas G. Elder Independent Director

When determining whether a Director is independent, the Board has determined that the Director must not be an executive and: • is not a substantial shareholder of the company or an officer of, or otherwise associated directly

with, a substantial shareholder of the company; • within the last three years has not been employed in an executive capacity by the company or

another group member, or been a Director after ceasing to hold any such employment; • within the last three years has not been a principal or employee of a material professional adviser

or a material consultant to the company or another group member, or an employee materially associated with the service provided;

• is not a material supplier or customer of the company or other group member, or an officer of or otherwise associated directly or indirectly with a significant supplier or customer;

• has no material contractual relationship with the company or another group member other than as a Director of the company;

• is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the company.


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Independent Directors have the right to seek independent professional advice in the furtherance of their duties as Directors, at the company’s expense. Written approval must be obtained from the Managing Director prior to incurring expenses on behalf of the company. S El-Raghy, J El-Raghy, and G B Speechly are also Directors of the wholly owned subsidiary companies, Pharaoh Gold Mines NL, Viking Resources Ltd, and North African Resources NL. J El-Raghy and Dr T Elder are also Directors of the subsidiary companies, Centamin Limited and Pharaoh Gold Mines Limited. The Board and Board Nominations: The company does not presently operate a nomination committee however as the company approaches the development of the Sukari project and as it shifts its corporate profile increasingly towards the capital markets of Europe, the Board is establishing guidelines for the future nomination and selection of potential new directors. In the interim, the full Board (subject to members voting rights in general meeting) is responsible for selection of new members and has regard to a candidate’s experience and competence in areas such as mining, exploration, geology, finance and administration that can assist the Company in meeting its corporate objectives and plans. Under the Company’s Constitution: • the maximum number of Directors on the Board is ten; • a Director (other than the Managing Director) may not retain office for more than three years

without submitting for re-election; and • at the Annual General Meeting each year effectively one third of the Directors in office (other than

the Managing Director) retire by rotation and must seek re-election by shareholders. Securities Trading Policy: The company has not as yet adopted a formal securities trading policy however the Directors and employees are restricted from acting on material information until it has been released to the market in accordance with the ASX requirements of continuous disclosure. Furthermore the ability of Directors and certain employees of AIM listed companies to deal in the Company’s securities is restricted in a number of ways, by statute, common law and by Rule 19 of the AIM Rules. This rule imposes restrictions beyond those imposed by law in that the Directors and certain employees and persons connected with them do not abuse and do not place themselves under suspicion of abusing price-sensitive information that they have or are thought to have, especially in periods leading up to announcement of results (closed periods). Remuneration Committee and Policies: The remuneration committee comprises Colin Cowden and Brian Speechly, both independent Directors. All compensation arrangements for Directors and Senior Executives are determined by the remuneration committee and approved by the Board, after taking into account the current competitive rates prevailing in the market. The amount of remuneration for all Directors including the full remuneration packages, comprising all monetary and non-monetary components of the Executive Directors and executives, are detailed in the Directors’ Report. All executives receive base salary, superannuation, fringe benefits and in some cases, performance incentives. Executives and staff, if invited by the Board of Directors, may participate in the Employee Share Option Plan. These packages are reviewed on an ongoing basis and in most cases are reviewed against predetermined performance criteria.


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All remuneration paid to executives is valued at the cost to the company. Shares issued to executives are valued as the difference between the market price of those shares and the amount paid by the executive. Options are valued using the Black-Scholes methodology. The Board expects that the remuneration structure that is implemented will result in the company being able to attract and retain the best executives to manage the economic entity. It will also provide the executives with the necessary incentives to work to grow long-term shareholder value. The Board can exercise its discretion in relation to approving incentives, bonuses and options and can recommend changes to the committee’s recommendations. There are no schemes for retirement benefits other than statutory superannuation for independent Directors. External auditors: The auditors of the Company, Deloitte Touche Tohmatsu (“Deloitte”), have open access to the Board of Directors at all times. Deloitte have audited the Company and its subsidiaries for a number of years and have adopted a policy of rotating audit partners every five years. The last rotation of the audit partner occurred during the financial year ended 30 June 2003. Deloitte do attend the Company’s Annual General Meeting and it is consistent with their current business practice. Audit committee: The audit committee comprises Colin Cowden and Brian Speechly, both independent Directors. The Company has a duly constituted Audit Committee which comprises the two Australia based independent Directors whose names, qualifications and attendances are included in the Directors’ Report. The responsibilities of the Audit Committee are laid out in its terms of reference, and amongst other things, includes the responsibility to ensure that an effective internal control framework exists within the entity, to produce half year and annual financial statements. This includes the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations Managing risks: The Board meets regularly to evaluate, control, review and implement the Company’s operations and objectives. Regular controls established by the Board include: • detailed monthly financial reporting; • delegation of authority to the Managing Director to ensure approval of expenditure obligations; • implementation of operating plans, cash flows and budgets by management and Board monitoring

of progress against projections; and • procedures to allow Directors, and management in the furtherance of their duties, to seek

independent professional advice via the utilisation of various external technical consultants. The Board recognises the need to identify areas of significant business risk and to develop and implement strategies to mitigate these risks.


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Commitment to stakeholders & ethical standards: The Board supports the highest standards of corporate governance and requires its members and the management and staff of the Company to act with integrity and objectivity in relation to: • Compliance with laws and regulations affecting the company’s operations; • The ASX’s Corporate Governance and the AIM Listing Rules, including the Combined Code On

Corporate Governance; • Employment practices; • Responsibilities to the community; • Responsibilities to the individual; • The environment; • Conflict of interests; • Confidentiality; • Ensure that shareholders and the financial community are at all times fully informed in accordance

with the spirit and letter of the ASX’s continuous disclosure requirements and the AIM Rules; • Corporate opportunities or opportunities arising from these for personal gain or to compete with the

company; • Protection of and proper use of the company’s assets and • Active promotion of ethical behaviour. Monitoring of the Board’s Performance and Communication to Shareholders: In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is constantly reviewed by the Chairman. The company does not presently have an evaluation of the Board and all the Board members performed by an independent consultant however may do so once the company commences development of the Sukari project. The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the Directors. Information is communicated to the shareholders through: • the Annual Report which is distributed to all shareholders; • the availability of the Company’s Quarterly Report to shareholders so requesting; • the Half-Yearly Report distributed to shareholders so requesting; • adherence to continuous disclosure requirements; • the Annual General Meeting and other meetings so called to obtain shareholder approval for

Board action as appropriate; and • the provision of the Company's website containing all of the above mentioned reports and its

constant update and maintenance. Statement by the Managing Director and Company Secretaries The Managing Director and Company Secretaries confirm to the board that the group’s financial position presents a true and fair view and that the financial statements are founded on a sound system of risk management, internal compliance and control. Further, it is confirmed that the groups risk management and internal compliance is operating efficiently and effectively.

Deloitte Touche Tohmatsu

The liability of Deloitte Touche Tohmatsu, is limited by, and to the extent of, the Accountants’ Scheme under the Professional Standards Act 1994 (NSW).

A.B.N. 74 490 121 060 Central Park Level 16 152-158 St. Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia DX 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

INDEPENDENT AUDIT REPORT TO THE MEMBERS

OF CENTAMIN EGYPT LIMITED Scope The financial report and directors’ responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cashflows, accompanying notes to the financial statements, and the directors’ declaration for both Centamin Egypt Limited (the company) and the consolidated entity, for the financial year ended 30 June 2004 as set out on pages 29 to 52. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year. The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. Audit approach We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal controls, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with the Corporations Act 2001 and Accounting Standards and other mandatory professional reporting requirements in Australia so as to present a view which is consistent with our understanding of the company’s and the consolidated entity’s financial position, and performance as represented by the results of their operations and their cash flows. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates made by the directors. While we considered the effectiveness of management’s internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

30 September 2004

The audit opinion expressed in this report has been formed on the above basis. Independence In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. Audit Opinion In our opinion, the financial report of Centamin Egypt Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30

June 2004 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory professional reporting requirements in Australia.

DELOITTE TOUCHE TOHMATSU KEITH F JONES Partner Chartered Accountants Perth, Western Australia 30 September 2004

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 DIRECTORS’ DECLARATION _____________________________________________________________________________________________________

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DDIIRREECCTTOORRSS’’ DDEECCLLAARRAATTIIOONN The directors declare that: a) The attached financial statements and notes thereto comply with Accounting Standards; b) The attached financial statements and notes thereto give a true and fair view of the financial

position and performance of the Company and the consolidated entity; c) In the directors’ opinion, the attached financial statements and notes thereto are in accordance

with the Corporations Act 2001; and d) In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to

pay its debts as and when they become due and payable. Signed in accordance with a resolution of the directors made pursuant to s. 295(5) of the Corporations Act 2001. On behalf of the Directors __________________________ Josef El-Raghy Managing Director Perth, 30 September 2004

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 STATEMENT OF FINANCIAL PERFORMANCE _____________________________________________________________________________________________________

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SSTTAATTEEMMEENNTT OOFF FFIINNAANNCCIIAALL PPEERRFFOORRMMAANNCCEE ffoorr tthhee FFIINNAANNCCIIAALL YYEEAARR EENNDDEEDD 3300 JJUUNNEE 22000044

Consolidated Company Note 2004 2003 2004 2003 $ $ $ $ Revenue from ordinary activities 2 1,061,278 613,853 2,543,447 2,043,547 Administration expenses 2 (2,014,620) (1,714,164) (1,894,759) (1,708,263) Foreign exchange gain/(loss) 299,098 (536,749) 289,790 (536,749) Promotional expenses (125,766) (164,443) (125,766) (164,251) Travelling expenses (134,292) (168,896) (134,292) (167,708) (Loss)/Profit From Ordinary Activities Before Income Tax Benefit

(914,302) (1,970,399) 678,420 (533,424)

Income tax benefit relating to ordinary activities

3 - - - -

Net (Loss)/Profit (914,302) (1,970,399) 678,420 (533,424) Net profit attributable to outside equity interests

19 - (3,747) - -

Net Loss Attributable to Members of the Parent Entity

(914,302) (1,974,146) 678,420 (533,424)

Total Changes in Equity Other than those Resulting from Transactions with Owners as Owners

(914,302)

(1,974,146)

678,420

(533,424)Earnings Per Share: Basic (cents per share) 30 (0.18) (0.48) Diluted (cents per share) 30 (0.18) (0.48)

The statement of financial performance is to be read in conjunction with the notes to the financial statements on pages 33 to 52.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 STATEMENT OF FINANCIAL POSITION _____________________________________________________________________________________________________

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SSTTAATTEEMMEENNTT OOFF FFIINNAANNCCIIAALL PPOOSSIITTIIOONN AASS AATT 3300 JJUUNNEE 22000044

Consolidated Company Note 2004 2003 2004 2003 $ $ $ $

CURRENT ASSETS Cash assets 21,133,460 24,626,319 21,101,548 24,582,074Receivables 5 30,258 27,631 28,905 7,028Prepayments 6 151,400 85,018 22,429 27,519Total current assets 21,315,118 24,738,968 21,152,882 24,616,621 NON-CURRENT ASSETS Receivables 5 - - 24,631,961 20,876,339Plant and equipment 7 1,012,896 133,264 63,363 49,794Investments 8 - - 5,511,169 5,495,423Exploration expenditure 9 26,662,812 25,262,458 330,821 -Total non-current assets 27,675,708 25,395,722 30,537,314 26,421,556 Total assets 48,990,826 50,134,690 51,690,196 51,038,177 CURRENT LIABILITIES Accounts payable 10 204,314 534,110 95,916 142,339Provisions 11 168,869 64,923 84,945 64,923Total current liabilities 373,183 599,033 180,861 207,262 NON-CURRENT LIABILITIES Accounts payable 10 217,297 224,952 - -Total non-current liabilities 217,297 224,952 - - Total liabilities 590,480 823,985 180,861 207,262 Net assets 48,400,346 49,310,705 51,509,335 50,830,915 EQUITY Contributed equity 12 68,568,240 68,568,240 68,568,240 68,568,240Reserves 13 2,809,287 2,809,287 3,409,287 3,409,287Accumulated losses 14 (22,977,181) (22,062,879) (20,468,192) (21,146,612)Parent entity interest 48,400,346 49,314,648 51,509,335 50,830,915Outside equity interest 19 - (3,943) - -Total equity 48,400,346 49,310,705 51,510,335 50,830,915

The statement of financial position is to be read in conjunction with the notes to the financial statements on pages 33 to 52.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 STATEMENT OF CASH FLOWS _____________________________________________________________________________________________________

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SSTTAATTEEMMEENNTT OOFF CCAASSHH FFLLOOWWSS ffoorr tthhee FFIINNAANNCCIIAALL YYEEAARR EENNDDEEDD 3300 JJUUNNEE 22000044

Consolidated Company Note 2004 2003 2004 2003 $ $ $ $

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 55,847 77,000 45,616 77,002Receipts from controlled entities - - 1,492,400 1,478,174Payments to supplies and employees

(2,440,230) (2,177,579) (2,171,050) (1,948,568)

Interest received 1,005,431 492,781 1,005,431 488,371Net cash (used in) / provided by operating activities

21 (1,378,952)

(1,607,798)

372,397

94,979

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for plant and equipment (1,019,312) (80,938) (43,242) (37,642)Sale of plant and equipment 2,718 - 2,718 -Advances to controlled entities 3,944 - (3,771,368) (6,924,123)Payments for exploration (1,400,354) (4,012,184) (330,821) -Payment for investment securities - - - (2) Net cash used in investing activities (2,413,004)

(4,093,122)

(4,142,713)

(6,961,767)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the issue of shares - 5,615,442 - 5,615,442Proceeds from the conversion of options

- 23,898,245 - 23,898,245

Capital Raising Costs - (1,173,936) - (1,173,936)Repayment of borrowings - related entities

- (1,473,918) - (141,961)

Net cash provided by financing activities -

26,865,833

-

28,197,790

Net (decrease) /increase in cash held

(3,791,956) 21,164,913 (3,770,316) 21,331,002

Effect of exchange rate changes on the balance of cash held in foreign currencies

299,097 (492,677) 289,790 (536,749)

Cash at the beginning of the financial year

24,626,319 3,954,083 24,582,074 3,787,821

Cash at the end of the financial year

21 21,133,460

24,626,319

21,101,548

24,582,074

The statements of cash flows are to be read in conjunction with the notes to the financial statements on pages 33 to 52.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 NOTES TO THE FINANCIAL STATEMENTS _____________________________________________________________________________________________________

___________________________________________________________________________ Page 33

NNOOTTEESS TTOO TTHHEE FFIINNAANNCCIIAALL SSTTAATTEEMMEENNTTSS ffoorr tthhee FFIINNAANNCCIIAALL YYEEAARR EENNDDEEDD 3300 JJUUNNEE 22000044

1. Summary of Significant Accounting Policies

(A) FINANCIAL REPORTING FRAMEWORK

The financial report is a general purpose financial report and has been prepared in accordance with applicable Accounting Standards, Urgent Issues Group Consensus Views, the Corporations Act 2001, and complies with other requirements of the law. The financial report has been prepared on the basis of historical cost and except where stated, does not take into account changing money values or current valuations of non-current assets. The accounting policies have been consistently applied by the entities in the economic entity and, except where there is a note of a change in accounting policy, are consistent with those of the previous year. This financial report is denominated in Australian Dollars.

(B) SIGNIFICANT ACCOUNTING POLICIES Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability thereby ensuring that the substance of the underlying transactions or other events are reported. The following significant accounting policies have been adopted in the preparation and presentation of the financial report.

(C) PRINCIPLES OF CONSOLIDATION The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the economic entity, being the Company and its controlled entities as defined in accordance with accounting standard AASB 1024 “Consolidated Accounts”. The consolidated financial statements include the information and results of each controlled entity from the date on which the company obtains control and until such time as the company ceases to control such entity. In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.

(D) TAXATION The economic entity adopts the liability method of tax effect accounting. Income tax benefit is calculated on the loss from ordinary activities adjusted for permanent differences between taxable and accounting income. The tax effect of timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the statement of financial position as a future income tax benefit or a provision for deferred income tax. Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain.

(E) NON-CURRENT ASSETS

The carrying amounts of all non-current assets, except exploration expenditure, are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds the recoverable amount, the asset is written down to the lower amount. In assessing recoverable amounts the relevant cash flows have not been discounted to their present value.


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(F) INVESTMENTS Investments in controlled entities are carried at recoverable amount. Dividends and distributions are brought to account in the statement of financial performance when they are proposed by the controlled entities.

(G) EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE

Exploration, evaluation and development costs are accumulated in respect of each separate area of interest where rights of tenure are current. These costs are carried forward where they are expected to be recouped through sale or successful development and exploitation of the area of interest, or, where activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the year the decision is made. Each area of interest is also reviewed annually and accumulated costs written off to the extent that they will not be recoverable in the future. As at balance date: • The economic entity is still progressing exploration to delineate reserves; • An upgraded feasibility study with respect to the areas of interest is in the process of

being completed; and • The realisable value is dependant upon the current and future gold and mineral sands

prices. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration, evaluation and development costs will be amortised on a unit of production basis over the life of the economically recoverable reserves. Restoration costs are provided for at the time of the activities which give rise to the need for restoration. If this occurs prior to commencement of production, the costs are included in deferred exploration and development expenditure. If it occurs after commencement of production, restoration costs are provided for and charged to the statement of financial performance as an expense.

(H) PLANT AND EQUIPMENT

Items of plant and equipment are recorded at cost and depreciated from the date of acquisition on a reducing balance method over their estimated useful lives. The following estimated useful lives are used in the calculation of depreciation:

Plant, Equipment & Office Furniture - 4 - 10 years Motor Vehicles - 2 - 8 years

(I) SUPERANNUATION FUND

The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of the Employees and Directors in respect of salaries and directors’ fees paid. Contributions are charged against income as they are made.

(J) FOREIGN CURRENCY All foreign currency transactions during the year have been brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at balance date are translated at the exchange rate existing at that date. All exchange differences are brought to account in the statement of financial performance of the financial period in which they arise. The assets and liabilities of the controlled entity incorporated overseas (being an integrated foreign operation) are translated using the temporal method. Monetary items are translated using the exchange rate at balance date and non-monetary items are translated at exchange rates current at the transaction dates.


___________________________________________________________________________ Page 35

Exchange differences arising on translation are taken directly to the statement of financial performance.

(K) RECEIVABLES

Trade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts.

(L) ACCOUNTS PAYABLE

Trade payables and other accounts payable are recognised when the economic entity becomes obliged to make future payments resulting from the purchase of goods and services.

(M) INTEREST-BEARING LIABILITIES

Bank loans and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised on an accrual basis. Ancillary costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the borrowing.

(N) DEBT AND EQUITY INSTRUMENTS ISSUED BY THE COMPANY

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

(O) REVENUE RECOGNITION

Sale of Goods and Disposal of Assets - Revenue from the sale of goods and disposal of other assets is recognised when the economic entity has passed control of the goods or other assets to the buyer.

Contribution of Assets - Revenue arising from the contribution of assets is recognised when the economic entity gains control of the contribution or the right to receive the contribution.

(P) JOINT VENTURES

Interest in joint venture operations are reported in the financial statements by including the economic entity’s share of assets employed in the joint venture, the share of liabilities incurred in relation to the joint venture and the share of any expenses incurred in relation to the joint venture in their respective classification categories.

(Q) GOODS AND SERVICES TAX

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii) for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(R) EMPLOYEE BENEFITS

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made in respect of wages and salaries, annual leave, sick leave, and other employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.


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Consolidated Company 2. Loss from Ordinary Activities 2004

$ 2003

$ 2004

$ 2003

$ Loss from ordinary activities has been arrived at after including:

OPERATING REVENUE Income - other persons 1,005,431 492,781 1,005,431 488,371Administration & management fees - Other entities in the wholly-owned group -

-

1,492,400

1,478,174

Other income 55,847 77,000 45,616 77,002 1,061,278 569,781 2,543,447 2,043,547Foreign exchange rate gain 299,098 44,072 289,790 - 1,360,376 613,853 2,833,237 2,043,547OPERATING EXPENSES Depreciation - plant and equipment 136,962 17,617 26,955 17,617Office lease payments 50,731 48,636 50,731 48,636Allowance for doubtful debts - - 4,593 4,845

Consolidated Company 3. Taxation

2004 $

2003 $

2004 $

2003 $

The prima facie income tax benefit on the Loss from Ordinary Activities reconciles to the income tax benefit in the financial statements as follows:

Loss / (Profit) from Ordinary Activities 914,302 1,974,146 (678,420) 533,424 Income tax benefit calculated at 30% of Profit/Loss from Ordinary Activities

(274,291) (592,244) 203,526 (160,027)

Permanent differences: Other (1,216) (23,358) (1,216) (21,169) Tax benefit/(expense) of timing differences not brought to account

466,840 (1,420,973) - 175,799

Tax benefit of losses not brought to account (191,333) 2,036,575 (202,310) 5,397 Income tax benefit attributable to Loss from Ordinary Activities

- - - -

The future benefit of tax losses and other timing differences have not been brought to account because there is no virtual certainty as to their recovery. They are estimated to be:

Consolidated Company 2004

$ 2003

$ 2004

$ 2003

$ Tax Losses - revenue 24,063,163 20,653,728 3,822,297 4,502,339Tax Losses - capital 600,000 600,000 - -Tax Losses 24,663,163 21,253,728 3,822,297 4,502,339Tax Effect at 30% 7,398,949 6,376,118 1,146,689 1,350,702

The above carried forward tax losses with respect to exploration expenditure can only be utilised to offset foreign sourced mining income.


___________________________________________________________________________ Page 37

The future income tax benefit will only be utilised if: • the companies that make up the economic entity derive future assessable income of a nature and

amount sufficient to enable the benefit from the losses to be realised; • the companies that make up the economic entity continue to comply with the conditions for

deductibility imposed by the law; and • no changes in taxation legislation adversely affect the companies that make up the economic

entity in realising the benefit from the losses. Tax Consolidation System Legislation has been passed to allow groups, comprising a parent entity and its Australian resident wholly-owned entities, to elect to consolidate and be treated as a single entity for income tax purposes. This legislation, which includes both mandatory and elective elements, is applicable to the company and the group intends to elect to consolidate and be treated as a single entity for income tax purposes as from the 1st July 2003. On tax consolidation the company will become the ‘head entity’ of the tax-consolidated group, and has agreed to compensate each wholly owned subsidiary for the carrying amount of its deferred tax balances. Where this agreement has resulted in an onerous contract, the head entity has recognised a provision and income tax expense. The ATO has not yet been notified of the economic entities intention to enter tax consolidation. 4. Segment Reporting Primary reporting - Business Segments The economic entity is engaged in the business of exploration for precious and base metals only, which is characterised as one business segment only. As the economic entity has only one business segment, all the necessary reporting disclosures are disclosed elsewhere in the notes to the financial statements. Secondary reporting - Geographical Segments The principal activity of the economic entity during the year was the exploration for precious and base metals in Egypt. Consolidated Company 5. Receivables 2004

$ 2003

$ 2004

$ 2003

$ CURRENT Other Receivables 23,825 - 22,929 -GST receivable 6,433 27,631 5,976 7,028 30,258 27,631 28,905 7,028

NON-CURRENT Loans and advances to controlled entities

- - 27,663,830 24,068,926

Less: Allowance for doubtful debts - - (3,031,869) (3,192,587) - - 24,631,961 20,876,339

The loans to controlled entities are amounts that have been advanced for expenditure on exploration, prospecting and development activities. Consolidated Company 6. Prepayments 2004

$ 2003

$ 2004

$ 2003

$ CURRENT Other 151,400 85,018 22,429 27,519


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7. Plant and Equipment CONSOLIDATED Plant,

Equipment & Office

Furniture

Motor Vehicles

Total $ $ $

Gross Carrying Amount Balance at 30 June 2003 839,283 124,628 963,911 Additions 984,767 34,545 1,019,312 Disposals (3,087) (18,500) (21,587) Balance at 30 June 2004 1,820,963 140,673 1,961,636 Accumulated Depreciation Balance at 30 June 2003 (730,954) (99,693) (830,647) Depreciation expense (110,223) (26,739) (136,962) Disposals 3,087 15,782 18,869 Balance at 30 June 2004 (838,090) (110,650) (948,740) Net Book Value As at 30 June 2003 108,329 24,935 133,264 As at 30 June 2004 982,873 30,023 1,012,896


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7. Plant and Equipment (continued) COMPANY Plant,

Equipment & Office

Furniture

Motor Vehicles

Total $ $ $

Gross Carrying Amount Balance at 30 June 2003 427,567 18,500 446,067 Additions 8,697 34,545 43,242 Disposals (3,087) (18,500) (21,587) Balance at 30 June 2004 433,177 34,545 467,722 Accumulated Depreciation Balance at 30 June 2003 (383,211) (13,062) (396,273) Depreciation expense (16,462) (10,493) (26,955) Disposals 3,087 15,782 18,869 Balance at 30 June 2004 396,586 7,773 404,359 Net Book Value As at 30 June 2003 44,356 5,438 49,794 As at 30 June 2004 36,591 26,772 63,363 Consolidated Company 2004 2003 2004 2003 $ $ $ $ Aggregate depreciation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year:

110,223 18,639 16,462 11,08626,739 28,422 10,493 6,531

Plant, equipment and office furniture Motor vehicles 136,962 47,061 26,955 17,617Included above, the following amounts were capitalised within exploration expenditure: -

29,444

-

-


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8. Investments Consolidated Company NON CURRENT Note 2004

$ 2003

$ 2004

$ 2003

$ Shares in controlled entities - - 5,959,455 5,943,709Recoverable amount write down - - (448,286) (448,286) - - 5,511,169 5,495,423 9. Exploration Expenditure Exploration, evaluation and development expenditure

Consolidated Company

(a) - At Cost Note 2004 $

2003 $

2004 $

2003 $

Balance at the beginning of the year 25,262,458 21,092,284 - -Expenditure for the year 1,069,533 4,170,174 - -Take up joint venture assets 330,821 - 330,821 -Balance at the end of the year 26,662,812 25,262,458 330,821 - (b) Included within the cost amount of assets is $5,311,744 being the excess of consideration over

the net tangible assets acquired on the acquisition of Pharaoh Gold Mines NL in January 1999. This amount has been treated as part of the cost of exploration and evaluation.

(c) In April 2003, field operations in Egypt ceased due to the company’s subsidiary, Pharaoh Gold

Mines NL’s (PGM) inability to have the Egyptian Geological Survey and Mining Authority (EGSMA) renew PGM’s employees and contractor’s security permits as required under Egyptian law. The company has instigated various legal proceedings and arbitration and is confident that these matters will be successfully resolved. In all cases the conclusions reached to date have been in favour of the company resuming its activities. Management are confident that the company’s activities will continue as normal in the future.

10. Accounts Payable Consolidated Company 2004

$ 2003

$ 2004

$ 2003

$ CURRENT Trade payables 35,584 191,677 22,546 5,632Other creditors and accruals - director personally related entities

-

-

-

-

Other creditors and accruals 168,730 342,433 73,370 136,707 204,314 534,110 95,916 142,339NON-CURRENT Other creditors and accruals - director personally related entities

217,297

224,952

-

-

Other creditors and accruals - - - - 217,297 224,952 - -


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11. Current Provisions Consolidated Company CURRENT Employee Benefits

2004 $

2003 $

2004 $

2003 $

Opening Balance 64,923 - 64,923 -Additional provision recognised 159,526 73,890 67,990 73,890Reductions due to payment (55,580) (8,967) (47,968) (8,967)Closing Balance 168,869 64,923 84,945 64,923 12. Contributed Equity


$ 2003

$ 2004

$ 2003

$

Balance at beginning of year 68,568,240 39,669,533 68,568,240 39,669,533 7,700,000 30 November 2002 Unlisted options converted to fully paid shares @ 20c each

- 1,540,000 - 1,540,000

Issue of 22,580,127 fully paid shares (2002: 45,000,000)

- 5,615,442 - 5,615,442

111,791,226 3 March 2003 options converted to fully paid shares @ 20 cents each (2002: 1,888,067)

- 22,358,245 - 22,358,245

Cost of capital raising - (1,173,936) - (1,173,936) Transfer from Option Reserve following conversion of options

- 558,956 - 558,956

Balance at end of year 68,568,240 68,568,240 68,568,240 68,568,240 2004 2003 No. $ No. $ Fully Paid Ordinary Shares Balance at beginning of year 501,910,369 68,568,240 359,839,016 39,669,533 Issue of fully paid shares following exercise of 30 November 2002 Unlisted Options

- - 7,700,000 1,540,000

Issue of fully paid shares - - 22,580,127 5,615,442 Issue of fully paid shares following exercise of 3 March 2003 options Transfer from Option Reserve Capital raising costs

-

--

-

- -

111,791,226

- -

22,358,245

558,956 (1,173,936)

Balance at end of year 501,910,369 68,568,240 501,910,369 68,568,240 Fully paid ordinary shares carry one vote per share and carry the right to dividends.


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Options 2004

Unlisted Options Expiring 30/11/02

No.

Listed Options Expiring 3/03/03

No.

Unlisted Options Expiring 9/11/03

No.

Unlisted Employee Options

Balance at beginning of year - - 49,999,744 - Issued during the year - - - 5,290,000 Exercised during the year - - - - Lapsed/Expired during the year

- - 49,999,744 -

Balance at end of year - - - 5,290,000 Options 2003 (Exercise Price 20 cents each)

Balance at beginning of year 7,700,000 111,791,226 49,999,744 - Issued during the year - - - - Exercised during the year (7,700,000) (111,791,226) - - Balance at end of year - - 49,999,744 - The details of these options are as follows:- i) Balance at beginning of the financial year

Options - Series Number Grant Date Expiry/ Exercise Date

Exercise Price

$ Issued 09 November 1998 49,999,744 09 November 1998 09 November 2003 0.20 ii) Granted during the financial year

Options - Series Number Grant Date Expiry/ Exercise Date

Exercise Price

$ Issued 11 November 2003 250,000 11 November 2003 11 November 2005 0.2900 Issued 12 November 2003 1,160,000 12 November 2003 12 November 2006 0.2310 Issued 17 November 2003 130,000 17 November 2003 17 November 2006 0.2310 Issued 15 December 2003 750,000 15 December 2003 15 December 2006 0.3549 Issued 10 March 2004 3,000,000 10 March 2004 10 March 2009 0.2362 Total number of options 5,290,000 The options have been received for nil consideration and are unvested at the end of the year.


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13. Reserves Consolidated Company 2004

$ 2003

$ 2004

$ 2003

$ Option reserve Balance at the beginning of the year 2,273,713 2,832,669 2,273,713 2,832,669Transfer to Contributed Equity following conversion of Options issued for consideration

- (558,956) - (558,956)

Balance at the end of the year 2,273,713 2,273,713 2,273,713 2,273,713Reserve created from the issuing of options for consideration.

Asset realisation reserve 535,574 535,574 535,574 535,574Reserve created from the realisation of particular assets.

Capital Reserve - - 600,000 600,000Reserve created from the cancellation of shares in the Company held by Pharaoh Gold Mines NL. 2,809,287 2,809,287 3,409,287 3,409,287 There is currently no formal policy for realisation of the reserves. 14. Accumulated Losses Consolidated Company 2004

$ 2003

$ 2004

$ 2003

$ Balance at the beginning of the year 22,062,879 20,088,733 21,146,612 20,613,188Current year’s loss / (profit) 914,302 1,974,146 (678,420) 533,424Balance at the end of the year 22,977,181 22,062,879 20,468,192 21,146,612 15. Employee Benefits Consolidated Company 2004

$ 2003

$ 2004

$ 2003

$ The aggregate employee benefit liability recognised and included in the financial statements is as follows: Provision for employee benefits: Current (note 11)

168,869

64,923

84,945

64,923 16. Number of Employees Consolidated Company 2004 2003 2004 2003 No. No. No. No. Number of Employees 42 63 7 8 17. Contingent Liabilities There are no contingent liabilities to report as at 30 June 2004.


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18. Commitments for Expenditure


$ 2003

$ 2004

$ 2003

$ Lease of office premises Not longer than 1 year 16,942 50,540 16,942 50,540Longer than 1 year and not longer than 5 years

-

16,847

-

16,847

Consolidated 19. Outside Equity Interests 2004

$ 2003

$ Interest in accumulated losses at the beginning of the financial year - (7,690)Interest in profit from ordinary activities after income tax - 3,747Interest in accumulated losses at the end of the financial year - (3,943)Total outside equity interests - (3,943) Centamin Egypt Limited has a 50% interest in Egyptian Pharaoh Investment (“EPI”) with the balance being held by Kara Gold NL, a company in which a director Mr S El-Raghy has a beneficial interest and is also a director. EPI was incorporated under Egyptian law in January 1995, however, no shares have yet been issued in EPI. The entity is a Joint Venture entity and has now been accounted for on this basis.

20. Particulars in Relation to Controlled Entities

Country of Incorporation 2004 2003 PARENT ENTITY % % Centamin Egypt Limited Australia

CONTROLLED ENTITIES Viking Resources Limited Australia 100 100 North African Resources NL Australia 100 100 Pharaoh Gold Mines NL Australia 100 100 Centamin Limited Bermuda 100 - Pharaoh Gold Mines Limited Bermuda 100 -

21. Notes to the Statements of Cash Flows

(a) RECONCILIATION OF CASH For the purpose of the Statements of Cash Flows, cash includes cash on hand and at bank and deposits. Cash as at the end of the financial year as shown in the Statements of Cash Flows is reconciled to the related item in the statement of financial position as follows:


$ 2003

$ 2004

$ 2003

$ Cash 21,133,460 24,626,319 21,101,548 24,582,074(b) RECONCILIATION OF LOSS FROM ORDINARY ACTIVITIES TO NET CASH USED IN OPERATING ACTIVITIES

(Loss) / Profit from ordinary activities before income tax

(914,302) (1,970,399) 678,420 (533,424)

Add/(less) non-cash items: Depreciation 136,962 17,617 26,955 17,617Foreign exchange rate (gain)/loss (299,098) 492,677 (289,790) 536,749 Changes in assets and liabilities during the year:

(Increase)/decrease in receivables (2,627) (4,083) (21,877) (6,448)(Increase)/decrease in prepayments (66,382) 17,912 5,090 (27,519)Increase/(decrease) in trade creditors & accruals

(233,505) (161,522) (26,401) 108,004

Net cash used in operating activities (1,378,952) (1,607,798) 372,397 94,979


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22. Related Parties

SPECIFIED DIRECTORS & SPECIFIED EXECUTIVES a) The names of each person holding the position of Specified Director and Specified Executive of

Centamin Egypt Limited during the financial year are laid out in Note 23. b) Details of specified directors and specified executives remuneration are set out in Note 23. c) The details of the movement in the shareholding during the financial year are as follows:

Specified Director


Granted as

remuneration

Received on exercise of

options

Net other change


Balance held

nominally S El-Raghy 78,235,754 - - - *78,235,754 - C Cowden 223,026 - - - 223,026 - G Speechly - - - - - - T Elder - - - - - - J El-Raghy 1,300,000 - - 77,885,754 *79,185,754 -

*The total shares held by Mr S El-Raghy and Mr J El-Raghy arise due to them both being directors/trustees of the following personally related entities:

- Nordana Pty Ltd 4,990,668 shares - Nordana Pty Ltd <Super Fund A/C> 17,575,714 shares - El-Raghy Kriewaldt Pty Ltd 55,299,372 shares - S & M El-Raghy <The El-Raghy Family Account> 350,000 shares

The balance of 950,000 shares are held by Mr J El-Raghy being a director of Montana Realty Pty Ltd <Super Fund A/C> d) The details of the options to acquire ordinary shares are as follows:- Specified Director/ Specified Executive


Granted as

remuneration

Exercised Other changes -

lapsed


Balance Vested @ 30 June

2004 Directors S El-Raghy 49,999,488 - - -49,999,488 - - C Cowden - 250,000 - - 250,000 - G Speechly - 250,000 - - 250,000 - T Elder - 250,000 - - 250,000 - Executives H Michael - 3,000,000 - - 3,000,000 - M Lynch - 250,000 - - 250,000 - D Franks - 100,000 - - 100,000 - H Brown - 100,000 - - 100,000 - Total 49,999,488 4,200,000 - -49,999,488 4,200,000 -

Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the economic entity since the end of the previous financial year and there were no material contracts involving directors’ interests at year-end. OTHER TRANSACTIONS WITH DIRECTORS Mr S El-Raghy and Mr J El-Raghy are also directors and shareholders of El-Raghy Kriewaldt Pty Ltd (“El-Raghy Kriewaldt”). El-Raghy Kriewaldt provides office premises to the Company. All dealings with El-Raghy Kriewaldt are in the ordinary course of business and on normal terms and conditions. Rent and office outgoings paid to El-Raghy Kriewaldt during the year were $50,731 (2003: $48,636). A director of the Company, Mr. C. Cowden has an interest as a director and controlling shareholder of Cowden Limited, Insurance Brokers. This company provides insurance broking services to the Company. All dealings with this company are in the ordinary course of business and on normal terms and conditions. Premiums paid to Cowden Limited during the year were $50,936 (2003:$57,166).


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LOANS RECEIVABLE AND PAYABLE During the year the Company provided funds to and received funding from controlled entities. Refer Note 5 and Note 10 for details. 23. REMUNERATION OF DIRECTORS AND SPECIFIED EXECUTIVES The Directors of Centamin Egypt Limited during the financial year were:

- Mr Sami El-Raghy (Chairman); - Mr Josef El-Raghy (Managing Director); - Dr Thomas G Elder (Non-Executive Director); - Mr Colin Cowden (Non-Executive Director); and - Mr G. Brian Speechly (Non-Executive Director).

The specified executives during the financial year were: - Mr Harry Michael (Project Manager); - Mr M. John Lynch (Office Manager); - Mr Michael Kriewaldt (Exploration Manager); - Mrs Cecilia Tyndall (Company Secretary and Financial Controller) who resigned on 19 July

2004; - Mr Dennis W Franks (Joint Company Secretary) who was appointed on 19 July 2004; and - Mrs Heidi Brown (Joint Company Secretary) who was appointed on 19 July 2004.

(a) Contracts for services Remuneration and other terms of employment for the specified directors and the specified executives are formalised in service agreements. Each of these agreements provide for the provision of a base salary, superannuation and a motor vehicle for the executive directors. The provision of performance related bonus to any executive directors and any executives is made at the discretion of the Board of Directors. Contracts for service do not provide for terms which affect remuneration in future periods. The terms of the contracts provide for bonuses to be paid at the discretion of the directors. (b) Specified Directors’ and specified executives’ remuneration The board reviews the remuneration packages of all specified directors and specified executives on an annual basis. Remuneration packages are reviewed and determined with due regard to current market rates and are benchmarked against comparable industry salaries, adjusted by a performance factor to reflect changes in the performance of the Company. The remuneration packages for specified directors for this financial year are detailed as follows: (c) Specified directors’ remuneration


$ Non-Monetary

$ Superannuation

$ Share Options

$ Total

$ Executive Directors S El-Raghy 322,979 4,383 12,802 - 340,164 J El-Raghy 205,500 22,445 20,600 - 248,545 Total 528,479 26,828 33,402 - 588,709 Non-Executive Directors T Elder 55,753 - - 28,724 84,477 C Cowden 25,000 - 2,250 28,724 55,974 G B Speechly 25,000 - 2,250 28,724 55,974 Total 105,753 - 4,500 86,172 196,425 Grand Total 627,982 26,828 37,902 86,172 785,134


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The share options granted to Mr T Elder, Mr C Cowden and Mr G B Speechly have been valued internally by the Company using the Black-Scholes Option Pricing Model. The total value of these options was $38,297 for each individual respectively. These options vest and are exercisable over a period of twelve months, with 50% vesting and exercisable after six months on 15 June 2004 and the other 50% vesting and exercisable after twelve months on 15 December 2004. These options expire on 15 December 2006. (d) Specified executives’ remuneration


Bonus

Superannuation

Share

Options

Total

Total value of options

granted $ $ $ $ $ $ H N Michael 201,972 - 20,197 24,158 246,327 483,172 M J Lynch 92,341 - 9,150 34,266 135,757 45,688 D W Franks 85,535 - 14,712 13,707 113,954 18,275 M Kriewaldt 69,000 - - - 69,000 - H A Brown 42,414 4,200 3,817 13,707 64,138 18,275 Total 491,262 4,200 47,876 85,838 629,176 565,410 The share options issued to Mr H Michael have been valued internally by the Company using the Black-Scholes option pricing method. These options were issued on 10 March 2004 and are subject to certain milestones. These options vest over five years from the date of issue. The share options granted to Mr D W Franks, Mr M J Lynch and Mrs H A Brown have been valued internally by the Company using the Black-Scholes option pricing method. These options vest over a period of twelve months, with 50% exercisable and vesting after six months on the 12 May 2004 and the other 50% exercisable and vesting after 12 months on the 12 November 2004. The options expire on 15 December 2006. 24. Options granted to Directors At the Annual General Meeting on 29 November 2002, shareholders conditionally approved the issue of 4,000,000 performance based options to Mr Josef El-Raghy under the terms of an Executive Service Agreement made between the Company and Mr El-Raghy. No options have been issued under that agreement to date, and therefore these options have lapsed. The unquoted options granted to other Directors during the financial year were:-

Name Office Number of Unquoted Options

Exercise Price

Expiry Date

Mr C N Cowden Non-Executive Director 250,000 35.49 cents 15 December 2006 Mr G B Speechly Non-Executive Director 250,000 35.49 cents 15 December 2006 Dr T G Elder Non-Executive Director 250,000 35.49 cents 15 December 2006

25. Options granted to Executives A performance based executive share option plan is in place for Mr Harry Michael under the terms of an Employment Agreement made between the Company and Mr Michael on 4 February 2003. These options were issued on 10 March 2004 at 23.62 cents expiring 10 March 2009 and the exercise thereof are subject to certain mile-stone events being achieved. These milestones are: 1. Completion of bankable feasibility study and subsequent bank funding approval 2. Completion of construction of the Sukari Gold Project within time and budget 3. The first gold pour from the Sukari Mine.


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26. Options granted to Employees At the Annual General Meeting on 29 November 2002, shareholders approved the Employee Option Plan 2002. To date, the following unquoted options have been issued under the Employee Option Plan:-

Number of Unissued Options

Exercise Price Expiry Date Number of Employees

1,160,000 23.10 cents 12 November 2006 18 130,000 23.10 cents 17 November 2006 3 750,000 35.49 cents 15 December 2006 3

3,000,000 23.62 cents 10 March 2009 1

Consolidated

Company

2004 $

2003 $

2004 $

2003 $

27. Auditors’ Remuneration Auditing the financial report 29,500 36,800 25,000 33,000Other services – Tax 15,380 7,830 15,380 7,230 44,880 44,630 40,380 40,230 28. Interests in Joint Ventures The consolidated entity has material interests in the following unincorporated venture:- JOINT VENTURES Principal Activities Percentage Interest 2004 2003 % % Egyptian Pharaoh Investments Exploration 50 50 The following amount represents the economic entity’s interest in assets employed in the above joint venture. The amount is included in the consolidated financial statements under the respective category.

Consolidated & Company

2004 $

2003 $

Non Current Assets Exploration expenditure 330,821 - 29. Superannuation The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of its employees and Directors. Contributions are charged against income as they are made.


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30. Earnings Per Share Consolidated

2004 2003 Cents Per

Share Cents Per

Share Basic earnings per share (0.18) (0.48) Diluted earnings per share (0.18) (0.48) Basic Earnings per Share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

2004 $

2003 $

Loss (a) (914,302) (1,974,146) 2004 2003 No. No. Weighted average number of ordinary shares (b) 501,910,369 414,412,312 (a) The Loss used in the calculation of basic earnings per share equates to the Net Loss in the Statement of Financial Performance.

(b) The options are considered to be potential ordinary shares and are therefore excluded from the weighted average number of ordinary shares used in the calculation of basic earnings per share. Where dilutive, potential ordinary shares are included in the calculation of diluted earnings per share.

Diluted Earnings per Share

The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:

2004 $

2003 $

Loss (a) (914,302) (1,974,146) 2004

No. 2003 No.

Weighted average number of ordinary shares and potential ordinary shares (b)

501,910,369 414,412,312

(a) The Loss used in the calculation of diluted earnings per share equates to the Net Loss in the Statement of Financial Performance.

(b) Weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share equates to the weighted average number of ordinary shares used in the calculation of basic earnings per share, because the potential ordinary shares have no dilutive effect.

(c) The following potential ordinary shares are not dilutive and are therefore excluded from the weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share:

2004 No.

2003 No.

Other 5,290,000 49,999,744 31. Events Subsequent to Balance Date There have been no material events subsequent to balance date.


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32. Financial Instruments a) Interest Rate Risk

The following table details the consolidated entity’s exposure to interest rate risk as at reporting date:

Average Interest Rate %

Variable Interest

Rate

Fixed Interest Rate (<

than 1 yr)

Non Interest Bearing

Total

2004 $ $ $ $ FINANCIAL ASSETS Cash 4.93 608,593 20,501,155 23,712 21,133,460Receivables - - 30,258 30,258 608,593 20,501,155 53,970 21,163,718 FINANCIAL LIABILITIES Accounts payable - - 421,611 421,611Employee Benefits - - 168,869 168,869 - - 590,480 590,4802003 FINANCIAL ASSETS Cash 4.05 19,601,714 5,023,625 980 24,626,319Receivables - - - 27,631 27,631 19,601,714 5,023,625 28,611 24,653,950 FINANCIAL LIABILITIES Accounts payable - - - 759,062 759,062Borrowings - - - 64,923 64,923

- - 823,985 823,985 b) Credit Risk

Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the economic entity. The economic entity has adopted a policy of only dealing with credit-worthy counter-parties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The economic entity measures credit risk on a fair value basis. The economic entity does not have any significant credit risk exposure to any single counter-party or any group counter-parties having similar characteristics. The carrying amount of financial assets recorded in the financial statements represents the economic entity’s maximum exposure to credit risk without taking account of the value of collateral or other security obtained.

c) Net Fair Value The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in note 1 to the financial statements.

d) Currency Risk The economic entity holds the majority of its funds in an Australian bank and periodically forwards British Pounds to its office in Egypt. The majority of transactions performed in Egypt are conducted in British Pounds or US dollars however a small reserve of Egyptian Pounds is maintained to meet day to day administration expenses. The economic entity has not entered into any forward foreign exchange contracts to hedge the exchange rate risk arising from any anticipated future transactions. As at 30 June 2004, Egyptian £589 (2003: £11,706), US$51,500 (2003: US$544,136) and GBP £1,914,914 (2003: £2,180,914), Euro €17 (2003: €17) bank balances were unhedged.


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33. Impact of the Adoption of Australian Equivalents of International Financial Reporting Standards Centamin Egypt Limited (“Centamin”) has commenced transitioning its accounting policies, systems and financial reporting from current Australian Accounting Standards to Australian equivalents of International Financial Reporting Standards (‘IFRS’). The process for identification of the key impacts on the consolidated entity includes the completion of an impact assessment to identify the significant financial and systems changes required and the proposed actions to transition to A-IFRS. The consolidated entity allocated internal resources to conduct an initial impact assessment. As Centamin has a 30 June year end, priority has been given to the identification of initial financial impacts under AASB 1 First Time Adoption of Australian Equivalents to International Financial Reporting Standards and the preparation of an opening balance sheet as at 1 July 2004. This will form the basis of accounting of Australian equivalents to IFRS in the future and is required when Centamin prepares its first comprehensive A-IFRS compliant financial report for the half year ended 31 December 2005. Set out below are the key areas where accounting policies will need to change with the possibility of financial impacts arising on transition to A-IFRS and in future reporting periods. Exploration Properties – Capitalisation of Exploration and Evaluation Costs On the transition to A-IFRS the requirements of AASB 1022 Accounting for Extractive Industries will no longer apply with no equivalent A-IFRS pronouncement covering exploration and evaluation expenditure. The International Accounting Standards Board (‘IASB’) has however released an Exposure Draft for consideration and future adoption under the improvements project. In the interim period to the release of the new IFRS standard for Extractive Industries, the treatment of exploration and evaluation costs under the Consolidated entity’s existing policies can be ‘grandfathered’ according to the proposed ED6. Consideration has been given to the requirements of the exposure draft and the exclusion of general administration and overhead costs from capitalisation. The requirement to expense general administration and overhead costs will reduce profits in future reporting periods. Further impacts are not determinable prior to the release of the new IFRS standard by the IASB. Asset Impairment and Recoverable Amount Under AASB 136 Impairment of Assets (Australian equivalent to IFRS), the recoverable amount of an asset or cash generating unit is determined as the higher of fair value less costs to sell and value in use. This will result in changes in the consolidated entity’s current accounting policy, the determination of cash generating units and the calculation of recoverable amounts based on discounted cash flows. Under the new policy it is likely that any impairment of assets will be recognised at an earlier date and the amount of the write-down may be greater. The exposure draft on Extractive Industries proposed applying the impairment test using an expanded definition of cash generating units for exploration and evaluation assets. The IASB and AASB are currently deliberating on the application of the test to exploration and evaluation assets, specifically where there have been no external transactions to support the value of the asset. Reliable estimation of the future financial effects of this change in accounting policy is not possible as the conditions and requirements under which impairment will be assessed are yet to be determined. Tax Effect Accounting Under AASB 112 Income Taxes (Australian Equivalents to IFRS), the consolidated entity will be required to use a balance sheet liability method which focuses on the tax effects of transactions and other events that affect amounts recognised in either the Statement of Financial Position or a tax-based balance sheet. Previously, the capital gains tax effects of revalued assets were not recognised. The recognition of tax losses will change from a virtual certainty criteria to a probability requirement. The financial impact of tax effect accounting and the tax effects of transitioning to A-IRFS are yet to be quantified.


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Share Based Payments Under Australian Standard AASB 2 Share-based Payment, the consolidated entity will be required to determine the fair value of options issued to employees and recognise an expense in the Statement of Financial Performance. For options on issue on the application of AASB 2 an adjustment for their recognition will be made against opening retained earnings. Reliable estimation of the future financial effects of this change in accounting policy is impracticable as the details of future equity based remuneration plans are unknown; however where share based payments are made, net profit is expected to decrease by the fair value of such payments. Property, plant and equipment On transition to A-IFRS, the entity has several options in the determination of the cost of each tangible asset and can also elect to use the cost or fair value basis for the measurement of each class of property, plant and equipment after transition. At the date of this report, the entity has not decided which options and measurement basis will be adopted and the likely impacts cannot therefore be determined. Business Combinations Under A-IFRS, the purchase method of accounting must be applied where there is a business combination, however, not all acquisitions will qualify as a business combination, and as such the purchase method of accounting for these acquisitions will no longer be appropriate. In addition, the legal acquirer may not be the acquirer per A-IFRS and the consolidated accounts may consequently reflect the fair values of the legal acquirers assets and liabilities rather than the fair value of the assets and liabilities of the legal entity acquired. Furthermore there are a number of recognition and measurement differences that result in relation to assets and liabilities acquired in a business combination, particularly in relation to intangible assets and restructuring provisions. Acquired contingent liabilities must also be recognised at their fair values where acquired in a business combination. The impact of these changes in accounting policy on first time adoption will depend on whether the consolidated entity will elect to adopt the exemption available to it to not reopen past acquisitions and retrospectively account for them appropriately. On an ongoing basis, this change in policy may significantly affect the profit and loss and balance sheet, as the accounting go forward significantly differs from the manner in which such transactions are treated under current Australian Gaap. Financial Impact At the date of this report the consolidated entity has not been able to reliably quantify the impacts of a transition to A-IFRS on the financial report at the transition date 1 July 2004.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 ADDITIONAL ASX INFORMATION _____________________________________________________________________________________________________

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AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is as follows. The information is as at 14 September 2004. SUBSTANTIAL SHAREHOLDERS (holding more than 5%)

Fully Paid Ordinary Shares Shareholder Ordinary Shares Percentage Willbro Nominees Limited 60,879,885 12.13% El-Raghy Kriewaldt Pty Ltd 55,299,372 11.02% HSBC Global Custody Nominees (UK) Limited 36,495,851 7.27% Goldman Sachs Securities (Nominees) Limited 28,250,000 5.63% Pershing Keen Nominees Limited 26,750,746 5.33%

TOP 20 SHAREHOLDERS (a) Fully Paid Ordinary Shares

Quoted Shares Number % Held Willbro Nominees Limited 60,879,885 12.13 El-Raghy Kriewaldt Pty Ltd 55,299,372 11.02 HSBC Global Custody Nominee (UK) Limited 36,495,851 7.27 Goldman Sachs Securities (Nominees) Limited 28,250,000 5.63 Pershing Keen Nominees Limited 26,750,746 5.33 BBHISL Nominees Limited 18,287,949 3.64 Nordana Pty Ltd <Super Fund Account> 17,595,714 3.51 Chase Nominees Limited 15,893,738 3.17 Euroclear Nominees Limited 14,649,000 2.92 HSBC Custody Nominees (Australia) Limited 8,321,715 1.66 Mr Brian Peter Byass 7,840,136 1.56 Yandal Investments Pty Ltd 7,252,512 1.44 Vidacos Nominee Limited 6,418,000 1.28 TD Waterhouse Nominees (Europe) Limited 5,685,988 1.13 Mellon Nominees (UK) Limited 5,509,616 1.10 T Hoare Nominees Limited 5,000,000 1.00 State Street Nominees Limited 5,000,000 1.00 Nordana Pty Ltd 4,990,668 0.99 Barclayshare Nominees Limited 4,664,523 0.93 Mr Azmi Wan Hamzah 4,600,000 0.92 Total 339,385,413 67.62

At 14 September 2004, there were 501,910,369 fully paid ordinary shares held by 2,025 individual shareholders. All issued ordinary shares carry one vote per share.

CENTAMIN EGYPT LIMITED ANNUAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2004 ADDITIONAL ASX INFORMATION _____________________________________________________________________________________________________

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(b) Options

Unquoted Options Number % Held Issued under Employee Share Option Plan 2002 5,040,000 95.27% Other 250,000 4.73% Total 5,290,000 100.00%

DISTRIBUTION OF HOLDERS OF EQUITY SECURITIES

Holding Range Ordinary Shares Unquoted Options 1 - 1,000 119 - 1,001 - 5,000 610 - 5,001 - 10,000 419 - 10,001 - 100,000 693 20 100,001 and over 184 6 Total 2,025 26

As at 14 September 2004, there were 410 shareholders with less than marketable parcel. CLASS OF SHARES AND VOTING RIGHTS The voting rights attaching to the ordinary shares, set out in Clause 12.8 of the Company’s Constitution are: “Subject to any rights or restrictions for the time being attached to any class or classes of shares” - (a) at meetings of members or classes of members each member entitled to vote may vote in person or

by proxy or attorney; and; (b) on a show of hands every person present who is a member has one vote for each ordinary share

held and on a poll every person present or by proxy or attorney has one vote for each ordinary share held.”

VENDOR SHARES There are no vendor securities on issue at the date of this report.

centamin egypt limited197 st george’s terrace 54 elbatal ahmed abdel aziz street perth wa 6000...

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