Oropa says N. Sumatra gold project to start production 2012

Australian gold exploration firm Oropa Limited, which will soon change name to Sihayo Gold Limited, expects production from its Sihayo/Pungkut gold project in North Sumatra to start production in mid-2012.

The company revealed in an Annual General Meeting presentation on Friday that Definitive Feasibility Study (DFS) would be completed by late 2010 with approval and construction to take place in 2011 to mid 2012.

The company said feasibility team has commenced works and resource drilling to upgrade resources from inferred to measured is underway with four drilling rigs contracted.

According to the scoping study which will be the basis of the DFS, the project will have 10 years of mine life with annual throughput of 1 million tonnes of ore and production of above 60,000 ounces per annum. The scoping study concluded that the project is feasible at gold price of US$800 per ounce.

Beside the existing inferred resources of 1.1 million ounces, the project has excellent potential to extend resource base and mine life, and the company will conduct exploration drilling parallel with DFS to extend resource base, it added.

The company said in October 2009 that according to the scoping study, the company might need $75.6 million to develop the project.

Oropa has 75 percent stake in the project with IDX-listed state miner PT Aneka Tambang Tbk holding the balance. (alex)