Release: Sumatra Copper & Gold: Exploration update for Tembang and Sontang

TEMBANG UPDATE
The Tembang project is located approximately 120 kilometres north-north east of Bengkulu in the Musi Rawas regency of South Sumatra province. Tembang is a large intermediate-sulphidation epithermal deposit comprising gold-silver bearing quartz veins hosted by Tertiary volcanics. The Company has rights to an IUP with an area of 9,979 hectares over and around the former Rawas mine that operated between 1997 and 2000.

A total of 6,140m meters of drilling have now been completed in this second phase programme at Tembang which was partially designed to test the continuity at depth of higher grade ore shoots at Berenai/Nuri and Belinau delineated by earlier drilling in 2010. Two deep holes (RDD 10108 and RDD 10112) have been completed under both the northern and southern shoots at Berenai and although they intersected wide zones of hydrothermal breccia there has been no significant quartz vein development or textures that would indicate higher grades are present. These holes are considerable step-outs and it is quite possible the ore shoots may continue below the significant intercepts previously reported in hole RDD 10067 (5.6 metres @ 6.91 g/t Au and 87.7 g/t Ag.).

RDD10108 Nuri/Berenai was completed to a depth of 400m. The hole intersected a zone of hydrothermal breccias with some quartz veining from 93 to 114m. Hydrothermal breccias were also found from around 129 to 154m, and at approximately 189 to 224m, and from 285 to 300m. No significant veining was intersected. The best result was 4.2 metres @ 1.72 g/t Au, 10.4 g/t Ag from 109.5 to 113.70 metres.

RDD10112 at Berenai was completed to a depth of 304m. The hole was designed to test for a high grade northern shoot indicated from earlier BTM drilling. The Berenai vein was intersected between 286.35 and 289.2m down hole (2.85m). Results are awaited.

Belinau
At Belinau, drilling has refined and largely closed off both the northern and southern shoots at depth and while typical high grade banded veining is present the zones are narrow (0.5m). Holes RDD 10103, 10104 have shown the southern shoot has no surface expression and RDD 10113 intersected a prospective but narrow vein from 301.2 to 301 .85m (0.65m) at depth. RDD10106 has effectively closed off mineralisation at depth on the southern part of the northern shoot.

Exploration drilling along strike to both the NE and SW whilst intersecting zones of veining and alteration has so far failed to intersect significant mineralisation.

Exploration
Exploration drilling following a previous significant intercept at Jenih (RDD10090 3.65 metres @ 4.12 g/t Au, 7.6 g/t Ag as announced in the September quarterly report) has failed to intersect any significant quartz veining. At Anita exploration drilling to test prospective dyke contacts did not intersect any veining or mineralisation. Three holes are being drilled at Bujang following up an earlier scout hole showing indications of a high grade epithermal shoot similar to Belinau.

Forward Strategy for Tembang
Whilst drilling over the past year has been successful in outlining the high grade Belinau shoots but has largely closed that structure off and has, so far, failed to find high grade depth extensions at Berenai/Nuri, the Directors believe that, given the backdrop of strong gold and silver prices, the best course of action going forward for the Company and its shareholders is to move ahead to bring the known resources at Tembang into production in the shortest possible time frame. To this end a resource update will now be expedited. Closer spaced drilling to upgrade the majority of Inferred resources to indicated will be undertaken.

Additionally scoping studies have been started to assess the optimal basis for the development of the Tembang project utilising the resources already established and including the high grade zones, particularly at Belinau, that were delineated by the 2010 drilling. Both open-pit and underground scenarios, particularly at Belinau with its high grade shoots similar to Way Linggo, or a combination of both, are being evaluated.

SONTANG
Sontang is situated in an exploration IUP 297.25 km2 in area in the regency of Pasaman in the province of West Sumatra, approximately 160 kilometres north of Padang, and immediately adjacent to the boundary with the province of North Sumatra. North Sumatra is host to the advanced gold projects of Martabe and Sihayo Gold.

Drilling has now been completed at both East Sontang (PDD10001-6) and Central Sontang (PDD 10007, 8 and 9). A further shallower zone of massive sulphide mineralisation was intersected in PDD10003 (5.3 metres @3.54 g/t Au, 124.1 g/t Ag, 0.14% Cu, 0.38% Pb, 12.00% Zn from 61.80 to 67.10 metres as previously reported on the l5? December) of 1.65 metres of 0.7 g/t Au, 18.4 g/t Ag, Cu 0.01%, Pb 0.06% and 2.79% Zn from 57.55 to 59.2 metres. Assay results for PDD 10006 which intersected over 9 metres of disseminated pyrrhotite + pyrite mineralisation with localised galena and sphalerite returned only weakly anomalous results.

At Central Sontang PDD 10008 intersected two zones of massive sulphide mineralisation; 8 metres @ 0.19 g/t Au, 214 g/t Ag, 0.01% Cu, 2.35% Pb, 7.70 % Zn from 21.70 to 29.7 metres (this includes 5.5m @ 0.26g/t Au, 297g/t Ag, 0.01% Cu, 3.31% Pb and 11.03% Zn) and 0.5 metres @ 0.13 g/t Au, 215 g/t Ag, 0.01% Cu, 3.50 % Pb and 7.25% Zn from 31.3 to 31.8 metres. Results are pending from holes PDD 10008A drilled down dip and PDD 10009 drilled from the same site at a different azimuth. Strong shearing at the limestone/sandstone contact where the massive sulphide mineralisation occurs indicates offset by post mineral faulting.

Scout drilling is currently underway in West Sontang where two deeper holes PDD 10010 and 10011 have been completed in coincident copper-arsenic geochemical and magnetic anomalies. Whilst zones of massive sulphide have been intercepted ranging from 0.5-1 metre wide, quartz + pyrite + galena + sphalerite stockwork zones have also been encountered over tens of metres which is encouraging and might suggest a possible bulk tonnage target style of mineralisation. PDD 10012 is now in progress and has intersected three zones of massive suiphide and quartz vein mineralisation quite distinct from East Sontang with visible chalcopyrite, galena and sphalerite. The apparent thickness of these zones is 19 metres.

At North Sontang pitting is mostly complete and three drill sites are planned to test the widespread copper gold soil anomaly. This is the largest soil anomaly discovered to date sitting on top of limestone.

Summary
Managing Director, Jocelyn Wailer, comments: ?We are disappointed the deep drilling at Tembang has not delivered the depth extensions we were hoping for; however this should not detract from the excellent results we have previously had In defining high grade shoots at both Belinau and Berenai which remain open below the current resource outline. We now intend to fast track this project into development on the basis of the ore resources already established. Scoping studies are already under way and we will keep the market fully appraised of progress and results. We believe this should be a robust project utilising the footprint of the Rawas mine development of the late 1990s. This will facilitate permitting.

We continue to be pleased with the drilling results we are getting at Sontang. Almost every hole so far has intersected poly-metallic mineralisation with really significant grades. To add to this we await with expectation the assays from the holes already drilled at West Sontang based on what we see in the core and then what the rich soil anomaly at North Sontang will produce once drilled. It is early days but Sontang is shaping up very encouragingly.? (end of edited release)