Significant gold intersected at Sihayo 1 Prospect

Australian gold explorer Oropa Limited announced on Tuesday significant new gold drill intersections from the Sihayo 1 prospect located immediately south of the Sihayo 1 North resource (910,0000z Au at 2.4g/t) in its Pungkut gold project, North Sumatra.

The results come on the back of recent exploration drilling at the Old Camp and Sihayo 2 prospects which also identified significant zones of gold mineralisation to the north and west of the existing resource, the company said.

Exploration drilling surrounding the Sihayo resource over the past 4 months has now identified three large exploration prospects with broad areas of gold mineralisation, Old Camp, Sihayo 2 and Sihayo , it added.

?This drilling has shown that utilising the new geological models, there is significant potential to expand the near surface resources at Sihayo. Currently the total resource on the 4 kilometre long Sihayo trend stands at 1.01 million ounces of gold at 2.4g/t,? it said.

Recent drilling at Old Camp immediately east of the Sihayo 1 North resource intersected mineralisation over more than 400 metres of strike length. Better intersections from Old Camp included 27m at 2.4gIt Au from surface, 13m at 4.2gIt Au from 6 metres and 8m at 3.lglt Au from 34 metres. The mineralisation remains open along strike in both directions.

At the Sihayo 2 Prospect, located 500m north of the Sihayo 1 North resource, recent drilling intersected a broad zone of gold mineralisation over lg/t. The drilling is still at an early stage and the mineralisation remains open in most directions. Better results included 14m at 1.lgIt Au from 3 metres and 6m at 1.5g/t from 45 metres. A full list of the significant results from Old Camp and Sihayo 2 is included in the 2009 Annual Report.

The company has recently completed a significant capital raising which will be utilised to carry out the Feasibility Study on the existing resource and continue exploration on the Sihayo trend. The Feasibility Study will be conducted on the current resource on which SRK Consulting completed a positive Scoping Study in late 2008. The study estimated cash costs based on a 1 Mt per annum operation at US$440 per ounce with an NPV of US$50 million at a gold price of US$850 per ounce. Sensitivity analysis estimated the NPV would increase to US$120 million at a gold price of US$1000 per ounce

The company has contracted a local drilling company to provide a further three diamond drilling rigs in addition to the current operating rig as part of the build up of feasibility and exploration activities. The aim of the exploration will be to identify new resources which could significantly increase the life of the project.(alex)