Sihayo: DFS shows indications of improved gold project economics

ASX-listed Sihayo Gold Limited said that ongoing revision of the definitive feasibility study (DFS) of its 75 percent-owned Sihayo Pungkut gold project in North Sumatra shows initial indications of a significant improvement in project economics.

?The improvement is due to a number of major factors including an increased production rate, reduced operating costs by using owner mining, reduced TSF requirement and the inclusion of PLN (state-owned electricity company) power,? Sihayo said in a statement on Tuesday.

The company explained that the resource is being re-modelled using more structural definition to help clarify anomalies, although it is unclear what impact this will have on the resource estimate. The new model will then be used as the basis for optimization and reserve estimation.

The revised mining schedule will take into account the need to provide, as early as possible, a mined out pit for tailings and waste back-filling.

No additional drilling or testwork is planned for the DFS as the historical data is considered sufficient. Sihayo expects the DFS to be completed by the end of this year.

Sihayo Gold Limited said late in July the Sihayo gold project was undergoing a significant revision in the base process flowsheet and in operational concepts to bring it back in line with a more appropriate Indonesian costing and robust design.

The Sihayo gold project is located within a Generation VII Contract of Work (CoW) located in Northern Sumatra Indonesia. The company holds an interest in the project through 100 percent ownership of Aberfoyle Pungkut Investments Pte Ltd (API). The CoW is held by PT Sorikmas Mining (Sorikmas) which is operated under a Joint Venture arrangement between API (75%) and PT Aneka Tambang (25%).

Editing by Reiner Simanjuntak