Sihayo reports N. Sumatra gold project update
Thursday, April 30 2015 - 07:51 AM WIB
1. Corporate
The Company entered into Convertible Loan agreements with Provident Minerals Pte Ltd (Provident) and PT Saratoga Investama Sedaya (SIS) on March 10th 2015.
Provident and SIS are both major shareholders of the Company and each loan is for a total of USD500K.
The loans will have a 12 month maturity, 7% interest rate and may be converted to shares, at the option of the lender, at a rate of 70% 10 day VWAP at the time of conversion.
Directors have negotiated this outcome in the best interests of the Company and all Shareholders.
As at 30 April, the Company has drawn USD 900,000.
As at 31 March the company had a cash balance AUD 46,000.
2. Sihayo Pungkut Gold Project
The Sihayo Pungkut Gold Project is located within a Generation VII Contract of Work (CoW) located in Northern Sumatra.
The Company holds an interest in the Project through 100% 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% (ANTAM).
The Project has Mineral Resources of Measured, Indicated and Inferred containing 1.4M gold ounces1 reported in accordance with JORC 2012 within which is contained a combined Proved and Probable Ore Reserve of 554,000 gold ounces2.
The Company continues to work toward completion of Statutory permitting & approvals as well as investigation of opportunities to further optimise the results of the feasibility study announced in relation to the Sihayo Pungkut Gold Project (?the Project?) on 29 January 2014.
Permitting and Approvals
Key permits for the project to progress to the construction phase are as follows:
- A Government of Indonesia Feasibility Study was submitted during February 2014 comprising technical and financial information in support of the project. The Company announce receipt of ?initial? approval of this submission on 24 September 2014.
- The AMDAL assessment is used by the Ministry of Environment (KLH) as an instrument for supervision over the project and regional development in the area of the operation.
? Our submission in relation to the ?terms of reference? (KA-ANDAL) for this assessment was approved 14 October 2014.
? Following our submission on 8 December 2014 the Company was requested to attend Technical and Plenary review sessions of the Environmental and Social Impact Assessment (ANDAL), the Management Plan (RKL) and the Monitoring Plan (RPL) with the Department of Environment (KLH) and local stakeholders respectively during February 2015.
? Collectively known as AMDAL a revised submission of these documents, incorporating feedback received from the technical and Plenary Sessions, was submitted to KLH on 14 April 2015.
We await approval regarding this submission, following which we can apply for issuance of an Environmental Permit from the Minister of Environment.
? Forestry or ?Borrow and Use? (Pinjam Pakai) permitting from the Forestry Department must be completed subject to receipt of final permits on the above.
At the time of writing all permits required for obtaining a Construction permit have been initiated (except for Forestry Permit) and, other than some additional clarification required on our submissions, we await approvals to proceed.
Feasibility Study Optimisation
The company continues to pursue a number of scenarios that will optimise outcome of the 29 January Feasibility Study.
a) Power Supply
We are in receipt of an alternative approach to power supply which considers the use of leased power generation equipment with diesel fuel and natural gas fuel (?dual fuel?) which delivers a significant cost reduction to the project.
Assuming prices of US$0.80/litre and US$18.10/gJ respectively for diesel and natural gas, power costs for the project are indicated at US$0.21 ? US$0.23 per kWh based on diesel usage of 50% - 100% per kWh required. (Previously US$0.35 per kWh using 100% diesel)
Assuming no other changes, this delivers a significant improvement on our previously announced 29 January 2014 ?SIHAYO ?MAIDEN? ORE RESERVE & FEASIBILITY STUDY COMPLETION? as follows;
- Average Site Cash Operating Costs1 US$691 - US$704/oz processed (Previously US$775.65/oz)
- US$74 ? US$77M LOM NPV8 estimate (Pre Tax & including Royalty) assuming gold price at $1,400/oz. (Previously US$57.5M)
Our discussions continue with the local and regional power supply regulator in relation further potential power cost reduction via a potential power supply contract associated with a future local grid connection and associated infrastructure.
b) Mining Costs
We are working with ?in country? service providers in relation to optimisation of our Mining plans and cost estimates.
A number of Confidentiality Agreements have been signed with potential sources of project funding following preliminary discussions about financing for the project. (end of edited excerpt)