Sihayo to update on gold project?s DFS

By Ruli Setiawan

ASX-listed Sihayo Gold Limited considering to re-examine its for its 75 percent owned Sihayo Pungkut Gold Project, located in North Sumatra, Indonesia following the current challenging market conditions as a result of a substantially lower gold price in recent months and deteriorating equity and debt markets.

The company would update on definitive feasibility study (DFS) for the project.

In addition, detailed modeling that has recently been completed on the ?Staged Development? approach for the project indicates a significant increase in site cash operating costs, primarily due to the necessity to undertake a substantial amount of early waste stripping in the pit which is required to sustain production at the proposed 1.0 - 1.3 Mtpa of ore throughout the mine life.

Consequently, the company considers it is necessary that the project is re-examined and potentially re-configured to identify the optimum project development path, the statement said on Monday.

?In this challenging market, Sihayo will take additional time in order to maximize opportunities and shareholder value? says Mr. Stuart Gula, Chief Executive Officer.

Mining schedules, process plant configuration, overhead cost and productivity will now focus on the near surface mineralization only, with the objective of improving project economics and minimizing the payback period on initial capital.

Capital requirements are expected to be altered accordingly to match alternative throughput rates that may result.

Results from the final phase of DFS metallurgical test work, being undertaken by P.J. Lewis & Associates Pty Ltd, will be included as these become available.

Editing by Adianto P. Simamora