Sumatra Copper & Gold provides update on Tembang gold project
Tuesday, September 17 2013 - 04:55 AM WIB
ASX-listed Sumatra Copper & Gold Plc provided Tuesday the following update on a number of initiatives currently being implemented to optimize its Tembang Gold-Silver Project, located in Sumatra, in response to ongoing volatility in gold and silver markets and changed conditions in credit markets.
The company said in a statement that proposed changes, to be underpinned by the new mine plan foreshadowed in recent announcements, are expected to result in a significantly more robust project. However, the timeline to production is likely to be delayed by the later than expected draw-down of debt funding. The company expects to update the completion schedule in Q4 of 2013, together with a detailed cost-to-completion budget.
In February 2013, Sumatra announced a funding package for Tembang comprising A$28.6 million of equity and US$35 million of debt finance. Credit approval was received on 21 February 2013 from the company?s project financier, Credit Suisse, for US$30 million in senior debt finance facilities plus up to US$5 million in cost overrun funding.
The sharp fall in the gold price in the June 2013 Quarter and subsequent volatility in gold and silver markets resulted in a downward revision of the prices used by the project financiers to evaluate the debt-carrying capacity of the Tembang Project.
Debt funding conditions have also become more stringent across the industry, and Sumatra has since been working to develop an optimised mine plan and address the more stringent conditions imposed as part of the project funding package, including a requirement to upgrade all Mineral Resources to 2012 JORC compliance.
Tembang Gold-Silver Project has Proven Reserves of 2.4Mt at 2.5 g/t Au and 38.7 g/t Ag for a total of 0.2Moz of gold and 3Moz of silver and Probable Reserves of 3.1Mt at 2.1 g/t Au and 25.6 g/t Ag for a total of 0.2Moz of gold and 2.5Moz of silver (total of 0.4Moz of gold and 5.5Moz of silver) which are compliant with the 2004 JORC Code.
Editing by Reiner Simanjuntak