Sumatra Copper & Gold updates Indonesian projects
Friday, July 29 2011 - 02:09 AM WIB
OPERATIONS
2.1 Tembang
The Tembang project is located approximately 120 kilometres north-northeast of Bengkulu in South Sumatra province. The Company has rights to an IUP with an area of 100 km? over and around the old mine-site.
2.1.1 Tembang Prefeasibility Study Activities
Prefeasibility work for the quarter has included the completion of the infill drill program which will allow the Resource Statement to be updated. The Company expects to publish an updated resource estimate in late August.
The metallurgical drilling program also completed in July. The preliminary metallurgical results from individual pit composites are encouraging. These results are also expected to be published in August. The metallurgical variability tests are expected to be complete in the September quarter. Site visits by all consultants were completed in June with preliminary locations for both tails dam and plant identified.
The Company has appointed PT MAL Sriwijaya from the University of Sriwijaya in Palembang to complete the Environmental Impact Assessment (AMDAL) process. The permitting process is the project critical path and is scheduled to be completed in the June 2012 quarter.
2.1.2 Tembang Development Timetable
The Company will complete the preliminary engineering and study details in the next quarter to allow the commencement of the AMDAL permitting process which is the critical path activity for Tembang?s development.
Staged Development
The conceptual 1 million tonne per annum process plant and preliminary Whittle Pit at a US$1,500 per ounce gold price is shown in the figure below. This plan also shows the location of the valley fill tails storage area. The environmental footprint shown in this diagram is relatively large, leading the Company to investigate a staged development plan for Tembang.
The plan will involve initial development of the high-grade Belinau resource, utilising existing infrastructure for the tails storage in Stage 1. Stage 2 will involve expansion of the process facility to allow for increased plant capacity to treat the low grade ore from the remaining resources. Tails storage for Stage 2 will likely be the valley fill tails storage facility as outlined in the figure below.
The Company?s staged development strategy is likely to reduce the time to production by a year. It will also allow a significantly lower capital intensity for Stage 1 which is more in line with the Company's current financial capability, Consequentially, the Company will revise the scope of the current Prefeasibility Study to include a staged development of Tembang. This will delay the completion of the Tembang Prefeasibility Study by two months so that completion is not expected until mid way through the December quarter. However, the Company will progress the permitting process as originally planned. This delay is not expected the increase the project's critical path schedule.
A 5,000 metre in-fill drilling program is almost finished and is designed to bring the majority of the inferred resources that lie within the US$1,000 pit optimisation to at least the indicated category. Once complete Hellman and Schofield will be commissioned to undertake and sign off on the resource estimates which will be the basis for the definitive feasibility study to commence in the third quarter of 2011.
Berenai
Drilling results have been in line with expectations. However a wide intercept of hydrothermal breccia and veining was intersected in hole RDD11147 at Berenai which returned 27.4 metres @ 1.25 g/t Au and 15.3 g/t Ag from 144.1 to 171.5 metres.
RDD 11175 drilled below the southern shoot, where the Company reported its best ever intersection in hole RDD11126, intersected an extensive zone of quartz veining and hydrothermal breccia which returned 32.8 metres @ 1.99 g/t Au, 13.2 g/t Ag (true width is 11 metres) the intersection included a higher grade section grading 13.6 metres @ 3.20 g/t Au, 8.2 g/t Ag (true width 4.5 metres). The result will extend the resource and bolster grades.
Asmar
Results have generally been in line with expectations at Asmar with a best result of 4.0 metres @ 24.47 g/t Au and 67.8 g/t Ag from 71.6 to 75.6 metres in hole RDD 11148. The best result in the halo mineralisation was 2.0 metres @ 6.36 g/t Au and 13.3 g/t Ag from 164.0 to 166.0 metres in hole RDD11158.
Buluh
Some very good results were returned from the infill drilling at Buluh where hole RDD11159 returned 5.1 metres @ 5.23 g/t Au and 31.3 g/t Ag from 91.8 metres to 96.9 metres downhole and hole RDD11162 yielded 1.8 metres @ 4.40 g/t Au and 9.8 g/t Ag from 98.2 to 100.0 metres downhole.
Waste Dumps
Further good results were returned from the main waste dump during the infill drilling. The best result was from Asmar which returned 14.3 metres @ 0.55 g/t Au and 6.4 g/t Ag from 2.7 to 17.0 metres downhole in hole RDD11158. At Nuri RDD 11145 returned 6.0 metres @ 0.59 g/t Au and 1.5 g/t Ag from 2.0 to 8.0 metres downhole. The waste dumps will not be included in any feasibility studies.
Belinau
At Belinau significant intercepts were returned in hole RDD11169 which encountered 4.0 metres @ 5.42 g/t Au, 101.7 g/t Ag from 92.8 to 96.8 metres and from Hole RDD11139 which intersected 1.5 metres @ 4.47 g/t Au, 6.8 g/t Ag from 213.0 to 214.5 metres. This hole has extended the northern high grade shoot which is an excellent result. A shallow hanging wall vein was intersected during drilling in hole RDD 11167 which returned 6.0 metres @ 0.56 g/t Au and 32.9 g/t Ag from 14.6 to 20.6 metres downhole.
District Exploration
Exploration is continuing to outline further highly anomalous gold and arsenic results from rock chip and soil geochemistry at both the North Tiku and Racambai prospect areas. New outcrops of hydrothermal breccia up to 5 metres wide have recently been discovered at Racambai. Detailed ground magnetics is now being used in conjunction with soil sampling and geological mapping to better outline exploration targets.
We are reviewing our existing geophysical dataset over the district due to a better understanding of the relationship of gold mineralisation to structure and dyke orientation. This review will most likely result in more ground geophysics to better define blind potentially high grade shoots.
2.2 Sontang
The Sontang Project is located approximately 160 kilometres north of Padang. Sontang comprises the virgin discovery of a high-grade polymetallic manto, made by the Company?s geologists in ground previously explored by other companies.
After a comprehensive review of the project and the recent drilling activities the Company has elected to continue with a low cost reconnaissance based exploration program investigating other anomalies with the IUP. This has already achieved good results with banded epithermal quartz float discovered in the Simpang Godang area in the south west part of the licence area. This area lies along a major WNW trending regional fault and there are numerous alluvial gold artisanal workings nearby. The Company has also elected to look for joint venture partners to assist in exploration of this property including the prospective East Sontang discovery in the light of concentrating its activities on the development of Tembang.
Drilling
Assay results from the re-sampling of Sontang drill holes returned some interesting results including PDD 10004 which returned 1.9 metres @ 2.43 g/t Au, 111.6 g/t Ag, from 3.0 to 4.9 metres and PDD 11017 which intersected 0.8 metres @ 0.43 g/t Au, 15 g/t Ag, from 116.2 to 117.0 metres. The latter intersection is the last hole in Sontang east which indicates mineralization may be derived from manto massive sulphide fragments in post mineral sedimentary breccias and may be open at depth as well as along strike.
Assay results from Sontang west and Central indicate that the gold and base metal mineralization is largely contained within the massive sulphide lenses and at this stage a bulk tonnage target is not evident.
East Sontang Mapping
As part of the recommendations by our geological consultant mapping was carried out in the south east streams draining Sontang. Minor massive sulphide float was observed which indicates this zone of mineralisation may continue under cover to the south east of the last drill hole PDD 11017.
2.3 Tandai
The Tandai project is located within the northern part of the Bengkulu Utara IUP, in the Kabupaten of Bengkulu Utara, approximately 100 kilometres north of Bengkulu. Tandai has a long history of formal mining from the early part of the 20th Century until post World War II. The Company?s tenements control a district in which at least three Dutch companies worked portions of the system. The old Dutch mining town at Tandai still remains, and was re-furbished by PT Lusang Mining Ltd (in a joint venture with CSR, then Billiton) when the mine was redeveloped and worked between 1985 and 1995.
Under the arrangements agreed with Newcrest Mining on 17 August 2010 Newcrest has the right to earn a 70% interest in the Tandai tenement by spending US$12 million on the project with a minimum spend of US$1.75 million.
During the quarter, the Company?s exploration activities have focused on drilling Glumbuk, Toko Rotan and the exciting Lusang North prospect. The regional program has also commenced and has already located very promising epithermal float samples.
Glumbuk
Glumbuk is a greater than 3 kilometre long gold bearing structure that has previously been mined by the Dutch at Karang Suluh to the east. The structure widens considerably on the eastern boundary of the IUP and consists of veins and breccia zones over 100 meters width. It is overlain by young post mineral volcaniclastic cover to the west. A fence of holes was designed to test the continuity of this wide zone of veining.
A total of 1059.2 metres was drilled in three holes. The holes were designed to test the southern (TDD11016), central (TDD11017) and northern (TDD11018) zones of extensive surface and underground veining outlined from mapping and sampling in the previous quarter. All the holes intersected zones of hydrothermal breccia and veining up to 5 meters wide hosted by andesite.
Results have been received for two holes TDD 11016 and TDD 11017. The best intercept was from 116.0 -117.0 metres which returned 2.67 g/t Au and 30.0 g/t Ag. TDD 11017 was barren.
Toko Rotan
The Toko Rotan prospect is located about 1.7 kilometres north of the main Tandai Lode. This prospect was outlined by the Company?s consultant geologists as a potential target based on surface manifestation of breccia and veining and localised multi phase sulphidic breccia assaying up to 1.21 g/t Au.
Mapping and sampling along strike of the hydrothermal breccia and veining zone at the Dutch Dam has continued to expand the delineated zone of silica ? clay ? pyrite alteration and base metal sulphide contents seem to be increasing to the west. Several broadly north ? south trending fault breccia zones have also been identified.
Three holes have been planned in Toko Rotan to test the best zones of alteration and veining, along with the highest surface geochemistry. The first hole TDD 11019 intersected porphyritic andesite for its entire length. Two narrow but mineralised zones were intersected at 188.6 metres - a 0.4 metre quartz vein zone with fine grey sulphide. The second zone of interest was at 290.7 metres and is a 0.2 metres quartz vein breccia with 5mm aggregates of galena, sphalerite, and chalcopyrite. Assay results are pending.
Lusang North
Mineralisation in the area is hosted in high grade quartz veins and hydrothermal breccias grading up to 104 g/t Au, 259 g/t Ag, 0.78% Cu, 1.36% Pb, 1.27% Zn (previously reported). The association of base metals and proximity to the main Tandai lode make this a compelling exploration target. Geological mapping is continuing to extend this zone along strike with the aim of outlining drill targets during the current program.
Lusang North to Toko Rotan Corridor
A series of east-west trending silica + clay outcrops occur in this area which are interpreted to be the upper manifestations of similar vein breccia systems at Tandai. Productive highlighted several coherent anomalies. Soil geochemical sampling has highlighted several coherent anomalies. Several of the anomalies will be drill tested during the current first phase drill program due to their proximity to the Dutch Dam prospect.
Geophysics
The Controlled source audio-frequency magnetotellurics (CSAMT) survey over Tandai, Glumbuk and Toko Rotan areas has been completed. All raw data files have been forwarded to our consultants for processing. Several moderate to strong resistors have been identified from the preliminary data. Once the processed and interpreted data is received this will be combined with geological and geochemical data to target future drilling.
Regional Exploration Program
The planned IUP scale regional exploration program got underway in June. The plan involves an intensive stream sediment and BLEG program running in conjunction with prospecting and mapping of areas identified either from the high resolution quickbird satellite imagery or from a review of the historical sampling over the IUP. The program as planned will result in the collection of 265 stream sediment and 73 BLEG samples. In June a total of 51 stream sediment and 9 BLEG along with 12 rock float samples were collected. Some of these float samples were very promising multiphase epithermal vein float similar to what we see in the Tandai district.
Further Program
Budgets are being finalised for the 2011/2012 period and we expect to maintain the aggressive district scale drill intensive program testing a combination of geophysical, geochemical and geological targets. The best exploration targets from the regional program will also be fast tracked to drill status if results are warranted.
2.4 Musi Rawas
Exploration activities have been focused on the Tembang district in the light of accelerated timeline for project development. Promising results continue to be returned from Racambai and North Tiku. following up previous vein and recently discovered sediment hosted mineralisation at the Upper Minak area. This prospect is approximately 15 kilometres north of the Tembang development project so any discovery here will potentially benefit the project.
2.5 Jambi
Assay results were received from the regional stream sediment sampling of the south western part of the Jambi IUP during the first quarter. Four of the twenty samples returned above 10 ppb Au including a high sample of 72.8 ppb Au. Three of the four significant samples were from the Kunyit river, whilst one significant sample is from upper reaches of the Batangasai river. It is possible that the source of the anomalous samples is shedding from a topographic high located east of the Kunyit river and south-southwest of the Meleko river. This area will be followed up as a first priority when exploration resumes later this year.
2.6 Madina and Kotanopan IUPs
Exploration work is planned early in the third quarter of this year to follow up stream sediment anomalies in the A.Mais and A.Sibanel drainages outlined in 2010.
2.7 Generative
The Company is actively pursuing generative opportunities in west and north Sumatra to add quality properties to its exploration portfolio. (end of edited release)