Sumatra Gold updates Tembang project

By Ruli Setiawan

ASX-listed Sumatra Copper & Gold plc announced on Monday that the ongoing Phase 3 resource in-fill and extensional drilling program at its flagship Tembang Gold-Silver Project in Bengkulu, is progressing well with excellent results received to date across key deposits.

The drill program commenced in December 2013 with the objective of defining additional Measured and Indicated Resources. This followed the updated Mineral Resource estimate and revised life-of-mine (LOM) plan completed last year as part of the overall optimisation of the Tembang development plan.

The Phase 3 drill program is a key part of the company?s strategy, and is designed to extend the mine life of the operation, increasing its debt-carrying capacity and minimising the need for additional shareholder dilution through a more substantial equity raise.

Drilling has been completed at the Berenai, Tembang-Anang, Asmar and Belinau deposits whilst drilling is still ongoing at the Siamang and Bujang deposits, and is due to be completed later this month along with additional geotechnical and metallurgical drilling.

To date a total of 5,532 meters has been drilled in 64 holes at Asmar, Berenai, Siamang, Tembang-Anang and Belinau. The drilling program has been planned and executed in consultation with Cube Consulting Pty Limited to maximize conversion of Mineral Resources to Ore Reserves.

Berenai
Background: The Berenai deposit formed the backbone of the previous gold silver production in the period between 1997 to 2000 as this deposit is both high grade and the veins are relatively wide. The current resource is located below and along strike of the main pit left over from the previous mining operation. The Berenai Resource is a composite of 3 separate vein systems: Berenai, Central and Nuri. The Berenai deposit made up 26% of the contained gold in the Resource published in September 2011 in accordance with the JORC 2004 Code. The previously published Berenai Resource was based on 35,951.65 metres of drill data, comprised of 54% diamond drilling and 46% of RC drilling.

The Berenai pit was originally scheduled for Stage 2 of the planned production program and will require a 6 month dewatering program to remove the water in the current pit. However, as a result of the Company optimising the Life of Mine (LOM) plans using a gold price of between US$1,000 and US$1,150 per ounce, the Berenai deposit is now being considered as a possible inclusion in the first 5 years of the LOM plan.

Phase 3 Drill Program: The drill program at Berenai is aimed at replacing the previous DC drill holes with diamond core holes within a nominal whittle pit optimised at US$1,000 per ounce gold on the 2011 resource model.

The target is to produce a new Resource in compliance with the JORC Code 2012 that is comprised of 100% Diamond drilling.

At Berenai 24 holes were drilled for a total of 2,407.5 metres. The drilling was targeted within a re-optimised pit over the southern shoot. Drilling successfully intersected the targeted zones of mineralisation, with typically wide zones (up to 20 metres of quartz veining and hydrothermal breccia at the intersection of the Berenai and Central Veins.

Some very wide intersections were returned including 13.2m @ 1.89 g/t Au, 14.1 g/t Ag from hole RDD 14368, as well as high grades such as 9m @ 3.98 g/t Au, 8.5 g/t Ag from hole RDD 14380; 12m @ 4.28 g/t Au, 5.5 g/t Ag from hole RDD 14386; 6m @ 9.95 g/t Au, 10.9 g/t Au from hole RDD 14390; and 6m @ 9.65 g/t Au, 38.2 g/t Ag from hole RDD 14388. Resource modelling is now underway.

Tembang-Anang
Background: The Tembang-Anang deposit was never mined during the original mining phase in the period 1997 to 2000. The Tembang/Anang Deposit made up 6.5% of the contained gold in the Mineral Resource published in September 2011 in accordance with the JORC 2004 Code. The previously published Tembang-Anang Mineral Resource was based on 9,709.8 metres of drill data comprised of 25% diamond drilling and 75% RC drilling.

Phase 3 Drill Program: The drill program at Tembang-Anang is aimed at replacing the previous RC drill holes with DC drill holes within a nominal whittle pit optimized at US$1,000 per ounce. The target is to produce a new Mineral Resource in compliance with the JORC Code 2012 that is comprised of drill data that is based on Diamond drilling.

At Tembang-Anang 21 holes were drilled for a total of 1,541.7 meters. The drilling was targeted within a shallow re-optimised pit along the vein systems. The Tembang vein was consistent in width and grade along its entire length and is open at depth and along strike to the south-east. During the drilling program the northern extension of the Asmar vein systems were identified and have returned consistent results at the intersection with the Tembang Vein system.

Anang or the continuation of the Asmar vein systems to the north-east was consistent in grade but narrower than the previous 2011 vein wireframe.

Consistent width and grades were intersected along the entire 300 metre strike length of the system, which is still open at depth and along strike.

Results include 6.4 m @ 2.26 g/t Au, 14.8 g/t Ag from hole RDD 13358; 3.85m @ 4.20 g/t Au, 25.6 g/t Ag from hole RDD 14399; and 2.6m @ 5.41 g/t Au, 30.7 g/t Ag from hole RDD 13356. A continuation of the Asmar vein system was also identified and abuts the Tembang vein in the north-west. Intersections from this zone include 8.5m @ 2.8 g/t Au, 25.9 g/t Ag from hole RDD 14401.

Resource modelling is planned to commence this month.

Asmar
Background: The Asmar deposit was originally included in the Stage 1 LOM, used in the DFS Study and published in September 2012. The Asmar deposit is more of a stockwork type deposit rather than discrete veins and is relatively low grade but has a relatively low strip ratio.

The Asmar deposit was previously mined during the original mining phase in the period 1997 to 2000 and a small open pit remains. This pit was dewatered prior to the Phase 2 drill program completed in November 2013 and during this phase, all the RC drilling was replaced with Diamond drilling and a new Mineral Resource published in December 2013 in accordance with the JORC 2012 code. The resource model update included 73 diamond drill holes for a total of 8,392 meters and resulted in 53% in the Indicated Resource category wth the remaining 47% in the Inferred Resource category.

One final hole from the phase 2 drill programmed RDD 13321, intersected 20 meter @ 2.47 g/t gold and 64.7 g/t Ag, from 47 meters below surface however was not included in the resource update. As a result this mineralized zone fell outside the LOM Pit as published in December 2013.

Phase 3 Drill Program: The Phase 3 drill program has been targeted to convert Inferred Resources to Indicated Resource category to increase bankable ounces. The program also targeted extensions of high-grade shoots at the periphery of the previously outlined LOM pit.

At Asmar 6 holes were drilled for a total of 354.8 meters. Typical low to moderate grade mineralization hosted by quartz veining, stock work and shear zones were intersected with higher grades within individual veins. For example hole RDD 13351intersected 6.8m @ 1.36 g/t Au, 11.8 g/t Ag with localized high grades within individual veins such as 3m @ 5.63 g/t Au, 44.2 g/t Ag

Resource modeling is well underway for this deposit.

Belinau
At Belinau, 3 holes were completed for a total of 726.6 meters. The holes were targeted at depth in the southern shoot to convert Inferred to Indicated Resources. All holes successfully intersected the target vein which ranges in thickness from 0.3 meters to 1.1 metres thickness.

Results for these holes show that the tenor of the mineralization is weakening at depth on these sections. The best result was from RDD 14406, which returned 1 meter @ 4.19 g/t Au and 3 g/t Ag.

Siamang and Bujang
Drilling is ongoing at Siamang and Bujang within optimized pit shells. At Siamang, 4 holes have been completed for a total of 212 meters. At Bujang, 3 holes have been completed for 289.4 meters.

At Bujang in particular, confirmation drilling has intersected wide zones of quartz veining from 3.25 meters to 6.1 meters, which is very encouraging.

Editing by Johannes Simbolon