www.sumatracoppergold.com
Sumatra Copper & Gold plc (ASX:SUM) was established in 2006 to explore for, and develop, gold-silver and copper-gold mineral deposits on the Indonesian island of Sumatra. The Company has an economic interest of 92.5% in its projects. Sumatra’s assets include a mineral resource of some 2.15 million ounces of gold and 24 million ounces of silver reported to JORC Code standards, with further exploration targets identified.
Sumatra Copper & Gold appoints key consultants to complete PFS at Tembang mid-2011
Sumatra Copper & Gold plc (ASX: SUM) has signed agreements with four leading mining consultancies for the Pre-Feasibility Study (PFS) at its fully owned Tembang gold and silver project in Sumatra, Indonesia.
These appointments represent a significant step towards completion of the Definitive Feasibility Study (DFS) at the project. Sumatra intends to complete the PFS by mid-2011 to pave the way for the DFS to be carried out in the second half of 2011.
The company is transitioning from an explorer to an emerging producer, underpinned by a recent updated resource statement at the Tembang project of more than 1 million ounces of gold and 13 million ounces of silver.
The PFS will be prepared with the support of independent consultants in various operations including PT Runge Indonesia (PTRI) for mining, Lycopodium Minerals Pty Ltd for metallurgy and plant, Knight Piésold Pty Limited (KP) for geotechnical, civil engineering and water quality and PT MAL Sriwijaya (PTMS) for social and environment.
Jocelyn Waller, Sumatra’s managing director, said "we selected each consultant on the strength of their experience and technical strengths, plus their understanding of local culture, conditions and requirements for project development in Sumatra."
Sumatra Copper & Gold plans to have its $US80 million Tembang gold and silver project in production by 2013.
The Resource will support an initial 10-year mine life producing gold at an annual rate of some 60,000-70,000 ounces, at a net cash cost of about $US500 an ounce.
Given Tembang is a brownfields site, it brings a de-risking element to the project and development parameters.
Final mine planning will be undertaken once the infill drilling and definitive resource modelling is completed in mid 2011.
The current schedule is for the DFS to be completed by the end of 2011 and construction to begin, subject to permitting and financing, in the second quarter of 2012.
The valuation of Sumatra appears light as it is comparable to the AIM-listed Archipelago (LON: AR) and the ASX-listed Sihayo Gold (ASX: SIH).
Stockbroking firm DJ Carmichael recently reaffirmed a $0.91 a share price target for Sumatra shares.
An exploration joint venture at the Tandai project could also provide upside. Newcrest Mining (ASX: NCM), a 7% shareholder in Sumatra, can earn a 70% interest in Tandai over five years by spending $US12 million ($A11.35 million) on exploration. Drilling at the property starts at the end of May.
