Sumatra Copper & Gold has released a new reserve estimate for its Tembang gold-silver project in southern Sumatra, Indonesia.
The ASX-listed company (ASX:SUM) says it has converted 73% of its measured and indicated resources to reserves, giving the project a total of 513,000 JORC-compliant gold ounces.
The ore reserve containing five deposits comprises 5.5 million tonnes of ore graded 2.3 g/t gold and 31.4 g/t silver. The majority of the reserves, 5.1Mt, are open-pittable; 0.4Mt is contained underground. Sumatra says the project also has 73,000 ounces of gold and 890,000 ounces of silver in peripheral sheeted vein (PSV) indicated resources which are not included in today's estimate.
"Although we have taken a conservative approach, it is pleasing that we have further upside from the PSV mineralisation and from exploration upside," said Julian Ford, Sumatra's managing director. "The conversion to reserve of 73% of the vein mineral resource demonstrates the robustness of the Tembang project and the relative high grade of the reserve at a 2.9 g/t gold equivalent is very encouraging - confirming our expectation for relatively low cash production costs from this brownfield development."
The past-producing mine operated between 1997 and 2000 but shut down due to low gold prices. It produced 0.23M oz of gold. The Tembang vein system was discovered in 1986 by PT Rio Tinto. Pre-feasibility work was performed in 1992, followed by additional drilling in 1995 by Laverton, Sumatra states on its website.
The company says it plans to begin production next year after permitting and the release of a Definite Feasibility Study.