ASX-listed gold explorer and aspiring developer in Indonesia, Sihayo Gold, has returned solid gold hits from the first hole of a significant diamond drilling campaign at one of a surfeit of targets at its Sihayo gold project in North Sumatra.
The Brisbane-based company kicked off the broad-spaced diamond program comprising 22 holes for an aggregate of 5,500m at the Hutabargot Julu epithermal gold-silver prospect last month.
Hutabargot Julu is located in the northern block of the Sihayo project area – referred to as the PT Sorikmas Mining Contract of Work – and about 6km south-east of the company’s proposed Sihayo “starter project” mine site.
Sihayo Gold has just received the assay results back from the first hole drilled to a depth of 249.8m. Notable intersections were 17m going 1.14 grams per tonne gold and 4.2 g/t silver from surface including 0.5m at 8.63 g/t gold and 2.8 g/t silver, and 17m at 1.21 g/t gold and 7.6 g/t silver from 180m including 1m at 7.64 g/t gold and 48.2 g/t silver.
The company says the diamond drill data and ongoing core logging show the presence of intense epithermal alteration and mineralised veining to a depth of at least 100m-150m with the potential for mineralised veins extending to greater depth.
Sihayo Gold Chairman, Colin Moorhead said: “Similarly encouraging intercepts received from earlier drilling done by the company in 2010-2013 on the western and southern edges of this large 3.5km by 3km prospect area, combined with this latest result, confirm the potential for a significant gold discovery at Hutabargot Julu.”
“We are in the early stages of our current drilling program. Our aim in this initial program is to quickly assess large areas of the prospect that have not been previously drill-tested and then to assess the results and focus on specific parts of the prospect with more targeted follow-up drilling to delineate potential for near-surface gold resources.”
The planned drilling at Hutabargot Julu is being carried out across the northern part of the 3.5km by 3km gold-soil geochemical anomaly that highlighted extensively altered and mineralised volcanic rocks and has been largely untested previously by drilling.
According to Sihayo, the handful of intercepts from diamond hole number one support the potential for near-surface, bulk-tonnage oxide gold deposits and more discrete higher-grade narrow gold vein zones within a large mineralised epithermal system.
Five holes totalling 1,115m have been completed so far, with two man-portable drilling rigs deployed due to the mountainous jungle terrain. The company says further assay results are expected next month and the balance of the 22-hole program is slated to be completed in January.
Sihayo has its sights set on Hutabargot Julu emulating the coveted Martabe gold-silver epithermal deposit, located approximately 85km north-west of the Sihayo project, or coughing up a similarly large gold resource. Martabe and the Sihayo project area lie within the same prospective mineral belt of North Sumatra.
Martabe is owned and operated by PT Agincourt Resources, whose major shareholders acquired the mine in August 2018 for US$1.2 billion. It has pumped out roughly 2 million ounces of gold since production began there more than eight years ago. As of December last year, the mineral resource estimate for Martabe stood at 7.8 million ounces of gold and 64 million ounces of silver.
Sihayo released a definitive feasibility study, or “DFS” on its proposed namesake starter project development in mid-2020. It was predicated on estimated total gold production of 635,000 ounces over an initial eight-year mine life.
Key financial metrics in the DFS included a pre-production CAPEX of US$144 million and EBITDA of US$744 million – or US$93 million a year – from projected gold revenue of US$1.19 billion, using a received gold price of US$1,890 per ounce. All-in sustaining costs were forecast at an enviable US$709 per ounce and development capital payback period at 25 months.
Ore reserves for the Sihayo deposit currently stand at 12 million tonnes at 2.1 g/t gold for 840,000 ounces of contained gold within an overall mineral resource estimate of 24 million tonnes at 2 g/t for 1.5 million ounces of contained gold.
Sihayo has indicated previously that it aims to progress early capital works at the Sihayo project in the coming year or so.
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By Matt Birney
