Aspiring gold producer in Indonesia, Sihayo Gold, has launched a 22-hole diamond drilling program totalling 5,500m at the exciting Hutabargot Julu prospect at its Sihayo gold project in North Sumatra. The ASX-listed, Brisbane-based company successfully flew in and set up the first drill rig in the mountainous terrain, with the second rig expected to be mobilised to site next week.
The drilling program is aimed at testing a large gold soil anomaly at Hutabargot Julu for potential bulk-tonnage epithermal disseminated gold mineralisation analogous to the venerated Martabe gold-silver mine located in the same mineral district.
Sihayo plans to run drill holes across the northern part of a whopping 3.5km x 3.0km soil geochemical anomaly that it says has been largely untested by drilling to date. According to the gold hopeful, the broad distribution of strongly anomalous gold results detected in soils from previous surveying at Hutabargot Julu suggests prospectivity for disseminated gold sources in the bedrock.
The company hopes the first-pass drilling program at Hutabargot Julu will throw up some tantalising gold hits that may point to geological similarities to the large Martabe gold-silver deposit, located about 86km north-west of Hutabargot Julu.
Martabe is owned and operated by PT Agincourt Resources, whose major shareholders bought the mine in August 2018 for US$1.2 billion. The latest published mineral resource estimate for Martabe – as of December last year – was 7.8 million ounces of gold and 64Moz of silver. It has produced almost 2Moz of gold since July 2012.
Sihayo’s developing namesake “starter” gold project, which incorporates and lies only 6km north-west of the Hutabargot Julu gold-silver prospect, and Martabe sit within the same prospective mineral belt of North Sumatra.
The company boasts an impressive tenements position spanning 66,200 hectares in the region that takes in a plethora of gold prospects along the Sihayo gold belt straddling the auriferous Trans Sumatran fault strands.
It recently completed a definitive feasibility study on the proposed US$144 million Sihayo development predicated on total gold production of 635,000 ounces over an initial eight-year mine life.
The DFS forecast EBITDA of US$746 million for a stand-alone Sihayo mining operation based on estimated gold sales of US$1.19 billion and a received gold price of US$1,890 an ounce across the eight years, with all-in sustaining costs coming in at a compelling US$716/oz.
Ore reserves at Sihayo currently stand at 12 million tonnes grading 2.1 grams per tonne gold for 840,000oz of contained gold within total mineral resources of 24Mt at 2.0 g/t for 1.5Moz of contained gold.
Gold buffs will be keeping a close eye on the diamond drill results from the intriguing exploration program at Hutabargot Julu between now and the December quarter when the program is scheduled to be completed.
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By Matt Birney
