ASX-listed Indonesia gold explorer, Sihayo Gold has generated encouraging early gold assays from a diamond drilling program at one of several brownfield prospects at its namesake project in North Sumatra. Notable intersections from nine drill holes completed at the Sihayo-2 prospect were 24.8 metres grading an average 1.09 grams per tonne gold from 52m including 6m going 2.46 g/t, and 8m at 1.32 g/t from 96m including 1m at 4.4 g/t.
The Brisbane-based company, which has 20 holes totalling 2,000m planned for Sihayo-2 in the current initial round of drilling, is looking to define economic satellite gold resources within trucking distance of its planned Sihayo mining and processing “starter project”.
The proposed development is currently based on the advanced Sihayo-1 and Sambung sedimentary rock-hosted disseminated gold deposits, which host latest stated proved and probable reserves totalling 12.5 million tonnes grading 2.1 g/t gold for 840,000 ounces of contained gold.
Combined measured, indicated and inferred mineral resources for the two deposits including the ore reserves are put at 24 million tonnes at an average 2 g/t for 1.5 million ounces of gold.
Prime exploration targets at this stage – Sihayo-1, Sambung, Hutabargot Julu, Sihayo-2 and Sihayo-3, 4 and 5 – occur within two subparallel mineralised trends identified by prior exploration work.
Sihayo-2 lies on the interpreted north-west extension 500m-1000m from the main Sihayo-1 gold deposit.
Management says the prospect features a strong concentration of jasperoid boulders and outcrops located along a narrow north-west-south-east oriented ridgeline.
Untested gold soil and coincident IP chargeability anomalies encountered in historic exploration work programs add to Sihayo-2’s prospectivity.
The need to drill with man-portable rigs in mountainous jungle means the current program at Sihayo-2 will take another two months to finish.
Elevations at the project site range from about 985m to 1,300m above sea level.
Sihayo Gold Executive Chairman, Colin Moorhead said: “This is the first of several near-mine targets that will be tested for additional gold resources on the company’s Sihayo-1 starter mine project.”
“Past exploration drilling by the company at Sihayo-2 originally highlighted the prospectivity of this target. It is therefore pleasing to see our early follow-up drilling results support the potential for additional low strip ratio gold mineralisation located close to the proposed Sihayo plant site.”
Sihayo Gold tabled a bumper definitive feasibility study on its proposed namesake mining and processing starter venture almost a year ago headlined by impressive projected EBITDA of US$744 million or an average US$93 million a year across an initial eight-year life of mine.
The DFS base-case envisages the mine producing 635,000 ounces of gold or an average of 79,375 ounces per annum.
All-in sustaining costs were predicted to come in at an attractive average of US$709 per ounce.
The pre-production capital cost was forecast at US$144 million with payback of initial development capital pegged at only 25 months.
Sihayo Gold has indicated previously it hopes to progress early capital works at the Sihayo project including building site access roads and bridges in the forested terrain of the Barisan Mountains, final permitting approvals and detailed mine and tailings storage design this year.
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By Matt Birney
