Aspiring Indonesia gold producer, Sihayo Gold, is set to kick off a 5,500m diamond drilling program at the exciting Hutabargot Julu prospect at its Sihayo gold project in Sumatra. The ASX-listed, Brisbane-based company is looking to start drilling next month once drill rigs have been flown in by helicopter and assembled in the mountainous jungle terrain.
The Hutabargot Julu target, an extensive and largely untested 3.5km by 3km soil geochemical gold anomaly that lies about 6km south-east of Sihayo Gold’s proposed Sihayo starter project site, is potentially prospective for a large-scale disseminated epithermal gold-silver mineralised system, according to Sihayo Gold.
Previous scout drilling on gold-silver veins in 2011-13 returned several significant gold-silver intercepts. Local artisanal miners have exploited epithermal gold-silver veins located on the western and southern edges of the prospect over the past seven years.
Sihayo Gold has done plenty of work in the lead-up to this point with all exploration forestry permitting approvals in place for the initial 22-hole diamond program at Hutabargot Julu. The first-pass program will consist of about 5,500m of drilling at depths of up to 250m. Construction of a camp to support the drilling activities and initial drill pads has also commenced.
Sihayo Gold Chairman, Colin Moorhead said: “We believe there is significant exploration potential in the Sihayo Contract of Work (tenements) package and the commencement of this drilling program represents the beginning of a new chapter in unlocking the potential of this province.”
Partway through a massive $40 million capital raise, the company is well funded for systematic and aggressive exploration activities at Hutabargot Julu, step-out drilling at the Sihayo project and further target identification work across its Contract of Work. It is also hoping to start building an access road for the proposed US$144 million Sihayo starter project development in October.
Sihayo Gold’s namesake starter project sits about 60km south-east of the revered Martabe mine, which has produced 1.9 million ounces of gold since 2012 and was acquired two years ago by Indonesian interests for US$1.2 billion. Martabe hosts estimated resources of 7.8Moz of gold and 64Moz of silver.
A definitive feasibility study on Sihayo that was completed in June showed total forecast gold production of 635,000 ounces over an initial eight-year life of mine. It also predicted an EBITDA figure of US$746 million – or US$93 million a year – from estimated gold sales of US$1.19 billion assuming a received price of US$1,890 an ounce for the same LOM period. All-in sustaining costs have been estimated at an impressive US$716 per ounce and development capital payback period at just 25 months.
Latest stated JORC-compliant ore reserves at Sihayo stand at 12 million tonnes going 2.1 grams per tonne gold for 840,000 ounces of contained gold within total mineral resources of 24Mt at 2.0 g/t for 1.5Moz of contained gold.
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By Matt Birney
