PERTH (miningweekly.com) – Gold developer Sumatra Copper & Gold has restarted construction work at its flagship Tembang gold/silver mine, in Indonesia, and expects to produce its first gold by November next year.
In December 2013, Sumatra halted the development work on the Tembang project after project costs increased from $68.1-million to $71.1-million. The company subsequently undertook further drilling to define additional resources.
An updated definitive feasibility study in April this year increased forecast gold production at the Tembang project to about 3 000 oz/y of gold and 345 000 oz/y of silver, at a cash operating cost of $470/oz, bringing total production to 168 794 oz of gold and about 1.8-million ounces of silver.
This was up from the 2012 estimated production of 146 000 oz of gold and more than 1.3-million ounces of silver.
Sumatra said on Tuesday that the company had started infill and grade drilling scheduled at the start of openpit mining, and mining was expected to start early in the second quarter of 2015.
Major components of the plant construction, including the grinding mill, would be shipped during December this year and would arrive on site during the first quarter of next year.
Sumatra said that the company was also tendering power supply and openpit mining contracts for award in the first quarter of next year, with project commissioning expected to start by the fourth quarter of 2015.
Since halting construction in December last year, Sumatra executed a $45-million funding facility for the Tembang project, as well as a hedging programme for 50% of the gold and silver production during the first two years of operation.