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PERTH (miningweekly.com) – An updated definitive feasibility study (DFS) for ASX-listed Sumatra Copper & Gold’s flagship Tembang project, has increased forecast gold production.
The updated DFS forecast a total production of 168 794 oz of gold and about 1.8-million ounces of silver, with the processing rate unchanged at 400 000 t/y. The project was now expected to produce about 33 000 oz/y of gold and 345 000 oz/y of silver, at a cash operating cost of $470/oz.
A further $33.6-million in capital expenditure would be required to complete the construction of the project, with the total capital cost of Tembang now estimated at $71.3-million of which $19.5-million has been spent to date.
A 2012 DFS indicated that the project could produce about 146 000 oz of gold and more than 1.3-million ounces of silver through a 400 000 t/y throughput plant. The mine would have an expected mine life of five years.
In December last year, Sumatra halted the development work of the Tembang project, after costs increased from $68.1-million to $71.1-million. The company subsequently undertook further drilling to define additional resources.
The company also undertook a revision of the development plan and the underlying business case for the Tembang project, in response to the volatility in the gold market, and an updated DFS was delivered.
Sumatra was expected to restart construction by mid-2014, with first production targeted for mid-2015.
Sumatra MD Julian Ford said on Wednesday that the successful completion of the DFS was a major milestone for the company, paving the way for it to join the ranks of gold producers within the next year.
“We are now focused on completing the funding package of debt and equity to allow us to restart construction.”
He noted that the revised five-year mine plan for Tembang also provided low operating costs and a robust production profile, which was able to withstand significant fluctuations in the gold price.
“It is also important to note that the Tembang project provides a number of exciting organic growth opportunities beyond the five-year life defined by existing ore reserves. These include drill-indicated underground opportunities at several of the openpits and multiple exploration targets which we intend to pursue once production has started.”