PERTH (miningweekly.com) – ASX-listed Sumatra Copper & Gold has placed its Tembang gold/silver operation, in Indonesia, on care and maintenance.
The company in May this year temporarily suspended openpit operations at the Tembang mine until the operation could be connected to the State-owned electricity grid later this year.
During the intervening period, Sumatra has operated solely on the production from the Belinau underground mine.
However, the company told shareholders on Monday that lower production grades and excessive waste mining in the lower portion of the underground mine have resulted in negative cash flow from operations, which the board has determined was not sustainable.
As a result, all operations at Tembang have now been suspended and the mine has been placed on care and maintenance in order to minimise losses, while a new mine plan, based on a lower sustainable cost base, can be prepared.
Discussions have also started with the company’s lenders and creditors to allow Sumatra to restructure its financial position to enable the mine to remain on care and maintenance.
The preparation of the new mine plan, and the financial restructure is expected to take at least two months to complete, and will also include the implementation of cost-saving initiatives and securing of additional funding.
In the meantime, Sumatra’s share trading remained suspended on the ASX.