Sumatra halts Tembang development for further drilling, financing talks
PERTH (miningweekly.com) – The price tag of the proposed Tembang gold/silver project, in Indonesia, has increased from $68.1-million to $71.1-million, prompting developer Sumatra Copper & Gold to halt development while further drilling is under way and more funding is secured.
To date, about $15-million has been spent on preproduction activities, with the remaining estimated cost-to-complete set at $35-million.
Sumatra noted on Wednesday that at current forward-pricing and hedging assumptions, the debt capacity of the project would be between $18-million and $20-million. However, the life-of-mine demonstrated that the project could support a targeted $25-million of debt financing, with additional measured and indicated resources.
As such, the Sumatra board has decided to undertake a further three-month drilling programme with the objective of defining additional measured and indicated resource.
As a result, the construction activities at Tembang have been suspended while the drilling was completed.
The drilling was currently earmarked for completion by the first quarter of next year, and was expected to enable Sumatra to finalise financier negotiations to complete the debt funding package and resume construction.
Sumatra said on Wednesday that it had put in place an unsecured convertible note facility of $4-million to fund the company through the proposed drilling programme.
Earlier this year, Sumatra introduced a revised mine plan for the Tembang project, which was expected to substantially improve the cash flow over the first two years of the project life, and to lower cash costs, which should translate into improved project economics.
The plan would see production peak at 44 000 oz of gold and 365 000 oz of silver a year by year three of operations, with C1 cash costs estimated at $556/oz and all-in sustaining costs at $872/oz.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
Established on 1 March, 2000, by Barries Barnard, Advanced Fire Suppression Technologies (AFST) and the Advanced Group stands as Sub-Saharan...
VISIT SHOWROOM
As one of South Africa's leading manufacturers, Bell Equipment distributes and exports its wide range of heavy equipment globally to mining,...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
