SUMATRA COPPER & GOLD PLC - ASX: SUM

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Description

Sumatra Copper & Gold plc ('Sumatra' or 'the Company'), a company incorporated in England and Wales, was established in 2006 to explore for, and develop, gold-silver and copper-gold mineral deposits on the Indonesian island of Sumatra. The Company has an economic interest of 92.5% in its projects. Sumatra’s assets include a mineral resource of some 2.15 million ounces of gold and 24 million ounces of silver reported to JORC Code standards, with further exploration targets identified.

Tembang Project

Tembang is an abandoned mine with a recent exploration history dating back to the 1980s. The Company hold various rights to an area of about 800 km2 over and around the old mine-site, and these are host to known partially-explored epithermal gold-silver and copper-gold porphyry systems and reflect extensions of the historically important goldfields of Bengkulu. Tembang is a large low-sulphidation epithermal deposit comprising gold-silver bearing quartz sulphide veins hosted by Tertiary volcanics. Two vein styles are present a relatively wide and continuous vein set surrounded by irregular narrower veins that occur in both the footwall and hanging-wall providing a "halo" of mineralisation peripheral to the main veins. Tembang is the most advanced of the Company's Projects with Snowden Mining Industry Consultants completing a Pre-Feasibility Study (PFS) in early 2009. The PFS revealed that simple beneficiation of the halo mineralisation, representing approximately half the Tembang, is conceptually feasible and offers economies of scale from larger processing rates. Throughputs of up to 2.5 Mtpa were considered which forecast an average 120,000 ounces of gold would be produced annually for approximately eight years.

Lebong Project

The Lebong area hosts multiple examples of low-sulphidation epithermal gold-silver deposits, and represents a mining district which was a centre of sophisticated activity during the Dutch era but which was terminated by the outbreak of the Second World War. The Lebong Project, which includes two under-explored mines districts (Donok and Tembang Sawah), lies approximately sixty kilometres to the west of Tembang within a large Dutch mining district within the 2,500 km2 Bengkulu SIPP.

The Company has conducted work on two of the former underground gold-silver mines within the district, Donok which produced.1.34 million ounces of gold and 7.4 million ounces of silver at a grade of 12.8 g/t gold, 70.5 g/t silver and Tambang Sawah eight kilometres to the north. Sumatra's objective is to identify and develop resources potentially amenable to open-pit mining in the vicinity of the old mines.

The Dutch mined the deposit underground to a cut-off grade of approximately 7g/t gold. Mining was restricted to 300 metres of strike where grade was highest, which ceased in about 1939. At cessation, level plans show average grades of 7.6 g/t gold still being recovered from Levels 11 and 12. Several types of veining are present, but historical production was from a single wide structure in the hanging wall to the Donok intrusive. Mineralisation is thought to extend over 1.6 kilometres of strike and to locally continue to surface.

Tandai Project

Tandai, like Lebong, represents an under-explored historical mining district. During the colonial era, at least three Dutch companies were operating on adjacent lands. Tandai lies within the same 2,500 km2 SIPP as Lebong, and Sumatra have commenced the process of transitioning the tenement into a separate exploration licence (IUP) under the New Mining Law.

Tandai is a high-grade, epithermal, intermediate-sulphidation system with gold-silver mineralisation hosted by a series of veins distributed over a vertical extent exceeding 500 metres. The deepest levels of the mine were still in production when abandoned during the Japanese invasion of WWII. Historic Dutch production totalled 1.4 million ounces of gold and 15 million ounces of silver at a grade of 15.4 g/t gold, and 167 g/t silver. During WWII the Japanese focused on recovering copper from the district. The mine was reopened temporarily in 1986 and during 6 years of operations, a further 150,000 ounces of gold were produced.

Despite the long history of production a multi million ounce exploration target potential remains as work conducted by the Company demonstrates the Dutch to have exploited a modest portion of the large geologic system.

Sumatra's first objective is to identify open-pittable resources in the vicinity of the old underground mines. Current informal activity is at, or close to, the surface and indicates that these objectives are realistic. Dutch production records identify that approximately 1.0 million ounces of the high-grade gold-silver mined was recovered solely from the Tandai vein and this represents only 15% of the strike-length of veining identified by the Company.

Mine For

gold, silver, copper

Location of operation(s)

Indonesia

Address

Level 2, 66 Hunter Street
SYDNEY, NSW, Australia

Phone

+61 2 9300 3377

Email

Website

http://www.sumatracoppergold.com/

Last Updated

01/03/2010