SUMATRA COPPER & GOLD PLC - ASX: SUM

The data on Australian Shares.com is intended as a guide only and is compiled from information in the public domain. Data on this website should not be used to make an investment or trading decision.

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

The Tembang project is located approximately 120 kilometres north-northeast of Bengkulu in South Sumatra province. Tembang is a large intermediate-sulphidation epithermal deposit comprising gold-silver bearing quartz veins hosted by Tertiary volcanics. The property was previously mined from late 1997 until March 2000 when production ceased due to a declining gold price. The Company has rights to an IUP with an area of 100 km² over and around the old mine-site.

With the commissioning of a new and extensive drilling program the Company has decided to defer a resource update until all the data from this program is to hand and can be incorporated into the modelling. The Company now expects to be in a position to publish a revised resource statement in the second quarter of 2011. Preliminary indications suggest there will be an increase in the gold content in the vein resources and a significant enhancement of grade. This is consistent with our perception that the nature of Tembang is changing with the discovery through further drilling of higher grade zones at depth, particularly at Belinau. However a more rigorous review of the geological model based on the results of the surface geological mapping is likely to result in a material reduction of inferred halo resources.

A major drilling 10,000 metre program is currently in progress to further explore and define these higher grade shoots underneath what appears to be a lower grade cap. These holes hold the promise to multiply the resource potential of Tembang several times. The Belinau vein system in particular has continued to return significant intercepts of high grade classic epithermal banded quartz. The best intercepts have included 1.6 metres @ 81.92 g/t Au, 208.1 g/t Ag, 2 metres @ 41.16 g/t Au and 41.0 g/t Ag and 1.6 metres @ 20.95 g/t Au, 29.4 g/t Ag. These shoots are open to the south west and at depth. Recent IP surveys suggest the productive structure continues under cover in this direction.

Tandai Project

The Tandai project is located approximately 100 kilometres north of Bengkulu. This is currently a joint venture between Newcrest Mining and Sumatra Copper and Gold. Under the agreement, Newcrest can earn a 70% interest in PT BUG for expenditure of US$12 million over 5 years. Initially, Newcrest will commit a minimum of US$1.75 million (the ‘minimum spend’) over 18 months to earn the right to the equity earn-in. During the minimum spend period management will remain with Sumatra and, on completion of the minimum spend, Newcrest may elect to transition the management of PT BUG from Sumatra to Newcrest.

The highly prospective IUP totals an area of some 1,000 km² over a district in which at least three Dutch companies worked portions of the large Lebong Tandai system, a former underground mine that produced 1.4 million ounces of gold and 15 million ounces of silver at grades of 15.4 g/t Au and 167 g/t Ag. The old Dutch mining town at Tandai still remains, and was re-furbished by PT Lusang Mining Ltd (in a joint venture with CSR, then Billiton) when the mine was first redeveloped and then re-opened between 1985 and 1995.

Tandai is interpreted to represent an intermediate-sulphidation system with gold-silver mineralisation hosted by a series of veins and breccias distributed over a vertical extent exceeding 500m. The deepest levels of the mine were apparently still in ore when abandoned during the Japanese invasion of WWII. Despite the long history of production the remaining exploration target potential is significant, as exploration conducted by SCG demonstrates the Dutch to have exploited a modest portion of what is now known to be an unusually large system.

Three major east west trending mineralised lineaments are identified within the Tandai Area and the known strike extent approximates to >10km. These include the Toko Rotan, Lebong Tandai and Glumbuk structures. All three structures have varying grade and widths of mineralisation, with Tandai being the focus of previous mine development. A small amount of mining activity has taken place at Glumbuk, with Toko Rotan remaining undeveloped due to low surface gold grades.

Exploration conducted by SCG includes geological mapping, soil and drainage geochemistry, trenching, development of a 3D geological model in Datamine, ground magnetics and a modest programme of diamond drilling. The best perceived potential is for a high grade underground target with the possibility of an intact bulk mineable deposit given the right geological conditions. Dutch production records identify that approximately 1 Moz of the high-grade ore mined was recovered solely from the Tandai vein, and that this represents approximately a small portion 15% of the strike-length of known veining. There is undoubted potential along the Tandai lode for development of further high grade shoots.

Exploration has also confirmed the presence of substantial mineralised structures to the north (Toko Rotan) and south (Glumbuk) of the east-west corridor hosting the mined veins. These two structures were known to the Dutch and a limited amount of mining was conducted on Glumbuk at Karang Suluh. A modest amount of sampling has been conducted at the latter prospect area by SCG and encouraging gold values have already been identified in float up to 21 g/t. The corridor of veining in West Glumbuk is now much wider than previously thought and recent geochemical sampling indicates extensions into our own ground partly under cover. Glumbuk and other new veins are very important as in the absence of mining, undisturbed ore-shoots where higher-grades occur, are likely to be present.

Sontang Project and Northern Sumatra Tenements

The Sontang project lies within the Pasaman IUP in the province of West Sumatra, some 160 kilometres north of Padang. Sontang is held within an Exploration IUP, which is valid for six years, and comprises one of the first exploration licences to be granted under the New Minerals Law. The IUP was recently extended to cover the extension of the anomaly to the west. The Company now holds 29,724 Ha of highly prospective ground. The company also has two smaller greenfields but highly prospective IUP’s at Kotanopan and Mandailing with known hard rock and geochemical gold and base metal anomalies adjacent to Sihayo Gold’s Contract of Work.

Sontang comprises the virgin discovery of a high-grade polymetallic manto, made by the Company’s geologists in ground previously explored by other companies. The Company’s geologists followed up a float train discovered in drainage and located outcrops of massive base-metal sulphides. Hydrothermal alteration and mineralisation is dispersed over an area extending approximately 1.5 kilometres along strike.

The large hydrothermal system is related to intrusive activity, and the geological setting is particularly favourable as felsic and intermediate intrusives have been emplaced in a lithological package that hosts receptive calcareous beds including limestone and their metamorphosed equivalents. Mineralisation of economically significant grade has already been identified in several of these receptive units. To date, two distinct types of auriferous mineralisation have been found within this stratigraphy and these are high grade polymetallic manto bodies and replacement type silicified sediments ('jasperoid'). The latter type was mined previously in Indonesia by Newmont at the Mesel mine in Sulawesi and currently is being advanced towards feasibility by Sihayo Gold.

At East Sontang massive polymetallic sulphides occur as irregular bodies within limestone and the weighted average metal contents for 54.8 metres of rock channel samples collected in this area is 2.87 g/t Au, 118 g/t Ag, 0.57% Pb and 5.66% Zn. The best intercept returned 20.15 metres @ 2.59g/t Au, 56.9g/t Ag, 8.38% Zn and 0.16% Zn and these massive sulphides are interpreted to be an example of manto-style mineralisation comparable to those that occur commonly in Central and South America.

At Central Sontang both (gossanous) manto-type massive sulphide mineralisation has been located similar to East Sontang as well as jasperoidal silica. Sampling has returned up to 10 metres @ 0.14g/t Au, 765g/t Ag, 8.3% Pb and 1.78% Zn in the polymetallic mineralisation and 4 metres of 2.63g/t Au and 6.75g/t Ag from the jasperoid. The mineralisation lies on the edge of a NW-SE trending gold soil anomaly, which has been delineated at +25 ppb and +50 ppb Au contour levels. The anomaly is strongly associated with the limestone complex, and already extends over 1,000 metres by 200 metres.

At West Sontang a strong coherent copper-arsenic anomaly has been recognised on the margin of a high magnetic feature which may be intrusive in origin. Rock chip sampling has yielded results of up to 1.17 g/t Au, 1,230 g/t Ag, 10.3% Pb and 0.08% Zn from quartz veined subcrop within the area of anomalous soils. This mineralisation is associated with silica-clay alteration and there may be an intermediate to high-sulphidation affiliation particularly as copper and arsenic are broadly coincident. West Sontang is inferred to be a magmatic-hydrothermal upflow zone centered above a Miocene felsic intrusion, which could be associated with a porphyry Cu system at depths of > 500 m beneath the ridge top.

At North Sontang gossanous float and outcrop of polymetallic mantos have returned grades up to 14 g/t Au. Channel sampling of nearby outcrops have returned 7 metres @ 1.98 g/t Au, 9 g/t Ag, 0.11% Cu, and >1 % As and 0.98 g/t Au, 2.4 g/t Ag, 0.18% Cu and 0.4% As. Follow up grid soil sampling has revealed a large coherent gold-copper-soil soil anomaly hosted by limestone directly above these outcrops. These Au-Bi rich polymetallic mantos are inferred to be related to a separate fluid up flow zone than that which created mineralization at the other prospects.

A scout drilling program of 1200 metres is now in progress to test the depth and strike continuity of the polymetallic mantos at East and Central Sontang. Three further holes are planned in the potentially large intrusive related system at Sontang West. At the conclusion of this program scout holes are planned at the Sontang North target zone.

Mine For

gold, silver, copper, molybdenum

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

04/02/2011