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Sumatra clears funding hurdle

21st February 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) - ASX-listed Sumatra Copper & Gold has received credit approval for $35-million in financing to fund the development of its Tembang gold project, in Indonesia.

The company told shareholders on Thursday that it had received the credit approval from Credit Suisse for $30-million in senior debt finance facilities, as well as $5-million of cost overrun funding.

The provision of the senior debt facilities was now subject to the completion of project finance documentation, as well as certain conditions precedent, including final approval of Sumatra’s forestry permit, and the completion of the equity component of the funding package.

MD Julian Ford said in a statement that the credit approval represented a major milestone in the company’s funding plans for the Tembang project, and was the first of several significant announcements that the company would make over the coming months, as Tembang moved into its development phase.

The funding would support the planned construction of the project, based on the Stage 1 definitive feasibility study, which would see Sumatra produce some 146 000 oz of gold and more than 1.3-million ounces of silver, at a capital cost of $68-million.

The Tembang project was expected to process some 400 000 t/y of ore, over a life-of-mine of five years, from a proven reserve of 2.4-million tons, grading 2.5 g/t gold and 38.7 g/t silver, for 200 000 oz of gold and three-million ounces of silver.

Stage 2 development would be funded from cash flow, and would increase throughput at Tembang to 900 000 t/y, and production from 30 000 oz/y of gold to 50 000 oz/y of gold, and extending the mine life by two-and-a-half years.

Edited by Creamer Media Reporter

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