Sumatra's Tembang gold project faces possible delay
PERTH (miningweekly.com) – Metals developer Sumatra Copper & Gold has flagged a possible delay to the start of its Tembang mine, in Indonesia, as it implements a revised mine plan.
Earlier this year, Sumatra initiated a series of optimisation studies to de-risk the Tembang project both in terms of the volatile gold price and project economics. The company took the decision to revise the mine strategy based on mining the Buloh and Asmar deposits during the Stage 1 development.
The company also decided to progress the Belinau deposit as an underground mine from the outset, rather than starting with an initial pit cutback.
The revised mine plan 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.
Sumatra said on Tuesday that the optimised mine plan and an updated mineral resource would be completed in the fourth quarter, allowing the finalisation and draw-down of the project funding package.
However, Sumatra pointed out that the timeline to production would likely be delayed by the later-than-expected draw-down of the debt funding. The final funding plan would only be confirmed once the updated mine plan had been finalised and reviewed.
As a cautionary measure, Sumatra has slowed project expenditure commitments until a final funding arrangement was in place.
In the meantime, significant progress had already been made with initial construction works on site, and detailed engineering was nearing completion. Long-lead items had also been placed on order, and road access to the site had been completed, while the 300-person accommodation camp was also nearing completion.
The project has a reserve estimate of 5.5-million tonnes, grading 2.3 g/t gold and 31.4 g/t silver for 513 000 oz of gold equivalent.
The Stage 1 operation would produce 400 000 t/y of ore and would have a mine life of around five years.
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