SIHAYO Gold is revising its plan for mining the first stage of Sihayo Pungkut Gold Project in North Sumatra after challenging market conditions prompted it to re-examine the project to identify an optimum project development path. The company has come up with a plan for mining the near-surface mineralization at Sihayo deposit as part of a two-pronged development approach.
The highlights for the initial six-year, stage one scenario include the mining of 4.6 million tonnes of ore at 2.4 grams/tonne gold to achieve a 750,000 tonne processing rate. This would result in 276,000 ounces of gold being recovered, while average processing recoveries would reach 78%.
Average site cash operating costs are $US634 per ounce while estimated construction capital costs are expected at US$55-$60 million. Sihayo estimated in March that overall capital costs for the stage one development would be about $72 million, with average cash costs of $615-$645/ounce. Initial expectations also included a nominal carbon-in-leach processing plant, which would have annually processed 11 million tonnes, produced 60,000 ounces.
Sihayo says the updated plan reflects improved outcomes from metallurgical test work that had been completed. It also reflects coarse grinding requirements and lower retention times than previously identified.
Sihayo’s chief executive Stuart Gula says, “We continue to refine the process plant operating parameters, mine design and schedule, and associated operating costs that will also be impacted by further results from pending metallurgical test work on stage one due for completion in November.”
He says implementing alternative power solutions such as a coal-fired power plant could potentially reduce processing costs, but would require additional capital expenditure. The full evaluation of alternatives would take several months to be refined.
The ounces produced from the operation could increase, with a further 700,000 ounces within the measured and indicated resource category being considered for extraction.
“Stage one is aimed at developing an operating scenario that quickly repays initial capital and provides an operating footprint to realize the value from known resources at depth, as well as from other exploration prospects such as Hutabargot,” Stuart Gula says.
Sihayo has reduced in-field exploration work, and prioritized permitting and approvals to advance the projects. In addition, management is working with the company’s major shareholders relating to funding requirements.