Sumatra Copper & Gold says new high-grade gold and silver assays at its flagship Tembang Gold-Silver Project in South Sumatra point to the possible discovery of a new zone of mineralization.  1

Results of up to 13 grams/tonne gold at the site have been confirmed from two exploration holes which were completed in April 2013 to test a potential northerly vein intersection or flat lying splay of the main lode. Highlights include 13.3 metres @ 4.4 grams/tonne gold and 8.8 grams/tonne silver including 3.3 metres @ 13.4 grams/tonne gold and 21.2 grams/tonne silver from 72.2 metres.

Another hole intersected 2 metres @ 13.02 grams/tonne gold and 71.5 grams/tonne silver from 39.2 metres down hole in a peripheral hanging wall vein to the main Belinau vein. A hole in a peripheral footwall vein to the main Belinau vein intersected 2.4 metres @ 4.19 grams/tonne gold and 9.3 grams/tonne silver from 101.1 metres downhole.

Sumatra managing director Julian Ford says the results highlight the strong potential to increase the resource inventory at Tembang. “These results suggest we may have a new zone of mineralization which could not only supply additional ounces but would also be economically attractive given its close location to the planned decline at Belinau. The mineralization remains open at depth and along strike.

“We will undertake another round of drilling in this area in June to establish its full potential and then we can determine how or whether to accommodate it in the decline plan.”

The results are considered significant because any additional resources which stemmed from this zone would be easily and economically accessed via the planned Belinau underground decline development. Mining at Belinau is expected to start during the December 2013 quarter.

Tembang is on track for production during 2014 and has proven reserves of 2.4 million tonnes at 2.5 grams/tonne gold and 38.7 grams/tonne silver for a total of 200,000 ounces of gold and 3 million ounces of silver. The stage 1 production plan is a low-cost, high-grade operation targeting 400,000 tonnes annual process capacity to produce 30,000 ounces of gold and 200,000 ounces of silver.

Sumatra plans to fund the stage 2 upgrade from cash flow, increasing annual throughput to 900,000 tonnes and production to 50,000 ounces of gold, and silver 500,000 ounces of silver.

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