Sumatra Copper & Gold operated the Tembang Gold-Silver Project processing plant at an annual rate of 460,000 tonnes during January, which was 15% above nameplate capacity. As a result the company processed 39,065 tonnes of ore for 2025 ounces of gold and 54,374 ounces of silver during the month.

The company poured its first gold at Tembang, in southern Sumatra, Indonesia, on September 27, 2015, and has been progressively ramping up operations. It expects further metal production increases over the coming months as ramp-up of mining operations progresses and mine grade increases with depth.

In January 2016 a milestone was achieved with the successful completion of the first stope on Level 1 at Belinau. Ore development is continuing on Level 2 with benching in progress. Upon completion of benching, the ore exposed in the ore drive floor will be trenched to a width of 1.2 metre. This is expected to produce high grade ore with minimal dilution. 

Following the completion of trenching the narrow excavation will be filled with cemented rock fill to allow waste to be backfilled. This will facilitate the commencement of drilling and stoping of the high grade stope block between Level 1 and Level 2. This development strategy has been successful in achieving 100% ore recovery without any requirement for residual ore pillars for geotechnical support.

A further milestone has been achieved with the main decline becoming fully operational. The decline had encountered difficult ground conditions which resulted in a decision to incline towards the main decline from Level 2. Ventilation will be greatly improved along with the ability for the underground mine trucks to enter the mine and significantly improve haulage productivity.

Ground conditions have improved markedly and the main decline is on track to access Level 3 during this quarter. Level 3 will be the first level to access the full strike length of the Belinau main vein, providing development ore with drives of up to 250 metres in length. Level 3 will also provide access to the Bitu north vein and potentially the Bitu south vein.

During mining of the Belinau east cutback in January 2016 a new vein was discovered in the south wall of the Belinau pit. This is believed to be the southern extension of the Bitu vein that has previously been drilled on the northern side of the pit. Surface sampling of the exposed vein returned grades of up to 8.87 grams/tonne gold. Historically drilling would have been parallel to this structure.

To follow-up this intersection, and to determine the orientation, width, strike and depth extent of the new Bitu South vein structure, resource drilling is planned to commence in March. Any additional ounces added to the existing ore reserve may provide a significant potential uplift in profitability of the Belinau underground operation.

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