Damage was sustained to one of the underground jumbo drill rigs in a recent incident at Sumatra Copper & Gold’s Tembang Gold-Silver Project in South Sumatra, Indonesia. The company believes there will be little to no impact on production guidance.

At a change of shift on December 2 a large quantity of perched water was encountered following blasting of the Level 6 East ore drive. The main pumping system was able to cope with the brief water inflow, however water damage was sustained to the single boom jumbo drill rig stationed in the Level 6 bench cut and fill drive in the west.

Sumatra said that at no point were any personnel in danger. It is estimated that the jumbo will be out of service for up to six weeks.

In a statement Sumatra said there would be a short term impact on production from the interim bench cut and fill ore drives. However, this was not likely to have any effect on 2017 production guidance as the other two twin boom jumbo drill rigs would continue the advance of the main decline unimpeded allowing for the recommencement of stoping at the end of the first quarter of 2017, as planned.

The company is implementing contingency measures to mitigate against the short term loss of the jumbo, including the use of airleg drills and a local contract miner. Production from the open pits remains on schedule.

Previous production guidance for 2016 was 30,000-33,000 gold equivalent ounces and Sumatra now expects production to be approximately 30,000 ounces. Guidance for 2017 remains unchanged at between 45,000 and 55,000 gold equivalent ounces.

In an update on the Belinau underground mine at the Tembang project released in late November, the company said that a geological review of the ore body interpretations for the Belinau, Siamang and Berenai deposits was commenced in October. The review is focusing on determining the potential for resource extensions, incorporating the most recent mapping and grade control data from the current mining operations.

A recent review of the diamond drill core from the various drilling programs carried out between 2010 and 2015 determined that two of the deepest drill holes did not intersect the Belinau vein or host structure. Wireframing of the Belinau vein from drilling and underground mapping information indicates that these two holes stopped short of intersecting the vein by as little as 10 metres.

A program of resource definition drilling is being planned to drill the projected positions of the Belinau vein at 50 metre centres from a strike parallel drive on Level 11. The drilling will test for potential depth extensions below Level 11 over almost the entire strike length of the deposit as it is currently known.

There has also been a positive reconciliation between the Belinau resource block model to that mined from August to the end of October 2016, with an increase in tonnes (12%), gold grade (23%), silver grade (119%), and gold equivalent grade (35%), resulting in an increase in contained gold ounces by 37% and silver ounces by 145%.

These reconciliations only compared that part of the resource model that has been mined from Levels 5 and 6, and may not necessarily be reflective of the total resource model. The company is updating the Belinau underground resource model, using the increased geological knowledge and mining grade control data, as part of the annual update of mineral resources and ore reserves.

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