NORMAL open pit ore production has resumed at the Berenai open pit of Sumatra Copper & Gold’s Tembang Gold-Silver Project following the removal of additional unscheduled waste material from the pit. The thick mud proved difficult to remove, particularly during the wettest period of the year.

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The camp at Sumatra Copper & Gold’s Tembang project in South Sumatra.

The open pit surface as defined in the original feasibility study was found to be inaccurate and included portions of backfilled and rilled material, which had to be removed, thus delaying production.

The company reported at the end of May that this work was complete and normal production had resumed. There are 12,000 gold equivalent ounces scheduled to be mined below the current floor in Stage 2 down to RL 82.5m and 5600 ounces in Stage 3 down to RL 70m during the remainder of 2017.

The Belinau underground mine has been transitioning from interim bench cut and fill ore drives to shrinkage stoppage with underground ore production expected to be low during this period.

The combined impact of limited underground and open pit production placed significant pressure on working capital during April and May with resulting supply delays for key underground equipment and infrastructure. The required equipment has now been ordered, with stoping to commence in the near future.

Due to limited production, June quarter production is expected to be significantly lower than planned and full year guidance has been reduced to 40,000-50,000 gold equivalent ounces from 45,000-55,000 ounces.

The company has also borrowed a further US$2 million from major shareholders Provident Minerals and PT Saratoga Investama Sedaya to fund working capital.

During the March quarter, the company produced 5159 ounces of gold and 50,555 ounces of silver at an all-in sustaining cost of US$1527 per ounce. Gold recovery was 93.4% and silver recovery was 79.9%.

Sumatra Copper & Gold has also released its annual JORC-compliant mineral resource and ore reserve statement, which takes into account mining depletion during 2016 and exploration results.

At December 31, 2016 there were total measured, indicated and inferred resources of 6.102 million tonnes @ 2.0 g/t gold and 24 g/t silver for 387,000 ounces of gold and 4.614 million ounces of silver. Total proven and probable reserves were 1.647 million tonnes @ 2.5 g/t gold and 26.9 g/t silver for 132,000 gold ounces and 1.426 million silver ounces.

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