Positive DFS confirms viability of Tembang project

By Romel S. Gurky

Australia-listed firm Sumatra Copper & Gold plc said it has completed the definitive feasibility study (DFS) for stage I of its fully-owned gold and silver Tembang project, in South Sumatra, confirming the project is robust and profitable.

The Tembang project is owned 100 percent owned by by PT Dwinad Nusa Sejahtera, a fully-owned subsidiary of Sumatra.

The DFS was based on US$1,500/ounce gold and US$30/ounce silver price. Plant design was based on a nominal 400,000 tons per annum throughput utilizing a single stage crushing circuit and a single SAG mill followed by gravity and carbon in leach circuits.

Sumatra Managing Director Julian Ford said the successful DFS was a major landmark and demonstrated the strength of the project?s fundamentals. ?The DFS has confirmed stage 1 of Tembang as a robust, low cost project,? he said in a statement obtained by Petromindo.com Friday.

?Tembang is being progressed over two stages, with stage 1 developed as a small-scale, high-grade project to reduce risk and upfront capital costs. Resultant cash flow will be used to fund stage 2 development which ,will mine and treat the remaining open-pit reserve (containing 60% of the total) with minimal incremental capital.

?We remain on-track to commence production of stage 1 on time and will also be bringing the expected start date of stage 2 mining forward by 3 years to 2015. We expect to publish stage 2 DFS results in September 2012.

Editing by Reiner Simanjuntak