SUMATRA COPPER & GOLD PLC
Registered No. 5777015
QUARTERLY REPORT: JUNE 2016
Sumatra Copper & Gold plc
("the Company") ASX Code: SUM
Capital structure
At 28.7.2016
709,735,176 listed CDIs
1,217,006 unquoted shares
1,500,000 options
311,932,436 warrants
7,500,000 performance rights
7,000,000 convertible notes
Market capitalisation
At 28.7.2016
CDI price: A$0.041
Market capitalisation: A$29m
Cash & bullion, debt
At 30.06.2016
Cash and bullion: US$4.4m Loan facilities: US$46.7m Convertible notes: US$7m
Board of Directors Stephen Robinson Chairman
David Fowler
Managing Director Adi Sjoekri Executive Director Jocelyn Waller
Non-executive Director
Gavin Caudle
Non-executive Director
Registered Office
39 Parkside, Cambridge United Kingdom CB1 1PN
Level 1, 5 Ord Street West Perth WA 6005
T: +61 8 6298 6200
E: [email protected]
Highlights
The Company is pleased to present its June 2016 quarter activities report for the Tembang Gold-Silver Project, located in southern Sumatra, Indonesia ("Tembang").
Production
-
Gold production of 6,387 oz and silver production of 91,012 oz (total 7,602 AuEq oz).
-
All-in sustaining cost (AISC) of US$1,317/oz.
-
Gold recovery of 86.5% and silver recovery of 70.3%.
-
Finished product stocks of 2,586 oz of gold and 29,943 oz of silver at quarter end.
Sales
-
Gold sales of 4,951 oz and silver sales of 82,628 oz were lower than production for the quarter with a corresponding increase in finished metal inventory.
-
Gold and silver revenue of US$6.583 million and US$1.345 million respectively for total revenue of US$7.928 million.
-
Average realised sales price of gold of US$1,243/oz and silver of US$16.34/oz.
Safety
-
There were no Lost Time Injuries (LTIs) during the quarter.
-
A total of 3,904,305 manhours have been completed LTI-free since initial construction began at Tembang in July 2013.
Financial
-
Cash & cash equivalents at 30 June 2016 of US$0.939 million and bullion of US$3.46 million.
-
Full drawdown of US$7 million convertible note facility.
Exploration
-
Whole of project exploration review completed with 22 targets identified and reviewed in detail. This has led to the selection of eight Priority 1 Targets, five of which have been advanced during the reporting period.
-
New target defined at Belinau South West along strike of the existing Belinau underground mine.
Outlook
-
Updated production and cost guidance to be provided subsequent to revision of mine schedule in August 2016.
Note: all data above is for the quarter ended 30.06.2016
Summary
Table 1: Tembang Operations - Key Production Statistics
|
Tembang Operations
|
Unit
|
March Quarter 2016
|
June Quarter 2016
|
Year-to-date FY 2016
|
|
Underground mining
|
|
Ore mined
|
tonnes
|
13,578
|
22,800
|
36,378
|
|
Mined grade
|
g/t Au
|
4.62
|
4.60
|
4.61
|
|
g/t Ag
|
93.92
|
69.61
|
78.78
|
|
Contained metal
|
oz Au
|
2,017
|
3,376
|
5,393
|
|
oz Ag
|
41,000
|
51,139
|
92,139
|
|
Open pit mining
|
|
Ore mined
|
tonnes
|
96,177
|
84,429
|
180,606
|
|
Mined grade
|
g/t Au
|
1.31
|
1.28
|
1.29
|
|
g/t Ag
|
27.01
|
21.10
|
24.56
|
|
Contained metal
|
oz Au
|
4,051
|
3,478
|
7,529
|
|
oz Ag
|
85,519
|
57,408
|
142,927
|
|
Mill production
|
|
Ore milled
|
tonnes
|
103,323
|
106,777
|
210,100
|
|
Mill grade
|
g/t Au
|
1.81
|
2.15
|
1.98
|
|
g/t Ag
|
50.14
|
37.62
|
43.81
|
|
Contained metal
|
oz Au
|
6,024
|
7,383
|
13,407
|
|
oz Ag
|
166,489
|
129,439
|
295,928
|
|
Recovery
|
% Au
|
89.75
|
86.50
|
87.96
|
|
% Ag
|
73.02
|
70.34
|
71.84
|
|
Recovered gold
|
oz Au
|
5,406
|
6,387
|
11,793
|
|
Recovered silver
|
oz Ag
|
121,569
|
91,012
|
212,581
|
|
Gold & silver sales
|
|
Gold sold
|
oz Au
|
5,465
|
4,951
|
10,416
|
|
Silver sold
|
oz Ag
|
119,922
|
82,628
|
202,550
|
|
Inventory at end of quarter
|
|
Ore stocks
|
oz Au
|
74
|
96
|
96
|
|
oz Ag
|
2,735
|
1,514
|
1,514
|
|
Metal in circuit
|
oz Au
|
869
|
717
|
717
|
|
oz Ag
|
14,424
|
10,246
|
10,246
|
|
Finished product
|
oz Au
|
1,150
|
2,586
|
2,586
|
|
oz Ag
|
18,458
|
29,943
|
29,943
|
Quarterly Production Data
oz AuEq in ore mined
g/t AuEq in ore mined
oz AuEq in ore mined
g/t AuEq in ore mined
Figures 1 - 4: Key Quarterly Production Data
Fig 1. Underground mining
Fig 2. Open-pit mining
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
6,000
5,000
4,000
3,000
2,000
1,000
-
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Dec'15 Qtr Mar'16 Qtr Jun'16 Qtr
Dec'15 Qtr Mar'16 Qtr Jun'16 Qtr
Contained AuEq
Mined grade AuEq
Contained AuEq
Mined grade AuEq
oz AuEq in ore milled
10,000
8,000
6,000
4,000
2,000
-
Fig 3. Ore milled
3.0
2.5
2.0
1.5
1.0
0.5
0.0
oz Au & AuEq produced
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
Fig 4. Metal production
140,000
oz Ag produced
120,000
100,000
80,000
60,000
40,000
20,000
-
g/t AuEq in ore milled
Dec'15 Qtr Mar'16 Qtr Jun'16 Qtr
Dec'15 Qtr Mar'16
Qtr
Jun'16 Qtr
Contained AuEq Milled grade AuEq
AuEq prodn Au prodn Ag prodn
"AuEq" = Gold equivalent ounces, calculated as gold assay + (silver assay / 75) where 1g/t Au =75g/t Ag.
All-in Sustaining Cost (AISC)
Table 2: Tembang Operations - All-in Sustaining Cost (AISC)
|
Tembang
|
Unit
|
Jun Qtr 2016
|
Jun YTD 2016
|
Unit
|
Jun Qtr 2016
|
Jun YTD 2016
|
|
Mining costs
|
US$m
|
4.267
|
7.539
|
US$/oz
|
668
|
639
|
|
Processing costs
|
US$m
|
2.867
|
5.445
|
US$/oz
|
449
|
462
|
|
General & admin costs
|
US$m
|
1.170
|
2.622
|
US$/oz
|
183
|
222
|
|
Silver credits
|
US$m
|
(1.212)
|
(3.009)
|
US$/oz
|
(190)
|
(255)
|
|
Inventory movements
|
US$m
|
.067
|
(.030)
|
US$/oz
|
10
|
(3)
|
|
Cash costs
|
US$m
|
7.159
|
12.567
|
US$/oz
|
1,121
|
1,066
|
|
Royalties
|
US$m
|
0.369
|
0.610
|
US$/oz
|
58
|
52
|
|
Capital works (sustaining)
|
US$m
|
0.881
|
2.051
|
US$/oz
|
138
|
174
|
|
All-in Sustaining Cost
|
US$m
|
8.409
|
15.228
|
US$/oz
|
1,317
|
1,291
|
|
Production
|
Oz Au
|
6,387
|
11,793
|
Tembang Operations
Mr Rob Gregory was appointed to the position of Chief Operating Officer ("COO") effective 1 July 2016. Mr Gregory, an Australian mining engineer, is an experienced manager of mining operations in a number of jurisdictions including Indonesia, most recently as Chief Operating Officer at Medusa's Philippines operations where he was instrumental in increasing production levels and underground mining productivity. His focus will be to bolster productivity at Tembang particularly from the Belinau underground mine, the production from which is the main driver of grade to the mill.
Underground Mining
Development & Stoping
Production continues to improve at the Belinau underground mine with ore mined for the June quarter totalling 22,800 tonnes at an average grade of 4.6 g/t Au and 69.6 g/t Ag for total contained metal of 3,376 oz Au and 51,139 oz Ag. This improvement reflects an increase in the number of headings and an increase in the strike length of the orebody as development extends below the former open pit.
During the quarter the decline progressed from Level 3 to Level 4 with 166 meters of decline development completed. A total of 65 meters of vertical development was also completed for return air and escape ways between Levels 2 and 4. The longer term ventilation system was commissioned during the quarter with the main exhaust fan established in the Level 2 East portal. New water pumping capacity was added to manage water inflows. During the September quarter, the Company expects to complete a lined in-pit sump and establish systems to pump water directly from underground to the surface.
Level 2 and 3 ore was stoped during the quarter using long hole methods. Parallel, planar shears in the footwall resulted in excessive stope widths, causing significant unplanned dilution. The undiluted gold grade of ore mined to date has reconciled with the resource model along with a positive reconciliation for silver.
As a result of the excessive stope widths, the cemented rock fill sill pillars placed on Levels 2 and 3 were undercut and breached to surface. The void will now be backfilled with competent rock sourced from a waste dump close to this area and is not expected to have any impact on future mine development. The area was being monitored and the safety of the underground crew was not compromised at any time by the incident and no lost time injuries were recorded.
An interim ore extraction method by ore drives between Levels 4 and 5 will be implemented to attain a competent sill pillar through this zone above Level 5. This will provide long term access to the extremities of the orebody on Level 5, and allow the decline to advance so that a stoping method suitable to the geotechnical conditions in this area can resume.
The Level 5 ore drive is expected to be established quickly by early August as it only needs to descend to just below the sill pillar placed on Level 4 and not to the bottom of a long hole stope. The ore drive can then be benched along the floor under continuous ground support. The planned dilution will be controlled by resue mining, the separate blasting of the ore and waste. This continuous access to the ore drives in a top down manner will allow the decline to move ahead, so that stoping methods can commence that allow continuous backfilling of the void.
During June, a Mining Technical Services Superintendent was appointed. Subsequent to the end of the quarter, a second Senior Mining Engineer was added to the team to further strength in-house planning and technical capabilities.