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SIHAYO
Tangible near-term production and
MINING | SIHAYO GOLD
GOLD
d real exploration upside in Indonesia
ASX-listed explorer Sihayo Gold owns a 75% interest in Indonesian miner PT Sorikmas Mining, which provides it with access to the Sihayo-Pungkut 7th Generation Contract of Work (CoW) – a 66,000 hectares mining lease located in the Province of North Sumatra. Indonesia needs no further introduction to those working in the global mining industry, having secured its reputation as one of the leading jurisdictions for mineral extraction in Southeast Asia with several high-quality and high-profile mines developed in-country over several decades across a diverse range of commodities including: copper, gold, tin, bauxite and nickel. Sihayo’s executive chairman Colin Moorhead has played a key role in the development of four mines in Indonesia during his former stints with Australia’s Newcrest Mining and Indonesianlisted producer PT Merdeka Copper Gold Tbk. Possessing an unrivalled understanding of the lay of the land in Indonesia’s mining sector, there is no better person than Moorhead to propel Sihayo into near-term production at the Sihayo starter project before the end of 2023.
environment which is
Overcoming the pandemic
prospective for porphyry
The development of
copper-gold, for epithermal
Moorhead’s fifth mine in-
gold-silver and sediment-
country has been complicated
hosted gold deposits. We have a
by the emergence of a
modest starter open pit project
global pandemic, which has
identified, which is based on a
restricted travel between
resource of 24 million tonnes
Indonesia and Australia over
(Mt) at 2 g/t for 1.5 million
the past year-and-a-bit.
“[The project] is in a geological
ounces (Moz). All of that resource defined to date is of
However, he hails the crew on
the sediment-hosted variety,”
the ground at Sihayo, along
he notes.
with the local government’s COVID-19 containment strategy, which has kept the
MINING | SIHAYO GOLD
company’s local team safe
“In terms of permits, approvals it has all the aforementioned
and able to press on with the
and financing, I’ve been
ingredients in place for a
starter project throughout the
down this well-trodden path
successful long-term mining
ongoing health crisis.
before. I’ve found if you get the
operation, starting with the
formula right you really can
attractive Sihayo starter
During this challenging time,
do well in Indonesia. you need
project.
Moorhead has been able to
strong, trusted local partners,
draw on his vital experience
solid legal tenure for the leases
Starting strong
in mine-building in Indonesia
you’re on and you need the
Sihayo’s most advanced project
despite not being able to
capability on the ground to
is estimated to generate
travel to the project, located
execute.”
US$1.14 billion in gross sales
in a mountainous area
over an initial ~8 years mine
approximately three-and-a-
Following in the footsteps of
life at a flat rate gold price of
half hours South of the world-
previous major foreign mining
$1,800 per ounce, with cash
class Martabe Gold Mine.
investors – including Newcrest, operating costs of $632 per Newmont and Freeport
ounce and at a maximum
McMoRan – Sihayo believes
funding cost of $153 million.
S IH AYO G OLD AT A G L A N C E
STOCK TICKER: ASX:SIH MARKET CAPITALISATION: US$30.5 million (as of June 18, 2021) aj
The project is currently at the
global standard on tailings
permits and approvals stage
which we seek to comply with
with a view to commissioning
as best we can.
and first production in the second half of 2023. At the
“We’re designing a state-of-the-
time of writing, the company
art tailings storage facility and
is working through an AMDAL
Knight Piesold out of Perth is
(an environmental impact
helping us with that. They also
statement type-document),
look after Martabe’s tailing
which will be presented to the
storage facility up the road,
Indonesian Government for
so have very good experience
approval.
in that regard,” Moorhead declares.
“Probably the key now for Sihayo is getting the tailings
Another indispensable part of
storage facility signed off by
the process involves attaining
the Dam Safety Committee
a social licence to operate,
in Indonesia. There is a new
MINING | SIHAYO GOLD
amongst the other tenets of
legged stool. The community
the now universally accepted
and the government trust
environmental, social and
you to sustainably exploit the
governance (ESG) thematic.
resource and make sure the
In fact, Moorhead reveals
benefits are net positive for the
that ESG regulations relating
country and community.
to mine developments could be perceived to be just as
“The employees trust you with
rigorous in Indonesia as it is in
their livelihoods and their
Australia.
safety, and those providing
The three-legged stool “I’m very much of the school
debt and equity need a decent return on the risk they are taking. If you get that balance right, you can be successful. If
of thought that there’s only one one of those legs of the stool way to do mining and that is to
gets too long or too short,
do it properly. I liken it a three-
the thing falls over. My job is balancing that stool.”
“We have a small starter pit project identified, which is based on a resource of 24 million tonnes (Mt) at 2 g/t for 1.5 million ounces (Moz). All of that resource defined to date is of the sediment-hosted variety” Colin Moorhead, Sihayo Gold executive chairman
This balancing act is
the local people and natural
believing you. It’s a journey
something that Moorhead has
environment, while also
and we’re on that journey
previously undertaken with
highlighting the new economic
now.”
real pride at Tujuh Bukit in
opportunities available to
East Java and the Gosowong
locals through the gold project.
Three-tiered exploration
That experience in thorough
“It doesn’t matter whether
Sihayo’s journey in North
stakeholder engagement has
it’s Indonesia, West Africa or
Sumatra is underpinned by
shaped Sihayo’s approach to
Australia, you’ve got to treat
a three-tiered exploration
sustainable development in
people with respect if you want
approach: 1) near mine
North Sumatra.
it back,” Moorhead stresses.
exploration targeting
“That respect is hard won by
extensions and repetitions of
The company is working with
your actions, not what you say.
known sediment-hosted gold.
host communities to demystify
If you do what you say you’re
2) advanced exploration at
its aims and responsibilities to
going to do, people will start
the Hutabargot Julu prospect
Mine in North Halmahera.
MINING | SIHAYO GOLD
(located 6 km South of Sihayo
of more modest grade than the
responsive and able to do
as the crow flies). 3) target
expected low tonnage, higher
the task at hand,” he says.
generation work over the
grade resource at Sihorbo.
Other partners include
broader CoW using big data and other modern techniques.
Intertek (labs), Primero Drilling at Hutabargot is
Group (engineering and flow
expected to be completed
design) and AMC Consultants
While the company is working
before the end of Q3 and is
(mining).
diligently across all three
taking place concurrently
sections of the strategy,
with rigs at the Sihayo 2
“We’re now looking to get the
perhaps the most intense
target and starter pit, with the
starter pit into production, get
activity is currently taking
latter receiving engineering-
positive cashflow from that
place at Hutabargot, where a
type drilling along with
operation and use that to grow
diamond drilling campaign
geotechnical and hydrology
the company organically on
is primarily focused on two
work.
what is a really prospective
targets called Sihorbo and Penatapan.
All hands on deck
piece of ground in Indonesia.” Tangible near-term production
“We did a 25-hole scout drilling
This equates to a hive of
and exploration upside is
programme earlier in the year
activity on-site, with 50 people
the key formula for Sihayo’s
across a 10 km2 area. That
working diligently at present
long-term prospects in
generated five or six specific
in the camp, which is located
North Sumatra, along with
areas for follow up. The first
atop a steep hill. “At the
the continuity of its high-
two of those are Sihorbo,
moment, there are only two
quality local partnerships and
which is a high-grade single
ways to get up the hill; walk or
commitments to sustainable
vein target that we’re testing
take a helicopter. And we don’t
development in line with the
with 10 holes to see if we can
have a helicopter right now,”
stringent ESG requirements of
discover a bonanza shoot
Moorhead quips.
modern mining in Indonesia.
there.” Sihayo’s drilling partner is In the coming weeks, the rigs
renowned national outfit PT
will move to the Penatapan
Indodrill, a company which
(which translates to clear
Moorhead has a relationship
view) stockwork target, which
with going back decades. “As
would imply a larger deposit
usual, they’ve been excellent,
MINING | SIHAYO GOLD
Published by Anderson Murray Media Ltd
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