Sumatra Copper & Gold achieved production guidance for 2016, with 30,509 gold equivalent ounces produced from its Tembang gold-silver operation in southern Sumatra, Indonesia. Guidance for 2017 remains unchanged at between 45,000 and 55,000 gold equivalent ounces.

Plant recoveries increased during the December quarter with gold and silver recoveries averaging 91.5% and 78.3% respectively, with the prior three quarters averaging 84.2% and 68.4% respectively.

Further to the announcement of December 5, 2016 regarding damage to an underground drill from an influx of water at the Belinau underground mine, the rig has been repaired and is expected to be operational by the end of January.

In addition, the company has procured a third jumbo drill rig which has arrived in Indonesia and is expected to be operational by mid-January.

The structure related to the perched water table has now been identified and is believed to be a shallow-dipping dilational zone within the ore body associated with abundant vugs and voids. Strategies have been developed in the mine plan to mitigate the risk of any further uncontrolled water ingress.

Decline development during December 2016 progressed to Level 8 with ore development now under way on Level 7. The additional drill rig will assist in further accelerating development such that stoping can recommence as early as possible in the March quarter of 2017.

Sumatra’s managing director David Fowler said, “Despite the considerable challenges experienced during 2016, meeting production guidance for our first full year of operations at Tembang was an excellent outcome.

“Our focus during the second half of the year was on bolstering the mining expertise on site and included the appointment of experienced mining engineers Rob Gregory, as chief operating officer, and more recently Andy Robb, as a non-executive director.

“The company is now well positioned to deliver a step-change in production during the March 2017 quarter once conventional stoping recommences in Belinau, replacing the current interim bench cut-and-fill ore drives.”