REPORT ON ACTIVITIES FOR THE QUARTER ENDED 31 DECEMBER 2009

Transcription

1 29 January 2010 The Manager Companies ASX Limited 20 Bridge Street Sydney NSW 2000 (9 pages by ) Dear Madam REPORT ON ACTIVITIES FOR THE QUARTER ENDED 31 DECEMBER 2009 HIGHLIGHTS Official quotation of the Company's CDIs by the ASX. Issue of 6 Exploration IUPs to the Company and related parties following the end of the quarter. IUPs now cover more than 3,000 km². Continuation of exploration work at the Company's projects. Drilling commenced at the Tembang project. 1. CORPORATE ACTIVITIES 1.1 Commencement of Official Quotation by the ASX Following the completion of the Company s $12.0 million Initial Public Offering ('IPO'), which closed fully subscribed for 60 million CDIs at $0.20, each representing one fully paid ordinary share, official quotation of the Company's CDIs by the ASX commenced on 26 October Appointment of CFO and Joint Company Secretary With effect from 3 November 2009, the Company appointed of Mr Richard Edwards to the position of Chief Financial Officer ( CFO ) and Joint Company Secretary. Mr Edwards graduated with a Bachelor of Commerce degree from the University of New South Wales and is a member of CPA Australia and the Securities Institute of Australia. Following eight years as an owner/manager of his own business Mr Edwards has worked for the past seven years providing financial reporting and company secretarial services to a range of ASX listed companies with a mining focus. Ms Alison Barr, based in the United Kingdom, remains as Joint Company Secretary. 1.3 Sale of Oropa Limited Shareholding During the December quarter, the Company sold 8.3 million shares, which were held as a nonstrategic investment, in Oropa Limited (subsequently renamed Sihayo Gold Limited), realising approximately $660,000 which will be able to be spent on the Company's exploration programs. SUMATRA COPPER & GOLD plc ABN Level 2, 66 Hunter Street, Sydney NSW 2000 Australia P F E info@sumatra-copper-gold.com W

2 1.4 Indonesian Tenements Issue of 6 Exploration IUPs Since the end of the last quarter, 6 Exploration IUPs (Izin Usaha Pertambangan) have been granted to the Company (and related parties) making a total of 7 Exploration IUPs covering more than 3,000 km² which have been granted in accordance with the 'grandfathering provisions' of the new Indonesian Mining Law promulgated on 12 January The Exploration IUPs give the Company the right to complete its exploration programs and, subject to positive feasibility studies, are convertible into Production IUPs for an initial period of 20 years and extendable for a further 20 years (by way of two 10 year extension periods). The grant of the IUPs demonstrates that the new Indonesian Mining Law is functioning effectively and provides the Company with long term security of tenure. Musi Rawas IUPs (Tembang Project) Two IUPs have been granted by the Bupati (Regent) of Musi Rawas regency in the province of South Sumatra. One Musi Rawas IUP (22/KPS/DISTAMBEN/2009) which covers 9,979 hectares (99.8 km²), was issued to PT Dwinad Nusa Sejahtera (Dwinad), a company owned by Sumatra Copper & Gold s Indonesian partner, Adi Adriansyah Sjoekri, and in which under a Co-Operation Agreement Sumatra Copper & Gold has a 92.5% economic interest. This IUP, which has a validity of 4 years, covers the Company's Tembang project with reported JORC compliant resources of 1.6 million ounces gold and 19.8 million ounces silver as described in the Tembang Project Update announcement to the ASX on 20 November The second Musi Rawas IUP (21/KPTS/DISTAMBEN/2009) which covers an area of 75,000 hectares (750 km²), was issued to PT Musi Rawas Gold, a PMA company whose shareholders are Sumatra Copper & Gold (92.5%) and PT Nusa Palapa Minerals (7.5%), owned by Adi Adriansyah Sjoekri. This IUP has a validity of 8 years and abuts the Dwinad IUP's north, east and south boundaries. It includes known gold prospects at Lubuk Mas, Upper Minak and Landai, a skarn at Tuboh and a porphyry showing at Manggus. Musi Rawas and Jambi IUPs Location Map 2

3 Jambi IUP (Jambi Prospect) Issued by the Governor of Jambi province, the Jambi province IUP (495/Kep-Gub/ESDM/2009) which covers 97,480 hectares (975 km²), was issued to PT Jambi Gold, another PMA company owned 92.5% by Sumatra Copper & Gold and 7.5% by PT Nusa Palapa Minerals. The Jambi IUP, which has a validity of 7 years, covers the Company's Jambi prospect, a greenfields prospect containing a number of areas that are geochemically anomalous. Bengkulu Utara IUP (Lebong Tandai Project) One IUP (384 Tahun 2009) has been issued to PT Bengkulu Utara Gold by the Regent of Bengkulu Utara regency in the province of Bengkulu, Sumatra. It covers an area of approximately 99,980 hectares (1,000 km²) and is valid for 4 years extendable as an exploration IUP for a further 2 years and then convertible into a mining IUP initially valid for 20 years. PT Bengkulu Utara is a PMA company owned 92.5% by Sumatra Copper & Gold and 7.5% by PT Nusa Palapa Minerals, a company owned by Sumatra Copper & Gold s Indonesian partner, Mr Adi Sjoekri, and his family. The principal prospect in this IUP is Lebong Tandai, a former Dutch underground mine that produced 1.4 million ounces of gold and 15 million ounces of silver. Mandailing Natal IUPs Location of the Bengkulu Utara IUP Two IUPs have been issued by the Regent of Mandailing Natal in the province of North Sumatra, Sumatra. One IUP (540/034/K/2010), issued to PT Kotanopan Mining, covers 4,997 hectares (50 km²) and the other (540/033/K/2010), issued to PT Mandailing Mining, covers 4,719 hectares (47 km²). Both are valid for 5 years and can be extended for a further 3 years. Both companies are owned by Sumatra Copper & Gold s Indonesian partner, Mr Adi Sjoekri and his family, however, through a Cooperation Agreement Sumatra Copper & Gold s economic interest in both tenements is 92.5%. 3

4 Location of the Mandailing Natal IUPs The Company's other IUP covers 24,850 hectares (249 km²) in the regency of Pasaman in the province of West Sumatra and was issued to PT Nusa Palapa Minerals on 15 May It covers the polymetallic discovery at Sontang. With the issue of these IUPs, and the Company's other IUP (118.45/1178/BUP-PAS2006) issued to PT Nusa Palapa Minerals on 15 May 2009 covering 24,850 hectares (249 km²) in the regency of Pasaman in the province of West Sumatra over the Sontang Project, the Company now has all of the ground, prospects and targets we held under the old mining regime, bar one, successfully converted into secure title under the new Minerals Act. This demonstrates that the new Indonesian Mining Law is functioning effectively, provides the Company with long term security of tenure and allays any concerns over title to these tenements. 2. OPERATIONS 2.1 Tembang The Tembang project is located approximately 120 kilometres north-northeast of Bengkulu in South Sumatra province. Tembang is a large low-sulphidation epithermal deposit comprising goldsilver bearing quartz veins hosted by Tertiary volcanics. The property was previously mined from late 1997 until March 2000 when production ceased due to a declining gold price. The Company has rights to two IUPs totalling an area of some 850 km² over and around the old mine-site. Work this quarter has concentrated on building three dimensional computer models of the deposit s geology, alteration and mineralisation zones as well as with preparations for a new program of resource drilling. 4

5 Modelling The field mapping undertaken through the year, together with data from the Company's drill cores, and a re-evaluation of historical data sources, has been used to build a revised geological interpretation for the Tembang project. The new understanding suggests a gently folded structure to account for the repetition of lithological units, rather than the block faulted historical interpretation. Mineralisation is associated with a fracture system exploited previously by andesitic dykes and hydrothermal breccias prior to the emplacement of gold and silver bearing quartz veins. Better gold grades are often associated with the intersections of the more northerly with north-easterly trending veins and in areas where veins display slight jogs in direction. The veins often follow the contact of the andesite dykes where again changes in orientation and dip can lead to enhancements of grade. Tembang 3D Geological and Alteration Modelling In addition to the lithological and structural model a three dimension model of alteration has also been completed. This gives further insights into the centres for mineralisation. Work is now in progress to complete a model for the halo mineralisation, the swarm of narrow veining, often high grade, that is found in both the hangingwall and footwall to the principal veins. The new model for halo mineralisation, together with an ongoing field mapping project to measure the orientations of the mineralised halo veins, will be used to inform a new resource estimate planned for the second quarter of

6 Drilling A drilling contract for 5,000 metres of diamond and reverse circulation ('RC') drilling has been entered into with PT. Parts Sentra Indomadiri ('PSI') for drilling at the Tembang project. The multipurpose rig was shipped from Malaysia with a separate container of equipment from Balikapapan and all equipment has arrived on site and, since the end of the quarter, drilling has commenced. The objective of this initial 5,000 metre program is to test the down dip potential of the higher grade veins at Bujang, Belinau and Buluh in an incremental, informed and systematic manner. The primary target of each hole is the main vein zone; secondary targets are zones of halo mineralisation in the hanging and footwall. A total of 25 drillholes are planned, with deeper holes using the drill rig s RC capability to pre-collar. This will help to reduce costs and speed up drilling. First results are expected at the beginning of February Drilling should be completed by the end of April Sontang Tembang Project Surface Geology and Drilling Plan The Sontang project lies within the Pasaman IUP in the province of West Sumatra, some 160 kilometres north of Padang. Sontang comprises the virgin discovery of a high-grade polymetallic manto, made by the Company s geologists in ground previously explored by other companies. The Company s geologists followed up a float train discovered in drainage and located outcrops of massive base-metal sulphides. The December quarter saw the completion of the reconnaissance exploration program of regional stream sediment sampling over the whole Sontang IUP to an approximate density of 1 sample per 2.5km 2. In total this program saw the collection of some 124 stream sediment samples. Results from the reconnaissance program have succeeded in outlining the extents of the anomalous drainages. 6

7 The program of infill and follow up stream sediment sampling at Sontang, ridge and spur, and gridded soil sampling were put on hold awaiting a forestry permit for the work. Drainage Anomalies at Sontang Sontang East Lithology, Magnetics and Au soils 7

8 Time was taken to review the whole geology of the Sontang East area and a revised interpretation defines a new porphyritic andesite sill, intruded into the meta-sediments, which is now considered the source of the new magnetic anomaly previously reported. The review suggests the gold soil anomaly is again associated with limestone. Follow up grid soil geochemistry will be undertaken in the next Sontang field session starting in mid-february To maximise effort, a Task Force team approach has now been adopted for field work, with leave rosters for exploration staff synchronised. This was first implemented when the Sontang team moved to Tandai in mid November while the forestry permit for Sontang was being processed. The Forestry permit for the Pasaman IUP that contains the Sontang prospect was granted at the end of November Tandai The Tandai project is located within the northern part of the Bengkulu Utara IUP, in the Kabupaten of Bengkulu Utara, approximately 100 kilometres north of Bengkulu. Tandai has a long history of formal mining from the early part of the 20th Century until post World War II. The Company s tenements control a district in which at least three Dutch companies worked portions of the system. The old Dutch mining town at Tandai still remains, and was re-furbished by PT Lusang Mining Ltd (in a joint venture with CSR, then Billiton) when the mine was redeveloped and worked between 1985 and Work at Tandai resumed in November and concentrated on two areas. Firstly, exploration of the 3 kilometre long Glumbuk structure, in particular tracing it westwards where it is buried with little surface expression, though topography and alteration would suggest its presence. Tandai veins showing location of Glumbuk to the south Secondly, a program of follow up hand augering over the Siman-Pinang grid soil anomaly. The intent of the program is to determine if the extensive soil anomaly is indeed associated with underlying bedrock mineralisation or the result of colluvial or contamination by old mine spoils. Work to date has revealed a normal soil profile with no evidence of either mining spoil or colluvial. Results of the first phase of auger holes should be available early in

9 Plan showing location of Siman-Pinang soil anomaly 2.4 Other Tenements During the quarter exploration work was confined to the Tembang, Sontang and Tandai projects as described above. 3. OTHER The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by David Stock, geologist, who is a Member of the Australasian Institute of Mining and Metallurgy. David Stock is a consultant to the Company who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. David Stock has consented to the inclusion in this report of the matters based on his information in the form and context in which they appear. For further information, please contact Warwick Morris, Peter Nightingale or Richard Edwards on (61 2) Yours sincerely Warwick G. Morris Chairman pjn5218 9