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June quarter sees Sihayo Gold (ASX:SIH) make significant drilling progress at namesake project

Summary

  • Sihayo has embarked on a drilling campaign at its flagship Sihayo Gold Project in Indonesia.
  • The Company is drill testing targets at two prospects –Hutabargot Julu and Sihayo-2.
  • SIH is advancing the development works at Sihayo Starter Project, including permits and financing.
  • At the end of the June quarter, SIH had AU$8.7 million in cash.

Indonesia-focused gold explorer Sihayo Gold Limited (ASX:SIH) has reported strong operational performance during the June 2021 quarter. Shares of SIH surged 11% to AU$0.010 after the company released the update on the ASX.

 Read more: Sihayo Gold (ASX:SIH) in high spirits after encouraging gold intercepts from ongoing drilling campaign

The Sihayo Gold Project is located in the prolific Trans Sumatra Fault Zone (TSFZ), which hosts several gold deposits with significant reserves and resources. The tenement package, also known as Sihayo Pungkut 7th generation Contract of Work (CoW), is spread across 66,200 ha. The Company has identified several prospects on the tenement area and is advancing on the exploration front to unlock the potential of CoW.

Sihayo formulated a 3-tiered exploration strategy to explore and develop the project. The key parts of the strategy include:

Good read: Sihayo Gold’s (ASX:SIH) exploration gaining momentum amid rising gold prices

Ongoing drilling campaign

Sihayo has mobilised drill rigs to the Hutabargot Julu prospect and the Sihayo-2 prospect. On the Hutabargot Julu prospect, active artisanal mining activities and the results of the recently completed reconnaissance drilling program, including an intercept of 9m @ 8.36g/t Au & 9.3g/t Au from 8m in hole HUTDD074, helped in identifying the Penatapan target.

Setting drill rig on Penatapan prospect (Image source: Company update, 5 July 2021)

A total of 10 holes have been planned at Penatapan to test the vein system. Sihayo estimates that the drilling of these 10 holes with a combined depth of 2,500m will take around 2-3 months.

Sihorbo Vein Target –drill hole locations (Image source: Company update, 29 July 2021)

Drilling at Sihayo-2

SIH has been concentrating its efforts on increasing the mineral resources of the Sihayo Starter Project. The project boasts a mineral resource of 1.5Moz of gold. SIH, in line with its objective to increase the resource/reserve within the trucking distance of the Sihayo Mill, has launched an extensive drilling campaign at Sihayo-2.

Good read: Sihayo Gold (ASX:SIH) ramps up exploration, reports encouraging early gold intercepts

Sihayo-2 location map with drill hole locations (ASX: Company update, 29 July 2021)

SIH has planned 30 holes at the prospect targeting a near-mine jasperoid target. Twenty holes have already been drilled, as per the Company’s update on 13 July 2021. The mineralization has been intersected in a number of drill holes. The gold intercepts indicate a potential for additional low strip ratio gold mineralisation and favourable metallurgical recoveries in the close vicinity of the Sihayo Mill.

Assay results:

Data source: Company update, 13 July 2021

Also read: Sihayo Gold (ASX:SIH) shares zoom 8% in 3 days on encouraging gold intercept result

The first hole in the ongoing campaign was commenced in mid-March 2021. As per the last update, out of 20 holes drilled, a total of 12 holes have been assayed so far.

Sihayo Starter Project – Early works

The Sihayo Starter Project has progressed to the advance stage of development, and the Company is working on several project aspects simultaneously. SIH recently secured the technical and economic approval of the Government of Indonesia Feasibility Study. The Company is currently progressing the AMDAL (Environmental) permit and Tailings Storage Facility permit.

Preliminary works, including the construction of an access road to the mine gate and other related infrastructure, are in progress.  Full project construction will commence pending the receipt of necessary permits and financing.

Besides the drilling program at the Sihayo-2 and Penatapan prospects, SIH is also conducting geotechnical and hydrogeological drilling at the Sihayo Starter Project. These operations will support the optimisation and design work for the Sihayo Starter Project.

Greenfield discovery program

SIH had appointed Intrepid Geophysics P/L to cover the reprocessing, imaging, modelling and interpretation of the airborne magnetic and radiometrics data acquired over the CoW back in 2011. The geophysical interpretation work helped in generating new targets on the project.

The first stage of the interpretation work was completed in 2020 and returned high-quality imagery. The second stage of work will involve the integration of processed geophysics products with regional and prospect-scale geology, structure, drill hole and surface geochemical datasets. An implicit 3D modelling will be conducted using the GeoModeller, which is the proprietary software of Intrepid Geophysics.

Image processed by Intrepid of the CoW (Image source: Company update, 29 July 2021)

The second stage is expected to generate new exploration targets in the CoW area, results of which will be made available in the September 2021 quarter.

Cash & Finance position

At the end of the June quarter, SIH reported a cash balance of AU$8.7 million. SIH is a zero-debt company and has enough funds to carry on its current exploration works.

With the Sihayo Starter Project being in the development phase, the Company is assessing various financing options to ramp up the development works.

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