Tembang Project (100%)

Tembang is Sumatra’s flagship gold project and is on-track for production during 2013. Tembang has a proved and probable JORC Reserve of 5.5 million tonnes ore at 2.3 g/t gold and 31.4 g/t silver for a total of 513,000 ounces gold equivalent[1].

Further upside remains through an additional 73,000 ounces of gold and 890,000 ounces of silver of Peripheral Sheeted Vein (‘PSV’) Indicated Resources, which were excluded from the Ore Reserve.

Tembang is located in the Bengkulu district in central Sumatra and covers an area of around 850 km2.

Sumatra is advancing a two-stage production plan at Tembang. Stage 1 is a high-grade, low-cost operation, which constitutes around 18% of Tembang’s total resource. Stage 1 has an anticipated five year mine life with 400,000 tpa production rate. Stage 2 will be processed following the conclusion of Stage 1.

Situated on a brownfield site, Tembang was in production for four years until 2000, when the mine closed due to the low gold price of ~US$250/Oz, a fraction of today’s escalating gold price. It is a low risk project due to the many technical advantages created as a result of it previously being mined.

Tembang is a district with a collection of significant prospects.

Figure 1: Stage pits Belinau and Asmar (highlighted in red)

[1] Gold Equivalent reporting

Gold Equivalent = gold assay + (silver assay / 50) where the number 50 represents the ratio where 50 g/t Ag = 1 g/t Au. This ratio was calculated from the average of the 12 months of Financial Year 2011 from July 2010 to June 2011 taken from published World Bank Commodity Price Data and rounded up from 47 to 50. Click here for World Bank Link  The metal prices thus used in the calculation are the average gold price of US$1,500 per ounce and average silver price of US$30 per ounce. Metal recoveries assumptions are 90% for gold and 80% recovery for silver for Belinau.

Table 1:  Tembang Project April 2012 Ore Reserve Statement Summary

Deposit

Reserve
Category

Tonnes
(kt)

  Grade
Au (g/t)

Contained Gold
(oz)

Grade Ag
(g/t)

Contained Silver
(oz)
Asmar Proved
Probable		    650
1,230		 1.7
1.3		 35,000
49,000		 24.0
20.5		 498,000
808,000
Berenai Proved
Probable		    910
80		 2.0
2.1		 60,000
67,000		 40.8
23.6		 1,195,000
740,000
Buluh Proved
Probable		 560
400		 2.5
2.0		 45,000
26,000		 40.9
29.0		 735,000
374,000
Aidit Proved
Probable		 -
20		 -
3.1		 -
2,000		 -
44.6		 -
30,000
Bujang Proved
Probable		    140
50		 4.2
2.3		 19,000
4,000		 52.1
26.0		 238,000
40,000
Belinau Open Pit Proved
Probable		      90
60		 5.5
3.4		 16,000
6,000		 68.4
53.2		 196,000
97,000
Belinau Underground Proved
Probable		 50
360		 8.7
5.0		 15,000
59,000		 74.1
39.3		 130,000
458,000
Total Proved
Probable
Total		 2,400
3,090
5,490		 2.5
2.1
2.3		 190,000
213,000
403,000		 38.7
25.6
31.4		 2,991,000
2,547,000
5,539,000