The Sihayo project now contains a total resource of 24.8 million tonnes grading two grams per tonne gold for 1.57 million ounces, a 10% increase in the gold endowment since last year's resource estimate.
That includes 677,000oz grading 4.7gpt in higher grade ore, based on a 3gpt cut-off, a 22% increase over the 2022 resource, while the deeper drilling has delivered a 67% boost in the yellow metal below the proposed pit at 304,000oz, further enhancing underground mining potential at the southern end of the pit limits.
The additional below-pit resource is primary sulphide-refractory gold mineralisation.
Executive chair Colin Moorhead said the starter project remains sensitive to the addition of incremental ounces, and increasingly supported the potential for an underground operation as part of its early development plans.
Sihayo's modelling suggests the high-grade gold mineralisation extends for at least 200m below the base of the planned starter pit, is open to the southeast, and potentially to the northwest. With additional drilling, it is confident of adding ounces.
With the updated resource in hand, Sihayo will now undertake an underground concept study.
Earlier this year it released an economic study for the starter project examining the use of caustic leaching, which it identified as being a way of unlocking the deeper, high-grade mineralisation, improving overall recoveries substantially over the life of the project's earlier plan to use a CIL plant.
The project would increase recoveries from 551,000oz to 653,000oz at a slightly higher all-in sustaining cost of US$1007/oz, allowing for post-tax cashflow of $277 million over the 6.5-year life of the starter project.
Capital costs were estimated at $221 million, which would take about 3.75 years to pay back with a 20% internal rate of return.
The company ended the March quarter with just A$1.1 million cash, and debts to its major shareholder Singapore-based Provident Minerals worth US$5.5 million.
In May, underwrote a A$12 million entitlement offer at 0.2c per share, mainly to repay its loans.
Provident now owns 31.1% of Sihayo, alongside new substantial holder Santoso Kartono at 14.9%.
Provident allies Eastern Field Developments (6.2%) and Saratoga Investama (5.6%) are also significant holders.
Sihayo's shares have traded at 0.1-0.3c over the past year and at 0.2c, the company was valued at $24.4 million.
Image source: Sihayo
