SUMATRA COPPER & GOLD PLC

Registered No. 5777015

QUARTERLY REPORT: DECEMBER 2016

Sumatra Copper & Gold plc

("the Company") ASX Code: SUM

Capital structure‌

At 19.1.2017

709,735,176 listed CDIs‌

1,217,006 unquoted shares

1,500,000 options

311,932,436 warrants

7,000,000 convertible notes

Market capitalisation

At 19.1.2017

CDI price: A$0.025

Market capitalisation: A$17.7m

Cash & bullion, debt‌

At 30.12.2016

Cash and bullion: US$4.4m Loan facilities: US$49.6m

Working capital facility: US$5.1m Convertible notes: US$7m

Board of Directors‌

Chairman

Stephen Robinson Managing Director David Fowler Executive Director Adi Sjoekri‌‌‌

Non-Executive Directors

Jocelyn Waller Gavin Caudle Andy Robb

Registered Office‌‌

39 Parkside, Cambridge United Kingdom CB1 1PN

Level 1, 5 Ord Street West Perth WA 6005

T: +61 8 6298 6200

E: info@scgplc.com

Highlights

The Company is pleased to present its December 2016 quarterly activities report for the Tembang Gold-Silver Project, located in southern Sumatra, Indonesia ("Tembang").

Production
  • Full year 2016 guidance met with 30,509 oz AuEq* produced.

  • Record gold production for the quarter of 7,307 oz and silver production of 100,482 oz (total of 8,685 AuEq oz).

  • All-in sustaining cost (AISC) of US$1,162/oz.

  • Gold recovery of 91.5% and silver recovery of 78.3%.

  • Finished product stocks of 1,501 oz gold and 27,297 oz silver at quarter end.

  • Positive Belinau underground reconciliation of mined ounces versus resource model.

    Sales
  • Gold sales of 7,394 oz and silver sales of 100,150 oz.

  • Gold and silver revenue of US$8.998 million and US$1.674 million respectively for total revenue of US$10.672 million.

  • Average realised sales price for gold of US$1,217/oz and silver of US$16.71/oz.

    Safety
  • No Lost Time Injuries (LTIs) during the quarter.

  • Total of 4,825,809 manhours completed LTI-free since initial construction began at Tembang in July 2013.

    Financial
  • Cash & cash equivalents at 30 December 2016 of US$2.5 million and bullion of US$1.88 million.

  • Agreement executed with lenders to amend the US$45 million senior secured debt facility & warrants. Major shareholders to convert US$7 million of convertible notes.

    Exploration
  • Near mine exploration activities remained focussed on advancing priority targets in the Tembang Exploration Target Pipeline towards drill testing.

  • Total of 538m of trenching and collection of 127 soil samples.

    Outlook
  • Guidance for 2017 unchanged at 45,000 - 55,000 oz AuEq.

Note: all data above is for the quarter ended 31.12.2016 unless stated.

* AuEq = Gold Equivalent Ounces, calculated as oz Au + oz Ag / 75

Summary

Table 1: Tembang Operations - Key Production Statistics

Tembang Operations

Unit

March Quarter 2016

June Quarter 2016

September Quarter 2016

December Quarter 2016

Full Year 2016

Underground mining

Ore mined

tonnes

13,578

22,800

17,896

19,743

74,017

Mined grade

g/t Au

4.61

4.60

4.60

6.19

5.04

g/t Ag

93.71

69.61

91.55

68.33

79.17

Contained metal

oz Au

2,017

3,376

2,651

3,941

11,985

oz Ag

41,000

51,139

52,791

43,470

188,400

Open pit mining

Ore mined

tonnes

96,177

84,429

88,429

45,708

314,742

Mined grade

g/t Au

1.31

1.28

1.59

2.45

1.54

g/t Ag

27.01

21.10

24.41

53.21

28.68

Contained metal

oz Au

4,051

3,478

4,519

3,615

15,663

oz Ag

85,519

57,408

69,563

78,368

290,858

Mill production

Ore milled

tonnes

103,323

106,777

106,771

61,153

378,024

Mill grade

g/t Au

1.81

2.15

2.04

4.05

1.94

g/t Ag

50.02

37.61

33.03

65.15

37.08

Contained metal

oz Au

6,023

7,384

7,004

7,985

28,396

oz Ag

166,540

129,388

113,619

128,374

537,922

Recovery

% Au

89.75%

86.50%

87.73%

91.51%

88.90%

% Ag

73.00%

70.34%

69.84%

78.27%

72.95%

Recovered gold

oz Au

5,406

6,387

6,145

7,307

25,245

Recovered silver

oz Ag

121,569

91,012

79,354

100,482

392,417

Gold & silver sales

Gold sold

oz Au

5,465

4,951

7,233

7,394

25,043

Silver sold

oz Ag

119,922

82,628

79,573

100,150

382,273

Inventory at end of quarter

Ore stocks

oz Au

74

96

63

56

56

oz Ag

2,735

1,514

1,166

1,031

1,031

Metal in circuit

oz Au

869

717

681

468

468

oz Ag

14,424

10,246

9,833

10,957

10,957

Finished product

oz Au

1,150

2,586

1,501

1,501

1,501

oz Ag

18,458

29,943

28,283

27,297

27,297

Quarterly Production Data

Figures 1 - 4: Key Quarterly Production Data

oz AuEq in ore mined

5,000

4,000

3,000

2,000

1,000

-

Fig 1. Underground mining

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

g/t AuEq in ore mined

oz AuEq in ore mined

6,000

5,000

4,000

3,000

2,000

1,000

-

Fig 2. Open-pit mining

g/t AuEq in ore mined

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Mar'16 Qtr

Jun'16 Qtr

Sep'16 Qtr

Dec'16 Qtr

Mar'16

Qtr

Jun'16

Qtr

Sep'16

Qtr

Dec'16

Qtr

Contained AuEq Mined grade AuEq

Contained AuEq Mined grade AuEq

Fig 4. Metal production

oz AuEq in ore milled

12,000

Fig 3. Ore milled

10,000

8,000

6,000

4,000

2,000

-

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

-

g/t AuEq in ore milled

oz Au & AuEq produced

6.0

10,000

5.0

8,000

4.0

6,000

3.0

4,000

2,000

-

Mar'16 Qtr

Jun'16 Qtr

Sep'16 Qtr

Dec'16 Qtr

oz Ag produced

2.0

1.0

0.0

Mar'16 Jun'16 Sep'16 Dec'16

Qtr Qtr Qtr Qtr

AuEq prodn Au prodn Ag prodn

Contained AuEq Milled grade AuEq

AuEq conversion is based upon the relative gold/silver price for the respective quarter: 80, 75, 68,73 for April, June, Sept, Dec quarters respectively

All-in Sustaining Cost (AISC)

Table 2: Tembang Operations - All-in Sustaining Cost (AISC)

Tembang

Unit

Dec Qtr 2016

Full Year 2016

Unit

Dec Qtr 2016

Full Year 2016

Mining costs

US$m

4,968

16,471

US$/oz

672

658

Processing costs

US$m

2,150

10,100

US$/oz

291

403

General & admin costs

US$m

1,227

4,980

US$/oz

166

199

Silver credits

US$m

(1,571)

(5,914)

US$/oz

(212)

(236)

Inventory movements

US$m

344

379

US$/oz

47

15

Cash costs

US$m

7,118

26,016

US$/oz

964

1,039

Royalties

US$m

392

1,379

US$/oz

53

55

Capital works (sustaining)

US$m

1,075

4,355

US$/oz

145

174

All-in Sustaining Cost

US$m

8,585

31,750

US$/oz

1,162

1,268

Production

oz Au

7,394

25,043

Tembang Operations

Underground Mining

Development & Stoping

The Belinau underground mine achieved a record development rate during the December 2016 quarter, despite the loss of a single boom jumbo drill at the beginning of December (refer to ASX announcement 5 December 2016). There was 26% increase in development productivity for the quarter, compounding the 63% productivity increase in the September quarter. Total development for the December quarter was 1,188 metres (averaging 4.3 cuts per day) compared to 969 metres in the September quarter (average of 3.5 cuts per day). The development rate prior to the loss of the jumbo in December was 5.0 cuts per day (922m for the months of October and November).

The damaged jumbo is currently being repaired on site and is expected to return to service by the end of January 2017. A third, new, single boom jumbo has been procured and is scheduled to commence underground drilling during the 3rd week of January. The 3 jumbos will provide temporary redundancy in the system, with the underground mine currently restricted by available headings.

Figure 5. New T1D Boomer arrived on site

The structure related to the perched water table and water inflow in December (refer to ASX announcement 5 December 2016) was identified and is believed to be a shallow-dipping dilational zone within the orebody that is exceptionally porous. The mine pumping systems at the time of the water inflow were unable to cope with the sudden surge of water and procedures are now in place to mitigate the risk of future inrushes, including a dewatering plan for the identified structure.

The decline continued steadily, with 201m developed during the December quarter compared to 198m

Sumatra Copper & Gold plc published this content on 20 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 20 January 2017 00:02:05 UTC.

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