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ASX Announcement

31 January 2022

Significant Results from High pH Leaching Test Work

Highlights:

  • Further metallurgical test work results assessing use of high pH pre- leaching have been received
  • On six fresh samples tested to date the expected gold recovery increased from an average of 35% to 80%
  • On 21 transition samples tested to date the expected gold recovery increased from 52.3% to 74.5%
  • Further test work commissioned on 80 samples to understand pH level, leach time and reagent consumption
  • Clear potential exists not only to increase Starter Project life-of-mine gold production but also to unlock additional unmined resources outside the current pit design

Sihayo Gold Limited (ASX:SIH - "Sihayo" or the "Company") is pleased to provide an update on the Company's most recent metallurgical test work exploring the use of high pH pre- leaching to improve recoveries in refractory ore for the Sihayo Starter Project.

Sihayo's Executive Chairman, Colin Moorhead commented on the latest results:

"High pH pre-leaching aims to recover gold otherwise locked up in fine grained arsenopyrite at Sihayo. Latest test work builds on earlier positive results and continues to indicate the potential for significant improvements in recoveries for more transitional and fresh ore types. This has the potential to not only increase life-of-mine gold production but also may unlock known higher grade fresh ore resources that currently remain unmined below our designed pits. The Company is aggressively pursuing further test work to incorporate the results into the processing flow sheet design."

Background

As outlined in the ASX:SIH announcement "Further Metallurgical Test Work Results", dated 23 September 2021, Sihayo has been investigating the use of high pH pre-leaching of transitional and fresh ore types as a method of improving plant recoveries above levels currently adopted in feasibility studies for the Sihayo Starter Project. In the Definitive Feasibility Study completed in 2020 (refer to ASX:SIH announcement "Results of Feasibility

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Study", dated 23 June 2020), the average life-of-mine ("LOM") recovery was assumed to be 71% and Sihayo considers improved metallurgical recoveries as an area of opportunity to significantly improve project economics.

The ore comprising the mine plan has been characterised into three broad categories based on oxidation state - oxide, transitional or fresh ore. Generally, metallurgical recoveries within the oxide ore are relatively uniform and consistently greater than 80% and mostly over 90%. Within the more refractory transitional and fresh material, recoveries are highly variable, ranging from less than 10% to 90%.

Sihayo's current metallurgical test work program includes assessing opportunities to improve metallurgical recoveries in both transitional and fresh ore.

Current Metallurgical Test Work Program

During the last six months Sihayo has been investigating the use of a high pH (~13) leach (pre-leach) followed by conventional carbon-in-leach (CIL) gold extraction.

A total of 27 crushed core samples of fresh to transitional ore material taken from selected holes drilled in the 2019 resource definition program at Sihayo (refer to Figure 1) was packed and dispatched to ALS Metallurgy Pty Ltd in Perth for high pH cyanide bottle-roll gold analyses. Results indicate that where the samples are fresh and transitional material with >0.5% sulphide sulphur, the effect of the pre-leach is to penetrate the arsenic minerals allowing enhanced gold recoveries. On fully oxidised material there is little to no benefit. Across 27 transitional and fresh sulphide samples tested, the increase in gold recovery ranges from 10% to 50% in absolute terms.

Table 1 shows the impact of the high pH pre-leach on individual drill intercepts while Table 2 shows the effect on composite samples of transitional and fresh material.

The results shown in Table 1 and Table 2 show consistent and significant uplifts in gold recoveries using high pH pre-leaching. On six fresh samples tested to date the expected recovery increased from an average of 35% to 80%. On 21 transitional samples tested to date the expected recovery increased from 52.3% to 74.5%.

The pre-leach takes around 12 hours and is estimated to add between $5 and $10/t milled to the processing costs.

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Table 1: Comparison of cyanide bottle-roll leach analyses on individual drill samples (See Appendix for details)

Depth (m)

Original

Recovery

Recovery

Hole ID

Sample ID

Gold grade

Oxidation

Without

With

From

To

(g/t) Fire

State

high pH

high pH

Assay

pre-leach

pre-leach

(FA51)

SHDD550

1013117

34.3

34.95

9.46

46.5%

80.2%

Transition

SHDD564

1013845

96

97

7.04

60.5%

70.6%

Transition

SHDD605

1015932

48

49

1.71

70.8%

78.0%

Transition

SHDD568

1014105

41

42

4.4

21.8%

67.8%

Transition

SHDD571

1014301

96

97

1.46

24.7%

77.9%

Transition

SHDD573

1014398

67

68

4.13

67.8%

84.2%

Transition

SHDD587

1014928

97

98

1.13

21.2%

71.1%

Transition

SHDD594

1015239

94

95

2.83

59.7%

85.8%

Transition

SHDD596

1015355

106

107

5.26

58.9%

55.7%

Transition

SHDD598

1015503

90

91

5.83

37.7%

49.4%

Transition

SHDD603

1015828

79

80

2.00

67.5%

80.3%

Transition

SHDD606

1015964

140

141

1.39

25.9%

62.5%

Transition

SHDD606

1015965

141

142

3.83

70.5%

82.5%

Transition

SHDD606

1015967

143

144

4.03

68.7%

82.4%

Transition

SHDD606

1015969

145

146

4.7

63.4%

79.2%

Transition

SHDD606

1015970

146

147

6.73

62.1%

98.7%

Transition

SHDD606

1015974

150

151

13.6

76.5%

84.3%

Transition

SHDD606

1015981

151

155

7.31

56.2%

73.3%

Transition

SHDD606

1015982

156

157

11.9

55.5%

77.2%

Transition

SHDD606

1015984

157

158

11.2

31.7%

63.7%

Transition

SHDD606

1014136

158

159

2.41

63.0%

52.6%

Transition

SHDD569

1015437

61

62

2.39

41.1%

83.8%

Fresh

SHDD597

1015476

59

60

1.15

41.4%

84.0%

Fresh

SHDD597

1015498

89

90

1.58

26.1%

67.1%

Fresh

SHDD598

1015497

85

86

2.04

31.0%

86.2%

Fresh

SHDD598

1015475

84

85

0.42

37.3%

90.0%

Fresh

SHDD597

1013117

88

89

9.46

33.3%

84.0%

Fresh

Table 2: Test results on drill hole sample composites

Composite

Au grade

Conventional CIL

High pH Gold

Oxidation State

Sulphide

g/t

Gold Recovery

Recovery

Sulphur %

Composite C

1.59

82.3

81.1

Transition

0.06

Composite D

3.61

77.6

80.2

Transition

0.43

Composite E

3.94

61.2

86.3

Transition

1.47

Composite F

1.58

37.4

64.2

Fresh

2.73

Selected on the basis of oxidation and sulphide sulphur content

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Figure 1: Sihayo - Drill Hole Locations for samples used in metallurgical test work

Future work

Further test work is planned on another 80 samples to confirm results reported above. Work will also occur to optimise the pre-leach conditions in terms of pH, leach time and reagent consumption.

Additional Potential Upside

The introduction of a high pH pre-leaching step into the Sihayo gold processing circuit has potential to unlock additional fresh to transitional gold resources, including high-grade gold- sulphide zones that are known to exist below the current pit design (refer to Figure 2).

The high-grade zones below the current pit design are constrained by lack of drilling. A drilling program is being planned to better define the limits of this mineralisation and to investigate the potential for higher-grade feeder structures located beneath and/or within the delineated gold resource. Drilling of this target may commence in the H1-2022.

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Figure 2: Sihayo - Showing higher grade resource (>3 g/t Au) and drill holes below designed pit-shell (oblique view looking NW)

This announcement has been authorised by Sihayo's Board of Directors.

For further information, please contact:

Colin Moorhead

Roderick Crowther

Executive Chairman

Chief Financial Officer

E:colin.moorhead@sihayogold.com

E:roderick.crowther@sihayogold.com

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Sihayo Gold Limited published this content on 31 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2022 07:17:07 UTC.