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Sihayo Gold upgrades Sihayo Pungkut Gold resource estimate to 10.7Mt

Sihayo Gold upgrades Sihayo Pungkut Gold resource estimate to 10.7Mt

Sihayo Gold (ASX: SIH) has reported the new upgraded JORC compliant resource estimate of 9.6Mt at 3.0g/t Au containing 910,000 ounces of gold for the Sihayo resource within its 75% owned Sihayo Pungkut gold project in North Sumatra, Indonesia, representing a significant gold grade increase.

The new estimate is based on an extensive infill drilling program completed between Dec 2009 and May 2010. The upgraded estimate for the Sihayo resource takes the total project JORC compliant resource to 10.7Mt at 2.9g/t containing 1.01 million ounces.

The new resource estimate has resulted in 90% of the Sihayo resource being upgraded from Inferred to Indicated Category.

The gold grade has improved by 25% from the previous JORC statement and will most likely provide significant economic improvements to the overall project. The Sihayo resource remains open to the north, east and south.

Paul Willis, CEO, said “infill drilling results and new resource figures are very encouraging and the substantial increase in the gold grade is economically very significant."

"This new resource estimate lays down a solid foundation for the ongoing Definitive Feasibility Study (DFS) with the company now confident of taking the project through to production.”

“It is also clear that the resource is constrained by drilling in a number of directions and that mineralisation is expected to extend beyond the current resource outline. Ongoing exploration / resource extension drilling will continue to seek to identify the overall resource potential of the Sihayo - Sambung area,” he added.

The new resource estimate covers an area of approximately 1.2 km by 0.6km and is based on approximately 320 diamond drill holes which were drilled on a nominal 25 metre by 50 metre grid.

Drilling identified two primary sub horizontal gold zones. The infill drilling confirmed the geological continuity of these horizons at Sihayo but also highlighted a series of thicker high grade zones with grades up to 19m at 13.4g/t Au and 26m at 9.4g/t Au within the lower horizon.

The resource is exposed at surface at its northwestern end and extends to a depth of 200 metres along strike at its southeastern end. The resource is highly oxidized to depths of about 40 metres and there are variable levels of oxidation down to about approximately 150 metres depth.

The resource estimate was completed by international industry consultants Runge Limited based on data and geological information supplied by PT Sorikmas (75% owned subsidiary of Sihayo Gold Limited and 25% owned by PT Antam Tbk). No mining dilution has been included in the resource estimation.

The company said potential extensions to the resource remain in the most part untested and there remains excellent potential to significantly expand the resource base.

In addition to the recent resource drilling, metallurgical, geotechnical, infrastructure and environmental studies are well underway with the aim of completing the DFS by the end of 2010.

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