An underground mine. Source: Adobe Stock
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ASX-listed and Indonesia-based microcap Sihayo Gold (ASX:SIH) reported on Monday it can see a pathway forward toward underground gold production.

Worth noting right off the bat is that the company’s only got $18M in cash.

Regardless, Sihayo was quick to highlight the “potential to add value” that a new underground mining study has provided.

That study, conceptual in nature, relates to Sihayo’s northern block of its Sorikmas permit (or “contract of work” in Indonesian regulatory parlance) in North Sumatra.

The “concept study” is based on a world where Sihayo mines higher-grade gold laying deeper underground. The study follows a recent JORC resource.

According to Sihayo, the study underscores the case for a “drift-and-fill operation [that] is technically feasible.” The company also claimed the study sees a pathway for lower CapEx, though, underground mines are never cheap.

Also worth considering is that “a trade-off study is now required to determine the optimum combination of open pit and underground mining for the project.”

That might not be a comforting statement for anyone considering throwing some cash at the stock, though, the company did note that mineralisation remains open, per geotechs’ interpretations of existing data.

“This most recent underground mining study … could deliver a low CAPEX and lower risk start-up option with the potential to unlock the underlying potential of the larger Sihayo Mineral Resource,” Sihayo chief Colin Moorhead carefully worded on Monday.

“It is also clear that our exploration model … continues to be verified with the mineralisation remaining open and untested at depth and to the south.”

A Melbourne-based company called Mining One completed the study.

SIH was flat as the market headed towards its final hour, trading at 0.2c.

SIH by the numbers
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