Sihayo Gold Limited (ASX:SIH) Updates On Sihayo Pungkut Gold Project

Perth, Dec 29, 2010 AEST (ABN Newswire) - Sihayo Gold Limited (ASX:SIH) is pleased to provide the following update on progress at the Company's 75% owned Sihayo Pungkut gold project located in North Sumatra, Indonesia.

Definitive Feasibility Study

Detailed work on all aspects of the Definitive Feasibility Study ("DFS") is nearing completion and will be available by the end of the first quarter 2011. The content of the DFS is progressing satisfactorily however the delivery date is delayed due to the overall volume of work being completed across the mining industry in general and the resultant pressures on key industry consultants. We have been working closely with our consultants to minimise the delay, but at the same time it is the quality of the work being completed which is our highest priority.

Resource Definition and Exploration Drilling

Currently there are five (5) diamond drilling rigs on site. Drilling is focussed adjacent to the South East boundary of the currently defined Sihayo JORC Resource (9.6 Mt @ 3.0 g/t Au for 910,000 oz) as shown in Figure 1 (see link at the bottom of the release).

We have identified two potential new lodes of mineralisation in this area. Ongoing drilling shall determine whether these lodes can be added to the overall JORC Resource estimate.

If the new lodes were to meet the JORC requirements then it would require the current proposed pit design, as per the DFS, to be re-worked and extended. We are taking this possibility into account as we finalise all the DFS work.

Updated drilling results will be released in January and February 2011.

Regional Exploration

Our level of pre-drilling exploration work continues to increase across the Contract of Work ("COW") area.

The Tambang Tinggi, porphyry copper - gold prospect, is the primary focus at present.

The previously announced Induced Polarisation ("IP") survey over the prospect is now approximately 50% complete.

The proposed new drilling program is being finalised and we expect to commence drilling in early February 2011.

The drilling program shall initially follow up the previous scout program that yielded a best intercept of 112.6 m @ 1.52 g/t Au from surface, including 25m @ 4.58 g/t Au from 31m. Our current work program has confirmed that mineralisation is open along strike and at depth.

In addition, a further three near surface gold targets have been identified in close proximity to the Tambang Tinggi prospect and these targets will also be part of the drilling program going forward.

Our second key regional target is the Hutabargot Julu, epithermal vein prospect.

We have now identified ten (10) north-south trending veins across this prospect with a best historic drill intercept of 5m @ 37.7 g/t from 47m providing significant encouragement.

We are aiming to re-commence drilling at Hutabargot Julu towards the end of the first quarter 2011.

Figure 2 (see link at the bottom of the release) shows the location of the Tambang Tinggi and Hutabargot Julu prospects in relation to the Sihayo - Sambung JORC Resource (10.7 Mt @ 2.9 g/t Au for 1.01 Million ounces).

Airborne Magnetic and Radiometric Survey

The airborne magnetic and radiometric survey over the entire COW area is scheduled to commence on the 8th January 2011. The airborne survey will have a particular emphasis on known porphyry copper gold style targets such as; Singalancar, Rura Balancing, Namilas, Tambang Tinggi, Siandon and Mandagang.

Conclusion

"The modest delay in the completion and subsequent release of our DFS results is frustrating, but the possible upside to our overall resource from the area immediately to the south is highly encouraging. In addition, we are confident that our regional exploration programs will deliver some encouraging results. We look forward to updating the market during the first quarter of 2011 on the progress and results achieved.

Finally, I wish all our shareholders and project stakeholders a happy and safe Festive Season and New Year", said Peter Bilbe, Chairman of the Company.

For the complete Sihayo Gold announcement including maps, please refer to the following link:

http://www.abnnewswire.net/media/en/docs/64917-ASX-SIH-522922.pdf

Contact

Paul Willis Chief Executive Officer Email: sihayogold@sihayogold.com Tel: +61-8-9368-4544 http://www.sihayogold.com