ASXANNOUNCEMENT

4SEPTEMBER2011 OPERATIONAL AND DFS UPDATE

POTENTIAL 22% LIFT IN ANNUAL AVERAGE GOLD PRODUCTION & 10% REDUCTION IN AVERAGE SITE CASH OPERATING COSTS
(INCL ROYALTIES) TheBoardofSihayoGoldLimited(ASX:SIH)ispleasedtoprovideanOperationalandDefinitive FeasibilityStudy(DFS)updateforits75%ownedSihayoPungkutGoldProject(SPGP)inNorth Sumatra,Indonesia. OperationalUpdate DrillingactivitiesattheSPGParesettoresumeinlateSeptember,followingtheendofthe Ramahdanperiodandtheassociatedpublicholidays,withafocusonthefinalphaseofinfilldrilling fortheSPGP.Aninfillprogrammeofapproximately3,000metersisrequiredtolikelyconvertthe limitedamountofInferredResourcecontainedwithintheoverallJORCcompliantresourceintothe higherIndicatedcategory.Theprogrammewillbeundertakenwithtwodiamonddrillrigsandgiven therelativelyshallowdepthoftheplannedholesitisanticipatedthatthedrillingwillbecompleted withinthreemonths. Oncetheinfillprogrammeiscomplete,ongoingexplorationdrillingshalltargetpotentialnear surfacemineralisationalongstrikefromtheexistingJORCResources,whichcouldpotentiallybe includedintheearlyyearsofthecurrentproposedminescheduleasdescribedwithintheDFS. Figure1belowshowstheSihayoandSambungResourcesandhighlightsthepotentialresource extensionstothenorthwestandsoutheastoftheSihayodeposit. GovernmentandCommunitymeetings Aspreviouslyreported,onSunday29thMay,agroupofdemonstrators,believedtobesupportedby therepresentativesofillegalartisanalminersfromtheregion,arrivedandcausedsignificantdamage toSihayosexplorationcamp. Overthepastthreemonths,ourcompanyrelationsteamhasconductedoverfortymeetingswith thekeySPGPstakeholdersincluding;localcommunitymembers,villageheads,religiousgroups, NGOs,localandprovincialGovernmentrepresentatives,localandprovincialPoliceandArmy commanders,thenewlyelectedBupatiofMandailingNatal,NorthSumatraandtheGovernorof NorthSumatra.Themeetingshavebeenfocusedonensuringthatthefutureactivitiesofthe Companyareconductedinasafeandsecureenvironmentwithouttheriskofanyfurtherunlawful actsagainsttheCompany. Aswithanyminingproject,ourrelationshipwiththelocalcommunityiscriticaltoourlongterm operationalsuccess.Aspartofourongoingcommunityprogrammewearetaking15local representativesonasitevisittoanewlycommissionedgoldmineinNorthSulawesi,Indonesiain midSeptember,toshowthemfirsthandtheoperational,environmentalandcommunityaspectsof amineofsimilarsizetoourplannedSPGP.

DefinitiveFeasibilityStudy(DFS) ThefinalphaseoftheDFSworkrelatedtotheoverallmetallurgicalgoldrecoveriesisprogressing well.Over4,500additionalcyanideleachtestsarebeingcompleted(1,500completedtodate) acrossthemultiplemineralisationtypesthatmakeuptheSihayoandSambungResourcesandthe initialresultssuggestthatsomeimprovementinoverallprocessgoldrecoveriesmaybeachievable. ItisanticipatedthatthemetallurgicalworkwillbecompletedbytheendofOctober. Ongoingassessmentoftheoptimalplantcapacityhasindicatedthatanincreasefromthecurrent 1.25mtpacapacitytoarateof1.5mtpaiseconomicallypositive.TheCapexandOpexcomponents ofanexpansionto1.5mtpahavebeencompletedtoDFSstandardandthekeysummaryresultsare detailedinthetablebelow.Anadditionalscenarioofimprovedrecoveriesovertheinitialminelife hasalsobeenincludedinthetable,however,itneedstobeemphasisedthatthisismerelyfor indicativepurposesatthisstageandanyimprovementinoverallrecoverieswillbeconfirmedatthe conclusionofthecurrentmetallurgicaltestworkprogramme. TheSambungResourcehasbeenincludedintheminingscheduleoftheexpanded1.5mtpa throughputcase,however,itmustbenotedthattheSambungResourceiscurrentlyintheInferred categoryandthereforewillrequireasuccessfulinfilldrillingprogrammetobringtheresourceupto therequiredIndicatedcategoryforitsultimateinclusionintheDFSminingschedule. KeyDFSparametersforthe1.25mtpaand1.5mtpacases 1.5mtpacasedelivers22%increaseinaverageannualgoldproductionand10% decreaseinsitecashoperatingcosts(includingroyalties)comparedwith1.25mtpa case

SihayoPungkutGoldProject CapitalCost(precontingencyallowance) Preproductionmining InitialMineLife LOMTotaloreprocessed** LOMAverageanualgoldproduction LOMSiteCashCosts(includingroyalties) LOMaveragegoldrecoveries LOMaveragestripratio USDmill USDmill years Mt Oz US$/oz % Waste:Ore

1.25Mtpa 1.5Mtpa 80.4 Nil 7 8.6 87.1 11.2 7 10.2

1.5Mtpa* 87.1 11.2 7 10.2 93,000 639 75* 4:1

72,000 88,000 752 71.5 5.4:1 678 71.5 4:1

Note:1.5Mtpa*scenarioassumealiftinLOMaveragegoldrecoveriesto75%fromthebasecase71.5% Note:LOMTotaloreprocessedforthe1.5Mtpacaseincludes1.6MtcurrentlyclassifiedasInferredResource Note:InferredResourcematerialcomprises16%oftheforecasttotaloreprocessedinthe1.5Mtpacase

SambungJORCResource RungeLimitedcompletedanupdatedJORCResourcereportfortheSambungResourceinJuly2011. WhilsttherehasnotbeenanyadditionaldrillingsincethepreviousJORCReportcompletedin January2007,Rungehaveusedthegreaterknowledgebaseobtainedduringthepreperationofthe latestJORCReportfortheSihayoResourcetoassistinthecompletionofthenewSambungReport. Insummary,thenewJORCreportsawanincreaseintheestimatedcontainedgoldfrom100,000oz to123,200oz,adeclineintheaveragegradefrom2.6g/tAuto2.2g/tAuandarevisedcutoffgrade of1.2g/tcomparedto1.5g/tpreviously.ThetablebelowdetailsthenewSambungJORCresource.

SambungInferredMineralResourceEstimate Type Oxide Transitional Fresh Total Tonnes t 313,000 1,404,000 4,000 1,721,000 Au g/t 2.3 2.2 2 2.2 Au Au ounces cutoff 22,900 100,100 200 123,200 1.2g/t

Note1:Errorsmayoccurduetorounding Note2:SambungresourceJORCestimatecompletedbyRungeLimited Note2:Competentperson,RobWilliams

RegionalExploration Fortheentireperiodofthedisruptionatourmainproject,regionalexplorationworkatTambang Tinggi,HutabargotJuluandHutaPungkut,includingdrillingatTambangTinggi,hascontinued withoutissue.RefertoFigure2belowforthelocationofallprospects. HutabargotJuluepithermalgoldprospect Theworkprogramhassignificantlyexpandedtheknownmineralisationpotentialoftheprospectto the north, east and west. The underlying geology, soil and rock chip geochemistry results are containedinFigures35below. New mineralised vein systems have been discovered to the east (fault vein) and to the north (Kaporasprospect).SoilandIPprogramswillbeextendedtothenorthwesttocovertheexpanding anomalouszones. TheKaporasEastsoilgoldanomalyisapproximately1x1kmsqandopenundercovertotheeast. Theanomalyisconsistentwithabroadareaofmagnetitedestruction(alteration)andrepresentsa highprioritytargetforbulktonnagegoldpotential. TheKaporasWestsoilgoldanomalyisalsoapproximately1x1kmsqandisopentothenorthand thewestandisconsistentwithamappedgranodioriteintrusive. GoldmineralisationatHutabargotJuluishostedinepithermalveinsandstructureswithinanorth southtrendingbeltofdaciticvolcanics.Themineralisedveinsystemsarecoveredtothesouthby postmineralacidic(daciterhyolite)flowsandpyroclasticsandtotheeastbyquaternaryalluvium.

Hutabargot Julu is a high priority for further exploration and potential discovery of both high gradelowtonnagegolddepositsandbulktonnagelowgradegolddepositsandislocatedonly 8kmalongtrendfromtheSihayoandSambungResources. DrillingisexpectedtocommenceinlateSeptember. TambangTinggigoldandcopper/gold DrillingofthemultiplenearsurfacegoldtargetsintheTambangTinggiRegionisnearingthe completionofthefirstphase.Thesecondphaseofthedrillingprogrammewillbeaseriesofdeeper holestestingthecopper/goldpotentialindicatedbytheresultsofholesTTDD011andTTDD008. Conclusion Withthefinalphaseofinfilldrillingabouttocommenceatourmainprojectandconcurrentlyare commencementofdrillingatthehighlyprospectiveHutabargotJuluepithermalgoldprospect,the nextsixmonthsshouldprovetobeaveryexcitingperiodforourCompany. Yoursfaithfully, SIHAYOGOLDLIMITED

PaulWillis ChiefExecutiveOfficer 4September2011

CompetentPersonsStatements SihayoGoldLimited:Theinformationinthisreportthatrelatestoexploration,mineralresourcesororereservesisbasedoninformation compiledbyMrGrahamPetersen(BSc.Geol)whoisafulltimeemployeeofPTSorikmasMining(75%ownedsubsidiaryofSihayoGold Limited),andisaMemberoftheAusIMM.MrPetersenhassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeof depositunderconsiderationandtotheactivitywhichheisundertakingtoqualifyasacompetentpersonasdescribedbythe2004Edition oftheAustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves.MrPetersenconsentstotheinclusion inthisreportofthemattersbasedonhisinformationintheformandcontextinwhichitappears. RungeLimited:TheinformationinthisreportthatrelatestoMineralResourcesatSihayoandSambungisbasedoninformationcompiled byMrRobertWilliamsBSc,aMemberoftheAustralianInstituteofMiningandMetallurgy,whoisafulltimeemployeeofRungeLimited andhassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivity whichheisundertakingtoqualifyasaCompetentPersonasdefinedinthe2004EditionoftheAustralasianCodeofReportingfor ExplorationResults,MineralResourcesandOreReserves.MrWilliamsconsentstotheinclusioninthereportofthemattersbasedonhis informationintheformandcontextinwhichitappears. Modelling:BoththeSihayoandSambungdepositswereestimatedbyRungeLimitedusingOrdinaryKriginggradeinterpolation, constrainedbymineralisationenvelopespreparedusinganominal0.5g/tgoldcutoffgrade.Inallcasesaminimumdownholeintercept lengthof2mwasadopted. TheblockdimensionsusedintheSihayomodelwere25mEWby10mNSby5mverticalwithsubcellsof6.25mby2.5mby1.25m,whilea blockdimensionof20mEWby20mNSby5mverticalwithsubcellsof5mby5mby1.25mwasadoptedfortheSambungmodel.Statistical analysisofthedepositdeterminedthatnohighgradecutswererequiredintheSihayoestimate,althougha25g/tAuhasbeenusedinthe Sambungestimate.Bulkdensitywasassignedinthemodelbasedupontheresultsof4,629bulkdensitydeterminations.

Note Allstatementsinthisreport,otherthanstatementsofhistoricalfactsthataddressfuturetimings,activities,eventsanddevelopmentsthat theCompanyexpects,areforwardlookingstatements.AlthoughSihayoGoldLimited,itssubsidiaries,officersandconsultantsbelievethe expectationsexpressedinsuchforwardlookingstatementsarebasedonreasonableexpectations,investorsarecautionedthatsuch statementsarenotguaranteesoffutureperformanceandactualresultsordevelopmentsmaydiffermateriallyfromthoseintheforward lookingstatements.Factorsthatcouldcauseactualresultstodiffermateriallyfromforwardlookingstatementsinclude,amongstother thingscommodityprices,continuedavailabilityofcapitalandfinancing,timingandreceiptofenvironmentalandotherregulatory approvals,andgeneraleconomic,marketorbusinessconditions.

Figure 1: SPGP mineralisation plan showing surface projection of Sihayo and Sambung JORC resources

Figure 2: Sihayo Pungkut Gold Project and prospect locations

Figure 3: Hutabargot Julu underlying geology and Au rock chip geochemistry

Figure 4: Hutabargot Julu gold soil geochemsitry

Figure 5: Hutabargot Julu silver soil geochemistry