Company Overview
Sunridge Gold has been exploring for VMS base and precious metal deposits in Eritrea since 2003 and has successfully defined 4 deposits on the Asmara Project located outside of Asmara which contain significant amounts of copper, zinc, gold, and silver. A Feasibility study is currently examining an integrated mining operation on all 4 deposits and is on schedule for completion in Q2 2013.
The Feasibility Study is a continuation of a prefeasibility study (PFS) completed in May 2012 which considered an integrated mining operation for all 4 deposits with a central mill located at the large Emba Derho Deposit. The Prefeasibility Study demonstrates very robust economics, with the Net Present Value (NPV) of the project was shown to be $555 million dollars with a 10% discount applied ($1.642 Billion NPV with zero discount) and the Internal rate of return (IRR) is 27%.
The integrated mining operation outlined in the PFS details a processing facility at Emba Derho that processes ore from open pit mines at Emba Derho, Debarwa, and Gupo and an underground mine at Adi Nefas.
The current Feasibly Study will differ from PFS as it is considering a staged start up beginning with the mining and direct shipping of 116,000 tonnes of high-grade copper material averaging 16% copper, 3.0 g/t gold, and 77 g/t silver from the DSO Zone at Debarwa. This will enable the project to be in production earlier and will generate early cash flow and reduce initial capital costs.
Also in the staged start up mining plan, a heap leach operation will process the gold from the gold caps early in the mine life and a floatation plant will begin by processing the supergene copper material.
Full production will begin in the 3rd year of operation and will process 4 million tonnes of material per annum. Annual production will average 57.3 million lbs. (26,000 tonnes) copper, 143.2 million lbs. (65,000 tonnes) zinc, 24,000 oz gold, 787,000 oz silver over 13 years of full production.
Total metal production over the life of the mine is 804 million pounds (365,000 tonnes) of copper, 1.789 million pounds (812,000 tonnes) of zinc, 415,000 ounces of gold, and 11 million ounces of silver. Sunridge has now begun a Feasibility Study and is expected to complete in Q1 2013.
Sunridge also continues to explore new targets. Encouraging results from recent drilling at Adi Rassi support Sunridge management's belief that Adi Rassi is a new large copper-gold discovery that has the potential to become Sunridge's fifth deposit on the Asmara Project.
Sunridge is operated by an entrepreneurial team with a proven record of discovery, exploration and development success with companies such as Nevsun Resources Ltd. and Bema Gold Corp.
www.sunridgegold.com/s/Home.asp
Stefan Ioannou (Haywood Securities) über Sunridge Gold:
(aus einem Interview mit "The Gold Report" vom 2.Januar 2013)
Stefan Ioannou: People are not familiar with Eritrea, and red flags typically go up when anything related to Northeast Africa is mentioned. Nevsun was basically the first publicly traded company to get into Eritrea. It made the Bisha discovery and over 10 years, took it through exploration, permitting, development, construction and into production. Along the way skeptics pointed to the risk of the government taking more than its fair share of the project.
I give the Eritrean government a lot of credit. It has been very pragmatic. The government recognized early on that it had to work with foreign investment to make a mining industry a reality, and not just with Nevsun. The last time I checked there were about 15 exploration companies active in Eritrea. I have been to Eritrea twice now and had very good experiences both times. The common sentiment among visitors is that it was safer than they expected.
Sunridge Gold Corp. (SGC:TSX.V) is also active in Eritrea, as is Chalice Gold Mines Ltd. (CXN:TSX; CHN:ASX). The latter is exploring for VMS deposits along the same belt that hosts Bisha, and recently announced a discovery.
The Gold Report: Sunridge just published a resource estimate for its Adi Rassi discovery. Given the size and scope of the deposit and Sunridge's lack of cash, could this be a takeover target?
Stefan Ioannou: I think the Eritrean government would like to see more than one foreign player developing the mining industry in Eritrea.
With respect to takeover potential, I think the completion of a feasibility study, expected in Q2/13, on the company's Asmara project will be key. The feasibility study will not include Adi Rassi. It is based on four other projects, the Emba Derho, Debarwa and Adi Nefas copper-zinc-gold and silver deposits and the Gupo gold deposit. That said, Adi Rassi is located near Debarwa and could ultimately develop into the Asmara project's fifth deposit.
Also important for Sunridge is the Eritrean government's intention to buy upwards of a 30% interest in the project, similar to what it did with Nevsun at Bisha. The price still needs to be determined. That may happen before the feasibility comes out or the government may use the feasibility study as the basis of the valuation.
The government paid fair value to Nevsun and we expect the same to happen with Sunridge. Once the government does that, it will signal a vote of confidence to the investment community that things are moving in the right direction.
The feasibility study, of course, will give us a better handle on the project's economics and what it should be worth. The big questions include what it will cost to build it, how much money Sunridge will have to raise, and what that means from a dilution point of view.
www.theaureport.com/pub/na/14898
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