VANCOUVER, British Columbia--(BUSINESS WIRE)--
Sunridge Gold Corp. (the “Company” or “Sunridge”) (SGC: TSX.V/SGCNF:
OTCQX) is pleased to provide a summary of the planned activities in 2015
for the Asmara Project, Eritrea. The Asmara Project is owned and
operated by the Asmara Mining Share Company (“AMSC”) which is
owned 60% by Sunridge and 40% by Eritrean National Mining Corporation
(“ENAMCO”). AMSC expects to achieve several key milestones over 2015 to
meet its goal of commencing mining operations in the fourth quarter of
2015.
A program and budget for 2015 has been approved by the directors and
shareholders of AMSC for approximately US$32 million, of which Sunridge
is responsible for funding two-thirds and ENAMCO one-third. Included in
this budget is approximately US$18 million to purchase trucks, loaders,
drills and crushers for the capital cost of the planned Phase 1A mining
operation. Phase 1A is the open-pit mining of near surface high-grade
copper and gold ore from the Debarwa deposit that will be crushed and
shipped directly to a smelter (known as direct shipping ore or “DSO”).
AMSC expects that the equipment for Phase 1A will be financed by the
equipment vendors. Sunridge, together with its financial advisor, is in
discussions with a number of other potential financing sources to fund
the remaining capital costs for AMSC. Also in the Shareholders’
Agreement (see Sunridge News Release dated June 27, 2014), the parties
have agreed that ENAMCO will fund the next approximately US$6 million to
AMSC for its portion of retroactive Sunridge contributions to the
project.
The following is a summary of the planned important milestones that AMSC
is expected to pass in 2015:
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Q2 2015 – Mining License and Mining Agreement
The permitting process to receive a mining license for operation of the
Asmara Project was initiated in early 2014 by the submittal of the
Social and Environmental Impact Assessment (SEIA) report and other
associated documents to the Ministry of Energy and Mines (“MEM”). The
MEM appointed an independent engineering company to initiate a due
diligence review of the Asmara Project feasibility study and SEIA.. The
report of this work was completed in November 2014 and presented to MEM
and other Eritrean government ministries during the first week of
January 2015. The finding of this report will be reviewed and commented
on by MEM and the Eritrean regulators prior to approval. The permitting
for water use, land use and construction permits all form part of the
mining agreement. AMSC expects the mining license and mining agreement
to be issued in Q2 2015.
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Q3 2015– Financing Finalized
Sunridge management, with advisors Endeavour Financial, have been
reviewing all options for project financing for AMSC with the goal of
finalizing the optimum financing structure after the receipt of the
mining license. These options include debt from commercial and
development banks, equipment financing and financing from commodity
off-take and royalty and streaming groups. At this stage several
financing options are under consideration.
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Q3 2015 Procurement and mobilization of equipment
AMSC to order mobile equipment (trucks, loaders, drills and crushers)
for the start of Phase 1A operations.
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Q3 2015 Mine personnel hired
AMSC will hire approximately 250 new employees over the course of the
year with the majority hired in October 2015.
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Q4 2015 Mining operations commence with waste stripping and
stockpiling of gold oxide ore
Phase 1A mining operations start at Debarwa in October 2015 first with
training and then stripping of waste overlying the DSO material and
open-pit mining of the gold oxide. The stockpiled gold oxide ore will be
processed as part of Phase 1B gold heap-leach operations.
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Q2 2016 – DSO extracted and shipped
AMSC expects to begin extraction and shipping of the DSO in the second
quarter of 2016. In Phase 1A, the high-grade copper DSO will be
mined from the Debarwa deposit by open-pit methods, crushed and loaded
into containers and transported 120 km to the port facility at Massawa
for shipping and sale to a smelter.
This DSO zone hosts 116,000 tonnes of high-grade material with an
average grade of 15.6% copper, 2.96 g/t gold, and 76.8 g/t silver,
containing 39 million lbs copper, 11 thousand ounces of gold, and 286
thousand ounces of silver. The C1 cash cost for Phase 1A is expected to
be $0.70 to $0.80 per pound of copper. The Key assumptions used in the
calculation include $1.10 per litre of diesel fuel, as well as by
product revenues calculated at $1100 per ounce gold and $15 per ounce
silver.
It is expected that proceeds from Phase1A will cover all capital costs
for the expansion into Phase 1B the gold heap-leach operation of near
surface gold ore on the Asmara Project. The capex of Phase 1B is
estimated to be approximately $50 million and commencement of
construction is estimated to be mid to late 2016.
Sunridge Finances
ENAMCO has agreed to purchase the 30% working interest of AMSC for a
total purchase price of US$18.33 million of which US$5 million has been
paid to date. The balance of US$13.33 million will be paid in
installments beginning upon signing a finance agreement that secures a
significant portion of the financing required to develop the Asmara
Property (the “Financing Agreement”).
Social Engagement and Environmental Monitoring:
AMSC continue the ongoing program of engagement of local communities
that will be affected by the development of the Asmara Project. There
are two project information centres on the project open for all
residents to visit, review and comment on the proposed project designs.
AMSC has an ongoing program of environmental monitoring to meet both
international and national environmental regulations. The monitoring
will continue to the initialization of production and beyond. In
addition, AMSC environmental department has initiated reclamation
test-work at Debarwa site in preparation of future closure activities.
Summary of Asmara Project Feasibility Study:
The Asmara Project feasibility study (the “Study”) dated effective May
16, 2013 (amended March 2014), demonstrated that mining the four
advanced deposits that make up the Asmara Project (Emba Derho, Adi
Nefas, Gupo Gold and Debarwa) and processing of the ore at a central
location near the large Emba Derho deposit is economically robust with a
pre-tax net present value (“NPV”) of $692 million (using a 10% discount
rate) and with a pre-tax internal rate of return (“IRR”) of 34%. The
post-tax NPV is $428 million with an IRR of 27%. The Study outlines a
three-phase start-up mining operation which would begin with Phase 1A in
2015 of high-grade copper DSO production from the Debarwa
deposit, followed by Phase 1B heap-leaching of near surface gold, Phase
2 supergene copper production, then zinc and copper at a full production
rate of 4 million tonnes per year. At full production, the Asmara Mine
will produce an average annual production of 65 million lbs (29,000 t)
copper, 184 million lbs. (83,000 t) zinc, 42,000 oz gold, and 1 million
oz silver over the first 8 years. The life of mine is 17 years.
Qualified Person:
Michael Hopley, President and CEO of Sunridge Gold Corp. is the
Company's Qualified Person responsible for the contents of this press
release and has reviewed the information in the release and confirmed
that it is consistent with that provided by the independent Qualified
Person responsible for the Study.
ABOUT SUNRIDGE:
Sunridge is a mineral exploration and development company focused on the
acquisition, exploration, discovery and development of base and precious
metal projects on the Asmara Project in Eritrea. Sunridge currently has
approximately 210 million shares outstanding and trades on the TSX
Venture Exchange under the symbol SGC. For additional information on the
Company and its projects please view the slide show on our website at www.sunridgegold.com
or call Greg Davis at the number listed below.
SUNRIDGE GOLD CORP.
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“Michael Hopley”
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For further information contact:
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Michael Hopley, President and Chief Executive Officer
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Greg Davis, VP Business Development
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Email: greg@sunridgegold.com
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Tel: 604-688-1263 (direct)
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Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
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This news release contains forward-looking statements that are based
on the Company’s current expectations and estimates. Forward-looking
statements are frequently characterized by words such as “plan”,
“expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”,
“suggest”, “indicate” and other similar words or statements that certain
events or conditions “may” or “will” occur. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that could cause actual events or results to differ materially
from estimated or anticipated events or results implied or expressed in
such forward-looking statements. Forward looking statements may include
the timing and success of any application for a mining license,
permitting or of debt financing. Risk and uncertain factors
include, among others: the actual results of current exploration
activities; conclusions of economic evaluations; changes in project
parameters as plans to continue to be refined; possible variations in
ore grade or recovery rates; accidents, labour disputes and other risks
of the mining industry; delays in obtaining governmental approvals, a
mining license, or debt financing, uncertainties in negotiating
commercial arrangements with government entities; and fluctuations in
metal prices. There may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. Any
forward-looking statement speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, the
Company disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or
results or otherwise. Forward-looking statements are not guarantees of
future performance and accordingly undue reliance should not be put on
such statements due to the inherent uncertainty therein.