VANCOUVER, British Columbia--(BUSINESS WIRE)--
Sunridge Gold Corp. (the “Company” or “Sunridge”) (SGC: TSX.V/SGCNF:
OTCQX) is pleased to report that the recent signing of the shareholder
agreement with the Eritrean National Mining Corporation (“ENAMCO”) (see
June 27, 2014 news release) has accelerated activities on the Asmara
copper-zinc-gold project (the “Asmara Project”) so that subject to
permitting and funding the Asmara Project is on track to commence
production in 2015. The Asmara Project is to be held and operated by the
Asmara Mining Share Company (“AMSCo”) and will be owned 60% by Sunridge,
40% by ENAMCO.
The mining plan in the Asmara Project feasibility study completed in
2013 outlined a 3 phase start up designed to reduce initial capital
costs. In Phase 1A, the high-grade copper (direct shipping ore,
“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
contains 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. In order to access the
DSO zone, which is found about 30 meters from surface, the enriched gold
oxide cap at surface will be mined and this material along with the
similar gold cap from Emba Derho will make up Phase 1B,which
is the open-pit mining of the gold caps from both deposits with recovery
of the gold by heap-leaching methods. Providing that the mining license
is issued by the government to AMSCo as expected in late 2014 or early
2015, and funding is in place, then Phase 1 production is on track to
start in the 4th quarter of 2015.
Capital and operating costs for Phase 1 are currently being reviewed in
detail as management has identified opportunities to potentially lower
these costs and further enhance the economics. Phase 1A capital
costs are expected to be significantly reduced than those outlined in
the feasibility study and the initial revenue from Phase 1A (DSO) will
fund the construction of Phase 1B (gold heap-leaching) facilities.
Summary of Shareholder Agreement between Sunridge and ENAMCO:
Sunridge announced on June 27, 2014, that Sunridge and ENAMCO have
executed a shareholders’ agreement (the “Shareholders’ Agreement”) for
the AMSCo, the operating entity which will own and operate the Asmara
Project. The first US$2 million of the US$18.3 million purchase price
for ENAMCO’s 30% interest in AMSCo has now been received by Sunridge and
the remainder will follow the schedule outlined in the June 27, 2014
news release.
AMSCo will be owned 60% by Sunridge and 40% by ENAMCO (30% participating
and 10% free carried interest) and will have a board of directors of
five, comprising three from Sunridge and two from ENAMCO. All future
project development or exploration costs will be shared two-thirds
Sunridge and one-third ENAMCO. In addition, ENAMCO is funding the next
approximately US$6 million to AMSCo for their portion of retroactive
contributions to the project.
Current activities on the project are summarized as follows:
Mining License:
The permitting process to receive a mining license for operation of the
Asmara Project was initiated last January with the submittal of the
Social and Environmental Impact Assessment (SEIA) report and in April
2014 of the Social and Environmental Management Plans (SEMP) to the
Ministry of Energy and Mines. Recently the Ministry appointed an
independent engineering company to initiate due diligence work on the
Asmara Project feasibility study and the SEIA. This work is expected to
be completed by September 2014 and therefore the mining license is
likely to be granted to AMSCo as expected in the 4th quarter
of 2014 or the 1st quarter of 2015.
Selection of Engineering, Procurement and Construction Management
(EPCM) Contractor:
Eligible candidates for an EPCM contractor for Phase 2 and 3 of the
Asmara mine were identified in late 2013. The tendering process will
proceed in September with the appointment by AMSCo of the selected
contractor scheduled for December 2014 with basic design work beginning
soon afterwards. EPCM functions for Phase 1 will be conducted by an
owner’s team with support from a consultant engineering group.
Environmental Monitoring and Social Engagement:
To comply with both international and national environmental
regulations, AMSCo has an ongoing program of environmental monitoring
that will continue to the initialization of production and beyond. In
addition, there is an ongoing program of engagement of local communities
that will be affected by the development of the Asmara Project.
Project Financing:
A project information memorandum was disseminated to a group of
potential debt financing lenders in late 2013. These groups included
commercial and development banks, export credit agencies and equipment
suppliers, commodity off-take companies and royalty and streaming
groups. At this stage several financing options are under consideration
including conventional senior secured project related debt facilities
and subordinated debt. Management of AMSCo will continue discussions
with potential lending groups during the third quarter of 2014 with
expectations of indicative term sheets to be delivered from the groups
by the end of 2014 for consideration.
Discussions with other parties:
Since publication of the results of the feasibility study in May 2013,
Sunridge has been approached by a number of companies interested in
acquiring all or part of Sunridge’s interest in the Asmara Project. The
Company continues discussions with a number of interested parties. There
can be no assurance that any transaction will occur, or as to the
timing, structure or terms of any transaction.
Summary of Asmara Project Feasibility Study:
The Asmara Project feasibility study (the “Study”) was completed in May
2013 and demonstrated that the mining of four of the six 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 initiate production in 2015 starting with
high-grade copper and gold direct shipping ore production from the
Debarwa deposit and heap-leaching of near surface gold, followed by
supergene copper production, then zinc and copper at a full production
rate of 4 million tonnes per year. At full production, the 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.
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
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 or of
debt financing, completion of negotiations with ENAMCO, and the
likelihood of receiving acquisition proposals. 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.