Sunridge Gold unveils Eritrea, Madagascar drilling updates

Sunridge Gold (CVE:SGC)(OTCQX:SGCNF) Tuesday announced assay results from its drilling programs at the Gupo gold deposit in Eritrea, East Africa and from the Besakoa project in Madagascar.
The mineral exploration and development company said assay results from an additional 20 drill holes from a recently completed reverse circulation drill program at the Gupo gold deposit generally confirmed the location and grade of gold mineralization close to previous holes, down to depths of approximately 20 to 130 metres in the northern and central part of the deposit.
Among the highlights, drill hole GG-084-R encountered 4.13 grams per tonne (g/t) gold over 12 metres and 5.19 g/t gold over 7 metres; drill hole GG-096-R returned 6.09 g/t gold over 30 metres; drill hole GG-113-R intersected 3.66 g/t gold over 13 metres and drill hole GG-114-R encountered 6.20 g/t gold over 19 metres.
Sunridge's drilling program on Asmara North in Eritrea, which includes the Emba Derho, Adi Nefas, and Gupo Gold deposits, consists of 90 drill holes totaling approximately 7,000 metres.
The program was designed to expand and upgrade the current inferred resource at Gupo to the measured and indicated categories as part of the pre-feasibility study on Asmara North.
In addition, drill hole GG-114-R significantly extended strong gold mineralization (19 metres averaging 6.20 g/t gold) to approximately 130 metres from surface. Additional results are expected in about two weeks.
Gold mineralization at Gupo extends over a strike length of approximately 1.6 kilometres and is associated with stockwork quartz veins and a sericite alteration halo controlled by a shear zone 10 to 20 metres in width, the company said.
The resource is close to surface, and drilling has shown mineralization to extend at least to 130 metres vertical depth.
The current inferred resource estimate for Gupo shows a resource of 1.97 million tonnes grading 2.99 g/t or 189,000 ounces.
In a research note, Ocean Equities analyst Christopher Welch said the latest results support an upgraded resource when the prefeasability study (PFS) on the Northern Asmara assets are due in the latter part of the first quarter of 2012.
Welch said the PFS is one of two very important milestones for Sunridge.
A bankable feasibility study on the Debarwa deposit in Eritrea is also due in the early part of the first quarter of next year. With a DSO zone - an area of extremely high grade copper with gold - of 16 percent copper, Debarwa will be able to be brought into production quickly.
Sunridge has recently completed 24 shallow reverse-circulation drill holes targeting parts of the surface gold oxide zone that are not included in the current resource at the Debarwa copper-gold deposit. Results are expected in approximately six to eight weeks.
Ocean Equities' Welch said: "The company has been discounted recently with the uncertainty surrounding the UN sanctions. With no restriction on investment in the mining industry we expect Sunridge's share price to rally as it approaches completion of the pending feasibility studies."
The UN Security Council on Monday expanded sanctions against Eritrea for continuing to provide support to Islamist militants in neighbouring Somalia.
Welch said, however, that the feasibility studies will produce financial metrics and enable appropriate values to be assigned to Sunridge's portfolio of assets.
Sunridge also announced Tuesday assay results from its recent 5,000 metre diamond drill program on the Besakoa project in Madagascar.
The drill program tested a number of volcanogenic-massive-sulphide style targets which were defined using geophysical and soil geochemical surveys, geological and structural mapping and gossan prospecting.
Results were generally disappointing, Sunridge said, although several of the holes intercepted semi-massive sulphide mineralization and had anomalous base and precious metal values.
Among the highlights, Sunridge said that hole BSK-01 encountered 0.43 g/t gold and 16 g/t silver over 15.31 metres, while hole BSK-32 intersected 0.34 g/t gold and 2.50 g/t silver over three metres.
Sunridge shares were flat at $0.34 Tuesday morning.