Ocean Equities reacted positively to the news that junior explorer Sunridge Gold (CVE:SGC)(OTCQX:SGCNF) increased resources within its Asmara project in Eritrea on Monday.
Monday, Sunridge received a new independent resource estimate, showing a significant increase in size for the Emba Derho volcanogenic massive sulphide (VMS) deposit.
Sunridge said that measured and indicated resources at Emba Derho now stand at 70.0 million tonnes, with an additional 15 million tonnes in the inferred category.
The deposits's copper-rich zone has 49.8 million tonnes at an average grade of 0.83 percent copper and 0.93 percent zinc, and the zinc-rich zone has 16.8 million tonnes at an average grade of 2.80 percent zinc and 0.31 grams per tonne (g/t) gold, according to the research estimate.
Total contained metals in the measured and indicated categories are now estimated at 1.00 billion pounds of copper, 2.1 billion pounds of zinc, 506,000 ounces of gold and 18.6 million ounces of silver.
The new resource estimate was completed by Snowden Mining Industry Consultants as part of the company's ongoing prefeasibility study on the Asmara North deposits, which include Emba Derho, the Adi Nefas zinc-gold-copper VMS deposit and the Gupo gold deposit.
The prefeasibility study is being conducted by Snowden and GBM Minerals Engineering Consultants, and is scheduled for completion in April 2012.
In a research note Monday, Ocean Equities said: "The results today are encouraging for Sunridge. By increasing the overall size of the resource and better defining the ore body the company will have a higher level of certainty in the conversion of resource into reserve as it progresses through the next step of a full feasibility study at Emba Derho."
Excluding the NW zone, Sunridge has grown the size of the measured and indicated Emba Derho resource "by 39 percent", the capital markets firm said.
Ocean Equities added that Emba Derho is set to become "the processing hub of the Asmara North assets", with current optimization studies analyzing the blending of material from Emba Derho, Adi Nefas, Gupo and Debarwa in the prefeasability study.
Looking ahead, in addition to the release of the pre-feasability study, Sunridge is also expecting to release the results of a feasibility study on the Debarwa VMS project.
Released to the market will be an appropriate valuation of the Debarwa project including a production schedule with initial direct shipping ore copper production to ensure quick ramp up and access to early cashflow, Ocean Equities said.
Sunridge Gold 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. It also holds exploration properties in Madagascar.