Sunridge Gold to raise up to $10 mln for Asmara project

Vancouver-based Sunridge Gold Corp (CVE:SGC) (OTCQX:SGCNF) says it plans to raise up to $10 million through a non-brokered private placement financing. 

The offering is planned to consist of up to 45.45 million units at 22 cents each, with every unit holding one common share and one half of one share purchase warrant. 

Each whole warrant allows the holder to buy one additional share of the company at 35 cents for a period of five years from the closing date.

The mineral explorer said late Thursday it reserves the right to increase the size of the placement or modify the type or price of the units. 

The proceeds of the financing, which remains subject to regulatory approval, will be used to fund Sunridge's work programs at the Asmara project in Eritrea, as well as for general corporate purposes, it said. 

The Asmara project consists of four mineral deposits, the Emba Derho, Debarwa and Adi Nefas copper-zinc-gold and silver deposits, and the Gupo gold deposit, all located within 40 kilometres of the capital city of Asmara. 

The results of a preliminary feasibility study that considered all deposits being processed at a central mill was announced in May, and showed production of 365,000 tonnes of copper, 812,000 tonnes of zinc, 415,000 ounces of gold and 11 million ounces of silver over a 15.25 year mine life. 

The report also projected a pre-tax net present value of $555 million at a 10 per cent discount rate and an initial capital cost of $489 million.

Sunridge is now completing a feasibility study on the project, which is planned for completion in 2013, subject to financing. Application for a mining license and permitting will follow this study.

In late August, Sunridge said that the Eritrean government planned to acquire a 30 per cent paid interest in the Asmara project. The 30 per cent interest owned by the Eritrean National Mining Corp (ENAMCO) would be in addition to the government's existing right to get a 10 per cent non-assessable stake that will be carried to production by participating partners. 

The terms of the acquisition had not yet been established at the time, Sunridge said, and would be determined through negotiations. 

The mineral exploration and development company also has exploration properties in Madagascar.