Ocean Equities has recently taken a closer look at Sunridge Gold after the gold explorer completed its initial resource estimate for the Adi Rassi copper-gold deposit - the fifth gold deposit defined on Sunridge's Asmara project in Eritrea.
The new resource totals 15.77 million tonnes at 0.54% copper and 0.33 grams per tonne (g/t) gold containing 85,158 tonnes of copper and 167,000 ounces of gold in the inferred category.
Ocean Equities analyst Adam Lucas says that the initial mineral resource at Adi Rassi was based on just 22 drill holes, and it is likely that further drilling will "significantly expand and upgrade the mineralization".
"The resource estimate at Adi Rassi confirms the extensive potential of the Asmara Project area being the 5th deposit to be defined at the project.
"The fact that the resource estimate was based on just 22 diamond drill holes suggests that further drilling could upgrade the resource category and expand the resource."
Indeed, further expansion drilling at Adi Rassi is planned next year. The mineralization at the fifth deposit is associated with a major shear zone, according to the company, which trends northeast for more than 3 kilometres.
Adi Rassi, which is less than 10 km from the Debarwa deposit and has paved road access, is the fifth mineral resource defined by Sunridge on the Asmara project.
In May, the company released a prefeasibility study on the other four deposits - Adi Nefas, Emba Derho, Gupo and Debarwa - that analyzed the optimum economic scenario to construct a single centralized processing plant near the Emba Derho deposit.
The economic analysis, using 5-year average metal prices and a 10 per cent discount rate, showed the project to have a pre-tax net present value of $555 million and an internal rate of return of 27 per cent.
A feasibility study is now underway for the project, and is slated to wrap up in April of next year. Based on new metallurgical testwork, the feasibility study will now include early mining of the direct shipping ore (DSO) from Debarwa, and early heap-leaching of the surface gold material from the project, Sunridge said, allowing more revenue to be generated earlier.
As a result, cash flow is expected a year earlier than presented in the prefeasibility study, now anticipated in 2015.
Initial capital costs are also anticipated to be lower due to the new operating scenarios.
"Alongside these improvements we also expect Sunridge to detail how negotiations with the Eritrean National Mining Corporation (‘ENAMCO’) for the purchase of a 30% working interest in the project are progressing," Lucas concludes.
Aside from the Asmara project, Sunridge also has exploration properties in Madagascar.
The company recently closed a $10.8 million financing, which allows it to maintain work on the feasibility study at "full speed" and complete the work on schedule, it said last month.
Sunridge shares rose more than 5 per cent Wednesday, to trade at around 20 cents.
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