Sunridge Gold Corp. (CVE:SGC) (OTCQX:SGCNF) shares rose sharply on Thursday after the junior explorer reported what it called "significant gold mineralization" in the oxide gold cap of its Kodadu target, which forms part of its Asmara project in Eritrea.
The company reported the results from all 21 drill holes of a recently completed reverse circulation drilling campaign. Along with the signficant gold find in the oxide gold cap of the Kodadu gossan, Sunridge said it also defined more gold in a nearby shear zone.
Notable holes include 51 metres at 1.71 grams per tonne (g/t) gold in hole KD-002-R, and 31 metres of 1.77 g/t gold in hole KD-003-R.
The results represent a new gold discovery for the company as previous drilling in the area targeted deeper volcanogenic-massive-sulphide (VMS) base metal mineralization.
The Canadian listed junior company has now commissioned Fladgate Exploration Consulting to complete an initial resource estimate on the gold oxide zones at Kodadu.
Sunridge's aim is to rapidly define a resource at the target that could be mined as feed to a central gold plant near its large Emba Derho deposit - one of the four established deposits of the Asmara project. Kodadu is located around 25 kilometres south of Emba.
"The drill program at Kodadu has successfully intercepted significant near surface gold mineralization and has provided enough information to begin work on an initial resource estimate" said president and CEO, Michael Hopley.
"This drilling program has again demonstrated the prolific potential of the Asmara project."
As of now, the Asmara project consists of the Emba Derho, Debarwa and Adi Nefas copper-zinc-gold and silver deposits and the Gupo gold deposit, as well as the fifth defined deposit, Adi Rassi, where the company late last year announced an initial resource estimate.
The results of a preliminary feasibility study at the Asmara project last May that considered four deposits, excluding Kodadu and Adi Rassi, being processed at a central mill, showed a pre-tax net present value of $555 million at a 10 per cent discount rate. The IRR was 27 percent, with an initial capital cost pegged at $489 million.
Sunridge is now working on finishing a feasibility study on the Asmara project, on track for April this year, after which the application for a mining license and permitting will follow, along with the social and environmental impact assessment.
At Kodadu, the company said that several gossans have been found through surface mapping that trend north-northeast for over a 1.2 kilometre strike length, with an average width of about 15 metres.
Sunridge shares popped over 8 percent this morning, to trade at 20 cents.
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