Ocean Equities says that Sunridge Gold's (CVE:SGC) (OTCQX:SGCNF) drilling at the Kodadu target, part of the Asmara project in Eritrea, has the potential to add value to the property and shows the area remains "highly prospective for new gold and base metal targets".
The junior explorer reported yesterday what it called "significant gold mineralization" in the oxide gold cap of its Kodadu target.
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 included 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.
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 established deposits of the Asmara project. Kodadu is located around 25 kilometres south of Emba.
"The [Kodadu] drill program has successfully intercepted significant near surface gold mineralization and has provided sufficient information for the company to begin work on an initial resource estimate, demonstrating the potential of the Asmara Project," said Ocean Equities in its research note on Friday.
Indeed, the Canadian listed junior company says it has now commissioned Fladgate Exploration Consulting to complete an initial resource estimate on the gold oxide zones at Kodadu. Once completed, Kodadu will be the sixth resource on the Asmara project.
Sunridge also continues to proceed with its scheduled plans for 2013, including the conclusion of negotiations with ENAMCO regarding the purchase of an additional 30% of the Asmara project.
The main focus, however, will be the work 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.
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.
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