Progress is continuing at high speed on Sunridge Gold Corp’s (CVE:SGC) Asmara project in Eritrea, with the company announcing the next stage in the process towards production - that is, the independent debt financing due diligence review.
The Vancouver-based explorer, very much focused on its flagship gold-copper-zinc Asmara project in the eastern-African nation of Eritrea, announced Monday its selection of international mining industry consulting company Micon International Limited to complete the review.
In its review, Micon is to cover all aspects of the project, including mineral resources and mineral reserves, metallurgy, processing plant and infrastructure, mine design, economic analysis, and environmental and social engagement programs. The company’s team, which has already visited the site, will conduct its review of the feasibility study during the third quarter of this year.
"Micon's due diligence review of the Asmara Project for the banks is an important step towards being able to debt finance the Asmara Mine into production," said president and CEO Michael Hopley, in a company statement released with the announcement.
The announcement signals another step on the journey towards production for the project, which as recently as last month was the subject of an independent feasibility study by lead engineer SENET that succeeded in bringing the schedule for commencement of initial production forward by almost a year.
That study, in which SENET outlined a three-phase staged start-up mining plan that would initiate production in 2015 starting with a gold cap and moving into high grade copper then zinc, resulted in the reduction of the planned initial capital requirements by more than $130 million in comparison with the prefeasibility study published in May 2012.
Indeed, the combination of earlier than expected production and cash flow, combined with capital cost reductions, lowered the project’s initial capex requirements from $489 million to $354 million - good news for investors in a challenging market.
The study also demonstrated that the mining of all four advanced deposits that make up the Asmara project - Emba Derho, Adi Nefas, Gupo Gold and Debarwa - and processing of the ore near the large Emba Derho deposit is economically robust, with a net present value (NPV) of $692 million at a 10 per cent discount rate.
The week following that announcement brought more good news with the mining junior releasing details of the sixth NI43-101 and JORC compliant mineral resource estimate on the property.
In addition, in another aspect of the project geared to reassure investors, once the mining license for the project is granted, the government of Eritrea will have a 10 per cent carried interest, and ENAMCO, the Eritrean National Mining Corporation, will be purchasing an additional 30 per cent of the project, thereby becoming responsible for one third of all capital and operating costs at the mine going forward.
Endeavour Financial Limited, already familiar with advising companies working in Eritrea via their work with Nevsun ResourcesLimited, is to lead the process on the debt financing due diligence review until the lender group is formed.
Shares in Sunridge Gold were trading at 16 cents per share at close of the trading day immediately prior to the announcement.
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