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Wednesday, 4 September 2013
Sunridge Gold makes great strides at Asmara project
Sunridge Gold (CVE:SGC) is moving ever closer to production on its Asmara project with the Vancouver-based exploration and development company, very much focused on its flagship copper-zinc-gold-silver project in the eastern-African nation of Eritrea, making progress on all fronts.
The four advanced deposits that make up the Asmara project (Emba Derho, Adi Nefas, Gupo Gold and Debarwa) have already been the subject of a feasibility study earlier in the year that showed that mining at the project and processing of the ore near the large Emba Derho deposit is economically robust.
In recent days, the company has undertaken a social and environmental impact assessment due for completion next month, in order to make application to the government for a mining license.
In addition to these efforts, negotiations are underway with the Eritrean National Mining Corporation (ENAMCO) to determine the price they will pay to purchase 30 per cent of the project from Sunridge.
Discussions with potential debt financing lenders have also begun, as has an independent due diligence review -- the step in advance of signing the financing agreement, when potential investors examine the project in detail before deciding to fund work on the property. The review, which is being conducted by Micon International Limited, commenced in June and is due for completion before the end of the calendar year.
Also in process is the selection of an engineering group to undertake detailed engineering work; new key employees have been hired to start work on the project before the end of this calendar year, while advanced talks with other potential employees are in progress.
Meanwhile, the company continues exploration activities on its "pipeline deposits" on the Asmara project -- recently, initial resource estimates were announced for two new deposits: Adi Rassi, a large copper-gold deposit, and Kodadu, a surface gold deposit.
Unsurprisingly, Sunridge said it is courting interest from major companies with discussions currently underway with a number of interested parties that could lead to a potential acquisition of either the company itself or some or all of the Asmara project.
The independent feasibility study conducted on the project in May by lead engineer SENET demonstrated that the mining of all four advanced deposits that make up the Asmara project show a net present value (NPV) of $443 million after tax at an 8 per cent discount rate.
That study, in which SENET outlined a three-phase staged start-up mining plan that would initiate production in 2015 starting with a near-surface oxide 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, and succeeded in bringing the schedule for the start of initial production forward by almost a year.
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 project, which has a mine life of more than 15 years, is pegged to produce a total of more than 841 million pounds of copper and 1.87 billion pounds of zinc, as well as gold and silver. Average operating costs over the life of the mine are estimated at just under $30 a tonne.
Shares in Sunridge closed up higher on the TSX-Venture Exchange the day before the production update, adding half a penny to close at 21 cents.