http://www.istockanalyst.com/business/news/6927478/sunridge-gold-on-track-to-start-production-in-2015-on-the-asmara-project-eritrea
Sunridge Gold on Track to Start Production in 2015 on the Asmara Project,
Eritrea
Thursday, July 17, 2014 7:00 AM
Sunridge Gold on Track to Start Production in 2015 on the Asmara Project,
Eritrea
Sunridge Gold Corp. (the "Company" or "Sunridge") (SGC: TSX.V/SGCNF: OTCQX)
is pleased to report that the recent signing of the shareholder agreement
with the Eritrean National Mining Corporation ("ENAMCO") (see June 27, 2014
news release) has accelerated activities on the Asmara copper-zinc-gold
project (the "Asmara Project") so that subject to permitting and funding
the Asmara Project is on track to commence production in 2015. The Asmara
Project is to be held and operated by the Asmara Mining Share Company
("AMSCo") and will be owned 60% by Sunridge, 40% by ENAMCO.
The mining plan in the Asmara Project feasibility study completed in 2013
outlined a 3 phase start up designed to reduce initial capital costs. In *Phase
1A*, the high-grade copper (direct shipping ore, "DSO") will be mined from
the Debarwa deposit by open-pit methods, crushed and loaded into containers
and transported 120 km to the port facility at Massawa for shipping and
sale to a smelter. This DSO zone contains 116,000 tonnes of high-grade
material with an average grade of 15.6% copper, 2.96 g/t gold, and 76.8 g/t
silver. In order to access the DSO zone, which is found about 30 meters
from surface, the enriched gold oxide cap at surface will be mined and this
material along with the similar gold cap from Emba Derho will make up *Phase
1B*, which is the open-pit mining of the gold caps from both deposits with
recovery of the gold by heap-leaching methods. Providing that the mining
license is issued by the government to AMSCo as expected in late 2014 or
early 2015, and funding is in place, then Phase 1 production is on track to
start in the 4th quarter of 2015.
Capital and operating costs for Phase 1 are currently being reviewed in
detail as management has identified opportunities to potentially lower
these costs and further enhance the economics. Phase *1A* capital costs are
expected to be significantly reduced than those outlined in the feasibility
study and the initial revenue from Phase 1A (DSO) will fund the
construction of Phase 1B (gold heap-leaching) facilities.
*Summary of Shareholder Agreement between Sunridge and ENAMCO*:
Sunridge announced on June 27, 2014, that Sunridge and ENAMCO have executed
a shareholders' agreement (the "Shareholders' Agreement") for the AMSCo,
the operating entity which will own and operate the Asmara Project. The
first US$2 million of the US$18.3 million purchase price for ENAMCO's 30%
interest in AMSCo has now been received by Sunridge and the remainder will
follow the schedule outlined in the June 27, 2014 news release.
AMSCo will be owned 60% by Sunridge and 40% by ENAMCO (30% participating
and 10% free carried interest) and will have a board of directors of five,
comprising three from Sunridge and two from ENAMCO. All future project
development or exploration costs will be shared two-thirds Sunridge and
one-third ENAMCO. In addition, ENAMCO is funding the next approximately
US$6 million to AMSCo for their portion of retroactive contributions to the
project.
Current activities on the project are summarized as follows:
*Mining License:*
The permitting process to receive a mining license for operation of the
Asmara Project was initiated last January with the submittal of the Social
and Environmental Impact Assessment (SEIA) report and in April 2014 of the
Social and Environmental Management Plans (SEMP) to the Ministry of Energy
and Mines. Recently the Ministry appointed an independent engineering
company to initiate due diligence work on the Asmara Project feasibility
study and the SEIA. This work is expected to be completed by September 2014
and therefore the mining license is likely to be granted to AMSCo as
expected in the 4th quarter of 2014 or the 1st quarter of 2015.
*Selection of Engineering, Procurement and Construction Management (EPCM)
Contractor:*
Eligible candidates for an EPCM contractor for Phase 2 and 3 of the Asmara
mine were identified in late 2013. The tendering process will proceed in
September with the appointment by AMSCo of the selected contractor
scheduled for December 2014 with basic design work beginning soon
afterwards. EPCM functions for Phase 1 will be conducted by an owner's team
with support from a consultant engineering group.
*Environmental Monitoring and Social Engagement:*
To comply with both international and national environmental regulations,
AMSCo has an ongoing program of environmental monitoring that will continue
to the initialization of production and beyond. In addition, there is an
ongoing program of engagement of local communities that will be affected by
the development of the Asmara Project.
*Project Financing:*
A project information memorandum was disseminated to a group of potential
debt financing lenders in late 2013. These groups included commercial and
development banks, export credit agencies and equipment suppliers,
commodity off-take companies and royalty and streaming groups. At this
stage several financing options are under consideration including
conventional senior secured project related debt facilities and
subordinated debt. Management of AMSCo will continue discussions with
potential lending groups during the third quarter of 2014 with expectations
of indicative term sheets to be delivered from the groups by the end of
2014 for consideration.
*Discussions with other parties:*
Since publication of the results of the feasibility study in May 2013,
Sunridge has been approached by a number of companies interested in
acquiring all or part of Sunridge's interest in the Asmara Project. The
Company continues discussions with a number of interested parties. There
can be no assurance that any transaction will occur, or as to the timing,
structure or terms of any transaction.
*Summary of Asmara Project Feasibility Study:*
The Asmara Project feasibility study (the "Study") was completed in May
2013 and demonstrated that the mining of four of the six deposits that make
up the Asmara Project (Emba Derho, Adi Nefas, Gupo Gold and Debarwa) and
processing of the ore at a central location near the large Emba Derho
deposit is economically robust with a pre-tax net present value ("NPV") of
$692 million (using a 10% discount rate) and with a pre-tax internal rate
of return ("IRR") of 34%. The post-tax NPV is $428 million with an IRR of
27%. The Study outlines a three-phase start-up mining operation which would
initiate production in 2015 starting with high-grade copper and gold direct
shipping ore production from the Debarwa deposit and heap-leaching of near
surface gold, followed by supergene copper production, then zinc and copper
at a full production rate of 4 million tonnes per year. At full production,
the mine will produce an average annual production of 65 million lbs
(29,000 t) copper, 184 million lbs. (83,000 t) zinc, 42,000 oz gold, and 1
million oz silver over the first 8 years. The life of mine is 17 years.
Michael Hopley, President and CEO of Sunridge Gold Corp., is the Company's
Qualified Person responsible for the contents of this press release and has
reviewed the information in the release and confirmed that it is consistent
with that provided by the independent Qualified Person responsible for the
Study.
*ABOUT SUNRIDGE:*
Sunridge is a mineral exploration and development company focused on the
acquisition, exploration, discovery and development of base and precious
metal projects on the Asmara Project in Eritrea. Sunridge currently has
approximately 210 million shares outstanding and trades on the TSX Venture
Exchange under the symbol SGC. For additional information on the Company
and its projects please view the slide show on our website at
www.sunridgegold.com
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http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.sunridgegold.com&esheet=50906965&newsitemid=20140717005306&lan=en-US&anchor=www.sunridgegold.com&index=1&md5=358d3a1bc334bf68756d5139dd38f81c>
or call Greg Davis at the number listed below.
*SUNRIDGE GOLD CORP.*
*"Michael Hopley"* *For further information contact:* Michael Hopley,
President and Chief Executive Officer
Greg Davis, VP Business Development
Email: greg_at_sunridgegold.com
Tel: 604-688-1263 (direct)
*Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.*
*This news release contains forward-looking statements that are based on
the Company's current expectations and estimates. Forward-looking
statements are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate", "suggest",
"indicate" and other similar words or statements that certain events or
conditions "may" or "will" occur. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that could cause
actual events or results to differ materially from estimated or anticipated
events or results implied or expressed in such forward-looking
statements. Forward looking statements may include the timing and success
of any application for a mining license or of debt financing, completion of
negotiations with ENAMCO, and the likelihood of receiving acquisition
proposals.* *Risk and uncertain factors include, among others: the actual
results of current exploration activities; conclusions of economic
evaluations; changes in project parameters as plans to continue to be
refined; possible variations in ore grade or recovery rates; accidents,
labour disputes and other risks of the mining industry; delays in obtaining
governmental approvals, a mining license, or debt financing, uncertainties
in negotiating commercial arrangements with government entities; and
fluctuations in metal prices.* *There may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended.* *Any
forward-looking statement speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward-looking statement,
whether as a result of new information, future events or results or
otherwise. Forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such
statements due to the inherent uncertainty therein.*
Copyright Business Wire 2014
(Source: Business Wire )
(Source: Quotemedia)
Received on Thu Jul 17 2014 - 08:16:44 EDT