From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Thu Jun 04 2009 - 16:23:27 EDT
Sunridge Gold Announces Positive Preliminary Economic Assessment for the
Emba Derho Deposit
Thu Jun 4, 2009 11:12am EDT
VANCOUVER, BRITISH COLUMBIA, Jun 04 (MARKET WIRE) -- Sunridge Gold
Corp. (TSX VENTURE: SGC) ("Sunridge" or "the Company") is pleased to
announce the positive results of an independent Preliminary Economic
Assessment ("PEA") Study on the Company's Emba Derho copper-zinc-gold
volcanogenic massive sulphide (VMS) deposit located on the 100% owned
Asmara Project in central Eritrea. Emba Derho is one of four deposits
defined within the Asmara Project to date.
Highlights of the study completed by Wardrop, a Tetra Tech Company
("Wardrop") include:
- The currently estimated mineral resources provide for open-pit
mining at a rate of 4 million tonnes of ore per year for 10.4 years with
a possibility of mine life extension through either an expanded open pit
or underground production;
- A conventional flotation process plant would produce separate
copper and zinc concentrates containing annually approximately 55,000t
zinc, 25,000t copper, 20,000oz gold and 0.6moz silver;
- The base case internal rate of return (IRR) is 21.6% with 4 years
payback on an estimated initial capital cost of $331.8 million with
sustaining capital of $67.3 million;
- The pre-tax net present value (NPV) is estimated to be $203.9
millionat 10% discount rate;
- Total operating costs are estimated by Wardrop to be $21.19 per
tonne milled;
- The PEA is based entirely on resources in the Indicated category
using data from 256 diamond drill holes. Wardrop has estimated an
Indicated mineral resource in the Supergene and Primary zones of 58.97
million tonnes containing 990 million pounds of copper, 1,900 million
pounds of zinc, 485 thousand ounces of gold and 19.5 million ounces of
silver (as announced by Sunridge on September 17, 2008);
- Wardrop recommends the continuation of studies and moving the Emba
Derho project into the Pre-Feasibility stage. This includes further
drilling in the open-ended northwest zone of the Emba Derho mineralized
system and continued exploration elsewhere on the Medrizien exploration
license which may lead to the discovery of satellite deposits.
In addition, Wardrop cite a number of opportunities for improvement
and cost saving for the Emba Derho project. These include the following:
- The possible mining of the northwest zone of the Emba Derho
deposit. This zone consisting of 17.3 million tonnes at an average grade
of 0.96% Cu; 1.26% Zn; 0.18 g/t Au and 8.84 g/t Ag is not included in
the Wardrop base case scenario. The addition of this zone could increase
the mining rate from 4 to 6 million tonnes per year. The resources in
the northwest zone are included in the Sept. 17, 2008 indicated resource
estimate but are not included in the in-pit resource used by Wardrop for
the PEA.
- The mining plan for the Emba Derho PEA study does not consider the
upper oxide gold zone as an economic resource. This zone containing
94,000 ounces of gold (3.51 million tonnes at an average grade of 0.84
g/t gold) could be considered for future mining perhaps in conjunction
with the nearby Gupo gold deposit. The resources for the oxide zone are
included in the October 31, 2008 indicated resource estimate, but are
not included in the in-pit resources used by Wardrop for the PEA.
- Mining Emba Derho in conjunction with other known mineral deposits
on Sunridge's licenses;
- Possible use of the existing railway line to transport concentrate
to the port city of Massawa;
- Sharing costs of the port facility at Massawa with Nevsun's Bisha
project;
- Use of part of the open-pit for waste deposition;
- Improving the capital costs schedule;
- Further study of power options.
Michael Hopley, President and CEO of Sunridge Gold, states,
"Completing
the Emba Derho PEA is a significant achievement for the Company; the
study demonstrates that the deposit has the potential to become a large
base metals producer and a project that could be moved to production in
a
relatively short period of time given its proximity to excellent
infrastructure."
Emba Derho is located 12 kilometres away from the capital city of
Asmara and is accessed by paved roads. Local infrastructure is excellent
with power, water and ample space for open pit mining and related
operations. In addition the deep water port at Massawa on the Red Sea is
120 kilometers away by paved road and railway. The Asmara Project
contains three additional deposits with numerous high priority
exploration targets. The government is strongly supportive of the mining
industry in
the country and local community relations are good.
Mineral Resource Estimate
The resource estimate was completed by Wardrop using data from 256
diamond drill holes out of a total of 264 holes drilled to date. This
independent resource estimate for the Emba Derho deposit is dated
September 17, 2008 and only includes the Supergene and Primary Zones and
is the basis for the Emba Derho PEA study. It is summarized as follows:
------------------------------------------------------------------------
---
Tonnes
Supergene Zone - Indicated (Mt) Cu % Zn % Ag g/t Au
g/t
------------------------------------------------------------------------
---
Cu rich(1) 0.84 0.89 0.11 7.03
0.11
------------------------------------------------------------------------
---
Total Supergene Indicated 0.84 0.89 0.11 7.03
0.11
------------------------------------------------------------------------
---
Tonnes
Primary Zone - Indicated (Mt) Cu % Zn % Ag g/t Au
g/t
------------------------------------------------------------------------
---
Cu rich(1) 37.58 1.02 1.01 9.36
0.19
------------------------------------------------------------------------
---
Zn rich(2) 20.55 0.28 2.35 12.13
0.39
------------------------------------------------------------------------
---
Total Primary Indicated 58.13 0.76 1.48 10.34
0.26
------------------------------------------------------------------------
---
(1) The copper rich zone is those blocks having Cu values greater than
0.5% plus those blocks having Cu values greater than 0.5% and Zn values
greater than 1%.
(2) The zinc rich zone is defined as those blocks having Zn values
greater than 1%, but with Cu values less than 0.5%.
Financial Analysis
A base case preliminary economic evaluation of the Emba Derho
Project was prepared by Wardrop based on a pre-tax financial model. The
in-pit
resource is estimated at 41.6 million tonnes at an average grade of
0.68% Cu; 1.55% Zn; 0.33 g/t Au and 10.90 g/t Ag. For the projected 10.4
year
mine life the following pre-tax financial parameters were calculated
based on the London Metal Exchange (LME) five year historical average
metal prices as follows (all prices US$):
- 21.6% IRR
- 4.0 yrs payback on $331.8 m capital cost plus $67.3 m sustaining
capital
- $203.9 M NPV at 10% discount value
- Cu - $2.50/lb
- Zn - $1.00/lb
- Au - $650.00/oz
- Ag - $11.00/oz
Sensitivity of the project economics to alternate metal price
scenarios:
------------------------------------------------------------------------
---
SENSITIVITY TO METAL PRICES
------------------------------------------------------------------------
---
Base Case Prices 2 Year Average
5 Year Average Price Current
Price
------------------------------------------------------------------------
---
Pre-tax NPV @ 10% US $ 203.9 323.8
40.0
------------------------------------------------------------------------
---
IRR % 21.6 27.7
12.5
------------------------------------------------------------------------
---
Pre-tax Payback Years 4.0 3.2
5.6
------------------------------------------------------------------------
---
Mine Life Years 10.4 10.4
10.4
------------------------------------------------------------------------
---
------------------------------------------------------------------------
---
METAL PRICES
------------------------------------------------------------------------
---
Copper US $ lb 2.50 2.95
2.15
------------------------------------------------------------------------
---
Zinc US $ lb 1.00 0.95
0.70
------------------------------------------------------------------------
---
Gold US $ oz 650.00 835.00
975.00
------------------------------------------------------------------------
---
Silver US $ oz 11.00 14.00
15.00
------------------------------------------------------------------------
---
Note: Historical average metal prices sourced from the London Metal
Exchange.
The PEA is a preliminary economic study and there is no certainty
that the projected results of the PEA will be realized in actual
operations.
CORPORATE UPDATE:
As of May 2009, Sunridge has signed 7 Confidentiality Agreements
with
companies interested in the Emba Derho deposit and/or the whole Asmara
Project. Some of these parties have conducted site visits with a view to
a possible transaction with the Company on the property. Although the
discussions with certain of these parties are fairly advanced, they have
not resulted in a firm offer and there can be no assurance that any
agreements or transactions will result from these confidentiality
agreements or site visits.
About Sunridge
Sunridge Gold Corp. is a mineral exploration and development company
focused on the acquisition, exploration, discovery and development of
precious and base metal projects. The company is currently developing
base and precious metals deposits on the Asmara Project in Eritrea
including the completion of a positive Preliminary Economic Assessment
Study on the large Emba Derho Deposit. The Company has 62.4 million
shares outstanding, approximately $5.5 million (Canadian) in cash and
the
Company 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 <http://www.sunridgegold.com>
www.sunridgegold.com or call Don Halliday or
Greg Davis at the numbers listed below. NOTES:
1. Except where noted all dollars referred to in this news release
are US
dollars.
2. The Emba Derho resources, on which the PEA study was based, were
originally released on September 17, 2008 by the Company.
3. The Emba Derho deposit is layered into distinct metal zones as is
the
case in most of these types of VMS deposits and therefore mineral
resources for the upper oxide gold zone, the primary zinc-rich zone and
copper-rich zone are reported separately. The copper-rich primary
sulphide zone is defined as those blocks that have a grade of 0.5%
copper
or greater; the zinc-rich primary sulphide zone is defined as those
blocks that have an average grade of 1.0% zinc or greater. There is also
an "overlap" copper/zinc zone where blocks meet both criteria. In this
new resource estimate it was determined to include the overlap zone in
the copper-rich sulphide zone.
4. A Quality Assurance/Quality Control program is part of the
drilling
program on the Emba Derho deposits. This program includes chain of
custody protocols as well as systematic submittals of standards,
duplicates and blank samples into the flow of samples produced by the
drilling. The database archive used by Wardrop in the estimate of the
resources at Emba Derho was reviewed and verified by Paul Gribble, of
Wardrop, a Qualified Person as defined by NI 43-101.
5. A description of the geology, sampling procedures, and the
Company's
laboratory Quality Assurance / Quality Control procedures has been
described in previous NI 43-101 Technical Reports and will be updated
and
contained within the new Technical Report summarizing the PEA that will
be filed within 45 days of the date of this release. This report will
then be also available at <http://www.sedar.com> www.sedar.com.
6. Samples from the drilling were prepared at African Horn Testing
Services (Eritrea) and analyzed at Genalysis Laboratories (a NATA
registered laboratory) in Perth, Western Australia.
7. The results of the Wardrop resource estimate have been reviewed
by
Sunridge technical staff including Michael J. Hopley the Qualified
Person
for Sunridge. The Company believes that the Wardrop resource estimate
for
Emba Derho was conducted in a professional and competent manner. Mr.
Hopley is also the person responsible for preparation of the technical
information contained in this news release and is President and Chief
Executive Officer of Sunridge.
8. Mineral resources that are not Mineral Reserves do not have
economic
viability.
SUNRIDGE GOLD CORP.
Michael Hopley, President and Chief Executive Officer
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.
Contacts:
Sunridge Gold Corp.
Don Halliday
Executive Vice President
604-899-1505 (direct)
<mailto:donh@sunridgegold.com> donh@sunridgegold.com
Sunridge Gold Corp.
Greg Davis
VP Business Development
604-688-1263 (direct)
<mailto:greg@sunridgegold.com> greg@sunridgegold.com
<http://www.sunridgegold.com> www.sunridgegold.com
<http://www.marketwire.com/press-release/Sunridge-Gold-Corp-TSX-VENTURE-
SGC-999607.html>
http://www.marketwire.com/press-release/Sunridge-Gold-Corp-TSX-VENTURE-S
GC-999607.html
<http://www.reuters.com/article/pressRelease/idUS159780+04-Jun-2009+MW20
090604>
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