Press release-Sunridge Gold Announces Positive Pre-Feasibility Study for the
Asmara North Project, Eritrea
May 2, 2012, 7:31 a.m. EDT
http://www.sunridgegold.com/s/PressReleases.asp?ReportID=522503
VANCOUVER, BRITISH COLUMBIA, May 02, 2012 (MARKETWIRE via COMTEX) --
Sunridge Gold Corp.
<
http://www.marketwatch.com/investing/stock/SGC?countrycode=CA&link=MW_story
_quote> CA:SGC -6.25% (otcqx:SGCNF) is pleased to announce the completion
and positive results of an independent pre-feasibility study (the "Study")
by lead engineer Snowden Mining Industry Consultants Inc. ("Snowden") for
its 100% owned Asmara North project in Eritrea. The Study has concluded that
operating all four deposits of the Asmara Project (Emba Derho, Adi Nefas,
Gupo Gold and Debarwa) as an integrated operation with ore being processed
at a single central mill is technically feasible and is the optimum economic
situation (see Project Map:
http://media3.marketwire.com/docs/sgc52.pdf ).
The Study recommends that the project be advanced to a feasibility study.
Base Case Highlights:
-- Net Present Value ("NPV") of $555 million at a 10% discount
(pre-tax
base case) (NPV _at_ 0% discount - $1,642 million)
-- Internal rate of return (IRR) - 27%
-- Payback - 3.5 years
-- Base Case metal prices used - US$3.28/lb copper, US$0.99/lb
zinc,
US$1,111/oz gold, US$21.00/oz silver
-- Initial capital cost estimate - $489 million including a
contingency and
owners costs
-- On site operating costs - $25.78 per tonne average through life
of mine
-- Average annual metal production -
-- 56.9 million pounds (25,900 tonnes) of copper
-- 136.0 million pounds (61,800 tonnes) of zinc
-- 26,000 ounce of gold
-- 695,000 ounces of silver
-- Total metal production -
-- 804 million pounds (365,000 tonnes) of copper
-- 1.789 million pounds (812,000 tonnes) of zinc
-- 415,000 ounces of gold
-- 11 million ounces of silver
-- Life of Mine - 15.25 years
Michael Hopley, President and CEO of Sunridge Gold, states, "We are
very pleased with the results of the prefeasibility study - the outcomes
have certainly exceeded our expectations and provide significant shareholder
value. We are particularly pleased that the Study has outlined an operating
scenario in which all four deposits of the Asmara Project are developed in
an integrated way with all ore being processed in a single centralized mill
near the Emba Derho deposit. This is a major step forward for the project.
We have started work on the recommended feasibility study."
Mining and Production
The Study has concluded that mining and processing all four deposits of the
Asmara Project (Emba Derho, Adi Nefas, Gupo Gold and Debarwa) into a single
integrated operation with ore being processed at a single central mill near
the Emba Derho Deposit is the optimum economic situation and is technically
feasible. The Emba Derho, Debarwa and Gupo deposits will be mined by
open-pit methods and the Adi Nefas deposit by underground mining methods.
Management estimates that initial production at Asmara North will commence
in the first quarter of 2016. This allows time for completion of the
feasibility study, permitting, financing and construction.
During the 13.25 peak years of base metal production (Phase II, beginning in
Year 2 through Year 15) the Asmara North mine is projected to produce an
average of 57.3 million pounds (26,000 tonnes) of copper, 143.3 million
pounds (65,000 tonnes) of zinc, 24,000 ounces of gold and 787,000 ounces of
silver per year. Production is divided into three phases as follows:
Phase I (Year 0 - Year 1.25)
-- Mine and process 2.4 million tonnes of copper supergene ore from
Debarwa
and Emba Derho at a rate of 2 million tonnes per year for 1.25
years
-- Phase I recoveries - 84% copper, 52% gold, 46% silver
-- Copper concentrate - 22% copper, 3.7 g/t gold, 101 g/t silver
-- Phase I operating costs average $54.77 per tonne (includes
mining,
process, G&A)
Phase II (Year 1.25 - Year 14.5)
-- Mine and process 53 million tonnes of primary copper and zinc
ore from
Emba Derho, Debarwa, and Adi Nefas at a rate of 4 million tonnes
per
year for 13.25 years
-- Final Waste/Ore ratios - 2.4:1 at Emba Derho and 9.0:1 at
Debarwa
-- Adi Nefas to be mined using underground long hole bench retreat
with
waste fill method ranging between 140,000 and 460,000 tonnes per
year
for a total of 1.675 million tonnes mined over 6 years and
blended with
ore from Emba Derho
-- Adi Nefas average mining cost - $80/tonne
-- Phase II recoveries average 84% copper, 84% zinc, 48% gold, 45%
silver
-- Copper concentrate average - 25.5% copper, 9.4 g/t gold, 307 g/t
silver
-- Zinc concentrate average- 60.5% zinc
-- Phase II operating costs average $23.72 / tonne (includes
mining,
process, G&A)
Phase III (Year 14.5 - Year 15.25)
-- Mine and process by Carbon in Pulp (CIP) Gold plant at Emba
Derho 1.61
million tonnes of gold ore from Gupo Gold and process stockpiled
gold
caps from Emba Derho and Debarwa.
-- Gupo waste/ore ratio - 3.25:1
-- Phase III gold recoveries average 81% gold, 75% silver
-- Phase III operating costs average $49.39 per tonne (includes
mining,
process, G&A)
Table 1: Production Schedule
---------------------------------------------------------------------------
Phase I Phase II
Phase III
------------------------------------------------
Year 0 - Year 1.25 - Year
14.5 -
Year 1.25 Year 14.5
Year 15.25
------------------------------------------------
Million tonnes per year 2 4
2
Million pounds copper 97.9 57.3
per year (in concentrate) (in concentrate)
-
Million pounds zinc per 143.2
year - (in concentrate)
-
24,000 24,000
46,000
Ounces of gold per year (in concentrate) (in concentrate)
(in dore)
Ounces of silver per 620,000 787,000
328,000
year (in concentrate) (in concentrate)
(in dore)
---------------------------------------------------------------------------
Metallurgy and Processing
All ore from the different deposits will be milled and processed in a single
plant located at the Emba Derho deposit. Processing of the three ore types
(copper supergene, primary copper and zinc and gold oxide) will utilize a
common crushing and ball milling circuit which includes high pressure
grinding rolls (HPGR) and three different processing circuits. The initial
Phase I plant will process supergene ore at a nominal two million tonnes per
annum rate by a conventional flotation process to recover copper and
byproduct gold as a copper concentrate for sale to smelters. This is
followed by Phase II processing of primary ores at a nominal four million
tonnes per annum rate producing copper, zinc, and byproduct gold and silver
as concentrates for direct sale to smelters. The Phase III plant reduces to
a nominal two million tonnes per annum rate to extract gold and silver from
oxide ore using conventional cyanide leaching and recovery by the carbon in
pulp process to produce gold and silver dore. The tailing systems will be
common for all three ore types.
The first year of production produces copper concentrate with gold and
silver credits, continuing until Year 14 and the production of zinc
concentrate will begin in Year 1 through Year 14. Gold and silver extraction
to a dore product occurs in the last half of Year 14 and completes in Year
15.
Financial Analysis (all $ equals US dollars)
The base case uses constant metal prices of $3.28/lb copper, $0.99/lb zinc,
$1,111/oz gold and $21.00/oz silver, which are derived from the 5 year
average as of April 25, 2012.
Table 2: Sensitivity to Metal Prices
---------------------------------------------------------------------------
Base Case
Current Metal
Prices 3 year Average
Prices
5 year Average Metal Prices April
25, 2012
--------------------------------------------
NPV _at_ 10% discount (Pretax) $555 million $648 million $788
million
IRR _at_ 10% 27% 29%
33%
NPV _at_ 0% discount (Pretax) $1,642 million $1,839 million $2,135
million
Payback 3.5 years 3.2 years
2.9 years
Mine Life 15.25 years 15.25 years
15.25 years
Metal Prices
Copper $3.28/lb $3.47/lb
$3.75/lb
Zinc $0.99/lb $0.99/lb
$0.90/lb
Gold $1,111/oz $1,335/oz
$1,629/oz
Silver $21/oz $25/oz
$30.18/oz
---------------------------------------------------------------------------
Operating Costs
On site operating costs average $25.78 per tonne through life of mine.
Table 3: Average Operating Costs
---------------------------------------------------------------------------
Phase I Phase II
Phase III
-------------------------------------------
Year 0 - Year Year 1.25 - Year
14.5 -
1.25 Year 14.5
Year 15.25
-------------------------------------------
Mining $/t ore mined $26.60 $8.28
$19.26
Process $/t ore processed $21.86 $12.86
$19.46
G&A $/t ore processed $6.31 $2.66
$10.67
TOTALS $54.77 $23.72
$49.39
---------------------------------------------------------------------------
Capital Costs
Initial capital costs are projected at $489.3 million (including owner's
costs and a contingency of $44.5 million). The expansion capital for Phase
II and Phase III is an additional $69.4 million. During the life of mine
there will be sustaining capital requirements of about $77.6 million and
closure costs are estimated at $48.4 million.
Table 4: Capital Costs
---------------------------------------------------------------------------
Phase I Phase II
Phase III
---------------------------------
Expansion
Expansion
capital
capital
costs
costs
funded
funded
Capital by cash
by cash
costs flow
flow
---------------------------------
Year 0 - Year 1.25 - Year
14.5 -
Year 1.25 Year 14.5
Year 15.25
---------------------------------
$ million $ million $
million
---------------------------------
Pre-strip mining and mining equipment 105.7 -
-
Copper circuit facility 106.9 -
-
Zinc circuit facility - 16.3
-
CIP plant - -
18.9
Site development, utilities and
facilities 71.3 5.3
0.70
Tailings facilities 26.0 -
-
Debarwa facilities 4.0 -
-
Adi Nefas facilities 7.5 -
-
Gupo facilities - -
2.7
Adi Nefas development 62.2 -
-
Engineering, procurement, construction
management (EPCM) 29.2 5.2
4.8
First fills (ie. fuel, reagents etc) 12.7 3.6
1.6
Owner cost 19.2 -
-
Contingency 44.5 5.4
4.9
---------------------------------
TOTALS 489.3 35.8
33.6
---------------------------------------------------------------------------
When the mining license is granted, following completion of a feasibility
study, the Government of Eritrea will have a 10% carried interest in the
project and has the option to purchase up to a 30% working interest. It is
not known at this time if the government intends to exercise that option and
the economics and financial analysis of the Study assumes a 100% interest by
Sunridge.
Mineral Reserves
The Study used the recently completed estimate of Measured and Indicated
Resources for the Asmara Project as reported in the Company's press release
dated April 10, 2012 (see news release for additional details).
Tables 5 and 6 below summarize the Mineral Reserves included in the Study
broken down by both ore type and classification.
Table 5: Minerals Reserves by Ore Stream
---------------------------------------------------------------------------
Tonnes copper zinc gold
silver
Ore stream Rock type (kt) (%) (%) (g/t)
(g/t)
---------------------------------------------------------------------------
Phase I Emba Derho 1,194 1.0 0.2 0.2
12.6
Supergene Debarwa 1,204 4.5 0.1 1.3
31.2
--------------------------------------------------------------
Total 2,398 2.7 0.1 0.7
21.9
---------------------------------------------------------------------------
Emba Derho 51,500 0.6 1.6 0.2
9.3
Phase II Debarwa 142 2.2 3.9 1.2
25.9
Primary Adi Nefas 1,675 1.6 8.6 2.9
99.8
--------------------------------------------------------------
Total 53,317 0.7 1.8 0.3
12.1
---------------------------------------------------------------------------
Emba Derho Oxide 623 - - 1.7
4.4
Debarwa Oxide 136 - - 2.0
10.1
Phase III Debarwa Transition 466 - - 3.1
34.6
Gold ore Gupo Oxide 299 - - 2.2
-
Gupo Sulfide 82 - - 2.5
-
--------------------------------------------------------------
Total 1,607 2.3
12.6
--------------------------------------------------------------
Total 57,322
---------------------------------------------------------------------------
Table 6: Mineral Reserves by Classification
---------------------------------------------------------------------------
Reserve Tonnes copper zinc gold
silver
Classification Rock type (kt) (%) (%) (g/t)
(g/t)
---------------------------------------------------------------------------
Emba Derho Primary 4,443 0.8 1.7 0.3
11.6
Debarwa Oxide 2 - - 2.3
22.3
Proven Debarwa Transition 103 - - 4.3
86.1
Debarwa Supergene 375 9.2 0.1 2.2
53.06
Debarwa Primary 7 2.0 20 0.7
16.3
-----------------------------------------------------------
Total 4,930
---------------------------------------------------------------------------
Emba Derho Oxide 623 - - 1.7
4.4
Emba Derho Supergene 1,194 1.0 0.2 0.2
12.6
Emba Derho Primary 47,057 0.6 1.6 0.2
9.0
Debarwa Oxide 134 - - 2.0
9.9
Debarwa Transition 363 - - 2.8
20.0
Probable Debarwa Supergene 828 2.4 0.1 1.0
21.3
Debarwa Primary 135 2.2 4.1 1.2
26.4
Adi Nefas Primary 1,675 1.6 8.6 2.9
100.0
Gupo Oxide 299 - - 2.2
-
Gupo Sulfide 82 - - 2.5
-
Total 52,393
-----------------------------------------------------------
Total 57,322
-------------------------------------------------------------------
The mineral reserves listed in Table 5 and 6 were created for Emba
Derho, Debarwa and Gupo by generating Net Smelter Return (NSR) values
(revenue minus royalty and smelting/selling costs) for each metal using
Measured and Indicated Resources only. Metal prices used were $2.85/lb
copper, $0.80/lb zinc, $1,150/oz gold and $18.50/oz silver. The net revenue
of each block was compared to total cost. Each mining block becomes
economical and included in the processing schedule and becomes part of the
mineral reserves if it is above the total cost of processing, general
administrative and applicable transport.
In the case of the Adi Nefas underground mine the mineral reserves were
generated, using the same metal prices as above, through a sequential
process of NSR calculation, stope optimization, stope design, and
development design. Stope optimization was applied using Snowden's
Stopesizor software which modifies the resource to reflect minimum mining
width for the NSR. The outcome is a set of blocks that reflect this
recoverable resource. Unplanned dilution was added to the model through
adding a fixed width of over break waste into the planned stopes.
Social and Environmental Studies
Social and environmental baseline studies and stakeholder engagement
programs are well advanced on all four deposits that are included in the
Study. This work has been completed to comply with the Equator Principles
and the International Finance Corporation Performance Standards for Social
and Environmental Impact Assessment Studies, as well as the Eritrean
Government "National Environmental Assessment Procedures & Guidelines". The
work is being carried out by the Sunridge social and environmental staff and
consultants (both international and national) and will lead to the
publications of Social and Environmental Impact Assessments (SEIA) in June
2012 (Debarwa) and June 2013 (Asmara North) projects.
Project Location and Access
All four deposits included in the Study are located within a 30 minute drive
on paved roads outside the capital city of Asmara with close proximity to
power, water and an international airport. In addition, the Red Sea port
city of Massawa is 120 kilometers east of Asmara via paved road.
Project Opportunities
Opportunities to further enhance the economic value of the Asmara North
project will be investigated during the feasibility study which is targeted
for completion in the first quarter of 2013. The following opportunities
could significantly enhance the value of the project:
-- Increase process rate to reduce life of mine from 15 years to
approximately 10 years while still maintaining the ability to
process
all ore types through a single mill;
-- Heap leach processing of gold and silver oxide ores in the early
years
of production after receipt of current column leach test work
results;
-- Increase resource confidence and pit expansion based on
additional
drilling at the Gupo and Debarwa deposits particularly for gold
and
silver oxide ore types;
-- Power plant location alternatives and optimization, considering
alternate locations for power generation and technology to
reduce power
demand and cost; and
-- Water supply alternatives and alternate technology to reduce
water demand.
Pre-Feasibility Study Report
The Asmara North Prefeasibility Study is NI 43-101 compliant and was
completed by Snowden Mining Industry Consultants Inc.("Snowden") and GBM
Minerals Engineering Consultants Ltd. ("GBM") with work by Knight Piesold
Ltd. for tailings facility design and waste management and Blue Coast
Metallurgy for metallurgical work. The report will be filed on the Company's
profile on www.sedar.com within 45 days of this press release.
Qualified Person
The Asmara North Pre-feasibility study results were reviewed by Snowden
under the direction of Study Manager, Anthony Finch, P.Eng., an Independent
Qualified Person. The scientific and technical information in this release
has been reviewed and approved by Ian Jackson, C.Eng., of GBM, and Ken
Brouwer, P.Eng., of Knight Piesold, both of whom are Independent Qualified
Persons within the meaning of NI 43-101.
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 and exploration properties
in Madagascar. Sunridge currently has approximately 117 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 or call Greg Davis at the
numbers listed below.
SUNRIDGE GOLD CORP.
Michael Hopley, President and Chief Executive Officer
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. Such 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, labor disputes and other risks of the mining industry;
delays in obtaining governmental approvals or financing; 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.
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.
Greg Davis
VP Business Development
604-688-1263 (direct)
greg_at_sunridgegold.com
www.sunridgegold.com
mailto:greg_at_sunridgegold.com
http://www.sunridgegold.com
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Received on Wed May 02 2012 - 10:40:03 EDT
