From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Fri Sep 04 2009 - 11:57:27 EDT
Sunridge Gold Corp. Press Announcement
TSX VENTURE: SGC
Sep 04, 2009 08:00 ET
Sunridge Gold Announces US$10,000,000 Exploration Funding Agreement and
Strategic Alliance Financing With New Partner Antofagasta Minerals S.A.
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2009) - Sunridge
Gold Corp. ("Sunridge" or the "Company") (TSX VENTURE:SGC) is pleased to
announce that it has signed a memorandum of understanding ("MOU") to
enter into a strategic partnership with Antofagasta Minerals S.A.
("Antofagasta") whereby Antofagasta will fund US$10,000,000 of
exploration work over a 5-year period to earn a 60% interest in part of
the Company's Asmara Project in Eritrea, now known as the Exploration
Areas, and will purchase common shares of Sunridge in a non-brokered
private placement for proceeds of US$5 million. Antofagasta will become
Sunridge's largest shareholder owning an approximate 18% interest in
Sunridge.
Michael Hopley, President and CEO of Sunridge, stated: "We are very
happy to be forming this strategic alliance with one of the leading
copper producers in the world. Having concluded site visits, it is
obvious that Antofagasta shares our belief that the Asmara Project has
the potential for the discovery of other large base metal deposits -
larger even than the Emba Derho deposit. This funding of the work on the
Exploration Areas will allow us to drill many of the best targets in
those areas. In addition, the corporate financing by Antofagasta will
permit us to continue further exploration and development of the four
existing deposits, particularly Emba Derho, towards final feasibility
and eventual production."
HIGHLIGHTS:
- The exploration agreement with Antofagasta excludes the current
existing Development Areas and the four defined deposits outlined to
date and will therefore focus on other areas of the Asmara Project,
known as the Exploration Areas, which are considered to have the
potential for large new discoveries. On the Development Areas, which
will remain owned 100% by Sunridge, the Company will commence its own
drilling programs with the objective to expand and further develop these
resources.
- The combination of the exploration funding agreement and the corporate
funding by Antofagasta will allow Sunridge to conduct parallel
exploration programs on the Exploration Areas and on the existing
deposits within the remaining Development Areas (see map below).
- Combined with its existing cash of approximately $4.5 million,
Sunridge will have a stronger cash position of approximately $10.0
million upon closing of the private placement. This will allow Sunridge
to aggressively conduct exploration and development programs and advance
deposits toward final feasibility studies on the existing resources on
the Asmara Project as well as commencing exploration on the Besakoa
project in Madagascar.
- Sunridge still retains a 100% interest in the four defined deposits
outlined to date on the Asmara Project.
- The alliance between Sunridge and one of the premier copper producers
in the world should bring strong benefits to the exploration and
potential development of the Asmara Project.
EXPLORATION AGREEMENT:
The MOU states that under the exploration agreement to be finalized in
October 2009, Antofagasta will have an option to earn a 60% interest in
the Asmara Project Exploration Areas (see map below) by spending
US$10,000,000 over a maximum 5-year period. The Exploration Areas cover
approximately 585 hectares within the Asmara Project, but specifically
excludes the four deposits already defined by Sunridge; the large Emba
Derho copper-zinc-gold VMS deposit, the Adi Nefas zinc-gold-copper VMS
deposit, the Debarwa copper-zinc-gold deposit and the Gupo gold deposit.
The Exploration Areas includes many high priority drill targets defined
by Sunridge over the past several years through geological mapping and
sampling as well as various geophysical methods. The targets of
particular interest are Dario Paulus, Kodadu, Adi Rassi, Adi Musa and
Adi Lamza. Sunridge believes that these areas have strong potential for
new base metals and possibly gold discoveries.
Sunridge will be the operator of the exploration program until a total
of US$7,000,000 has been funded by Antofagasta at which time Antofagasta
can become operator. The following are the minimum exploration
commitments to maintain the option: Year 1: US$1,500,000; Year 2:
US$2,000,000; Year 3: US$2,000,000; Year 4: US$2,000,000; Year 5:
US$2,500,000. Antofagasta is obligated to spend a minimum of US $2
million in the first two years or pay Sunridge any shortfall.
Antofagasta has the right to accelerate the funding.
Upon completion of US$10,000,000 in exploration expenditures,
Antofagasta will be entitled to acquire a 60% interest in the
Exploration Areas and will have the right to complete a feasibility
study on any project on the Exploration Areas to earn an additional 15%
for a total of 75% interest in the Exploration Areas.
PRIVATE PLACEMENT:
Under a financing arrangement with Sunridge, Antofagasta will purchase
shares in Sunridge equal to US$5.0 million. Antofagasta will subscribe,
by way of a non-brokered private placement, for approximately 14,000,000
shares of Sunridge at a price of $0.40 per share for gross proceeds of
US$5 million (CDN$5.6 million). Upon completion of the private
placement, Antofagasta will own an approximate 18% interest in Sunridge.
As part of the financing and exploration agreement, Antofagasta will be
entitled to appoint one member to the Sunridge Board of Directors and
will have certain rights to participate in future financings to maintain
their interest.
The proceeds from the private placement will be for further exploration
and development on the four existing deposits within the Asmara Project,
for initial exploration work on the Company's projects in Madagascar and
for general corporate purposes.
The transaction remains subject to Antofagasta completing its due
diligence, completion of formal documentation and regulatory approvals.
Closing is expected in October, 2009.
ANTOFAGASTA MINERALS S.A.:
Antofagasta is a wholly owned subsidiary of Antofagasta plc, which is
listed on the London Stock Exchange (symbol - ANTO) and is a constituent
of the FTSE-100 index, with interests in mining, transport and water
distribution. Its Chilean mining operations, which comprise Los
Pelambres, El Tesoro and Michilla, are expected to produce approximately
447,000 tonnes of copper in concentrate and cathode and 7,200 tonnes of
molybdenum in concentrate in 2009. It is currently carrying out a
brownfield expansion at Los Pelambres and developing the greenfield
Esperanza project in Chile, which, when operational, are expected to
increase total Group copper production to nearly 700,000 tonnes per year
from 2011. Antofagasta also has exploration or feasibility programs in
Chile, Pakistan, Zambia and Mexico. At 30 June 2009, Antofagasta plc had
net cash of US$1.8 billion and it currently has a market capitalization
of US$11.3 billion.
ABOUT SUNRIDGE
Sunridge Gold Corp. 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.
Recently the Company published a positive Preliminary Economic
Assessment Study on the Emba Derho copper-zinc-gold deposit. Prior to
the completion of the above private placement, the Company has 62.6
million shares outstanding and approximately $4.5 million in cash.
Sunridge Gold Corp. 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 Don
Halliday or Greg Davis at the numbers listed below.
SUNRIDGE GOLD CORP.
Michael Hopley, President and Chief Executive Officer
This press release contains forward-looking statements about the Company
and its business. Forward looking statements are statements that are not
historical facts and include resource estimates. The forward-looking
statements in this press release are subject to various risks,
uncertainties and other factors that could cause the Company's actual
results or achievements to differ materially from those expressed in or
implied by forward looking statements. These risks, uncertainties and
other factors include, without limitation risks related to fluctuations
in gold prices; uncertainties related to raising sufficient financing to
fund the planned work in a timely manner and on acceptable terms;
changes in planned work resulting from weather, logistical, technical or
other factors; the possibility that results of work will not fulfill
expectations and realize the perceived potential of the Company's
properties; uncertainties involved in the interpretation of drilling
results and other tests and the estimation of gold resources; the
possibility that required permits may not be obtained on a timely manner
or at all; the possibility that capital and operating costs may be
higher than currently estimated and may preclude commercial development
or render operations uneconomic; the possibility that the estimated
recovery rates may not be achieved; risk of accidents, equipment
breakdowns and labor disputes or other unanticipated difficulties or
interruptions; the possibility of cost overruns or unanticipated
expenses in the work program; and other factors identified in the
Company's SEC filings and its filings with Canadian securities
regulatory authorities. Forward-looking statements are based on the
beliefs, opinions and expectations of the Company's management at the
time they are made, and other than as required by applicable securities
laws, the Company does not assume any obligation to update its
forward-looking statements if those beliefs, opinions or expectations,
or other circumstances, should change.
To view the map accompanying this press release, please click the
following link: http://media3.marketwire.com/docs/SGCMAP09032009.pdf
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.
For more information, please contact
Sunridge Gold Corp.
Don Halliday
Executive Vice President
604-899-1505 (direct)
donh@sunridgegold.com
or
Sunridge Gold Corp.
Greg Davis
VP Business Development
604-688-1263 (direct)
greg@sunridgegold.com
www.sunridgegold.com
http://www.marketwire.com/press-release/Sunridge-Gold-Corp-TSX-VENTURE-S
GC-1040343.html
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