By Sunridge Gold,
SUNRIDGE Gold Corp. (the “Company” or “Sunridge”) (SGC: TSX.V/SGCNF: OTCQX) is pleased to provide a summary of the planned activities in 2015 for the Asmara Project, Eritrea.
The Asmara Project is owned and operated by the Asmara Mining Share Company (“AMSC”) which is owned 60% by Sunridge and 40% by Eritrean National Mining Corporation (“ENAMCO”). AMSC expects to achieve several key milestones over 2015 to meet its goal of commencing mining operations in the fourth quarter of 2015.
A program and budget for 2015 has been approved by the directors and shareholders of AMSC for approximately US$32 million, of which Sunridge is responsible for funding two-thirds and ENAMCO one-third. Included in this budget is approximately US$18 million to purchase trucks, loaders, drills and crushers for the capital cost of the planned Phase 1A mining operation.
Phase 1A is the open-pit mining of near surface high-grade copper and gold ore from the Debarwa deposit that will be crushed and shipped directly to a smelter (known as direct shipping ore or “DSO”). AMSC expects that the equipment for Phase 1A will be financed by the equipment vendors. Sunridge, together with its financial advisor, is in discussions with a number of other potential financing sources to fund the remaining capital costs for AMSC.
Also in the Shareholders’ Agreement (see Sunridge News Release dated June 27, 2014), the parties have agreed that ENAMCO will fund the next approximately US$6 million to AMSC for its portion of retroactive Sunridge contributions to the project.
The following is a summary of the planned important milestones that AMSC is expected to pass in 2015:
Q2 2015 – Mining License and Mining Agreement
The permitting process to receive a mining license for operation of the Asmara Project was initiated in early 2014 by the submittal of the Social and Environmental Impact Assessment (SEIA) report and other associated documents to the Ministry of Energy and Mines (“MEM”).
The MEM appointed an independent engineering company to initiate a due diligence review of the Asmara Project feasibility study and SEIA.. The report of this work was completed in November 2014 and presented to MEM and other Eritrean government ministries during the first week of January 2015. The finding of this report will be reviewed and commented on by MEM and the Eritrean regulators prior to approval. The permitting for water use, land use and construction permits all form part of the mining agreement. AMSC expects the mining license and mining agreement to be issued in Q2 2015.
Q3 2015– Financing Finalized
Sunridge management, with advisors Endeavour Financial, have been reviewing all options for project financing for AMSC with the goal of finalizing the optimum financing structure after the receipt of the mining license. These options include debt from commercial and development banks, equipment financing and financing from commodity off-take and royalty and streaming groups. At this stage several financing options are under consideration.
Q3 2015 Procurement and mobilization of equipment
AMSC to order mobile equipment (trucks, loaders, drills and crushers) for the start of Phase 1A operations.
Q3 2015 Mine personnel hired
AMSC will hire approximately 250 new employees over the course of the year with the majority hired in October 2015.
Q4 2015 Mining operations commence with waste stripping and stockpiling of gold oxide ore
Phase 1A mining operations start at Debarwa in October 2015 first with training and then stripping of waste overlying the DSO material and open-pit mining of the gold oxide. The stockpiled gold oxide ore will be processed as part of Phase 1B gold heap-leach operations.
Q2 2016 – DSO extracted and shipped
AMSC expects to begin extraction and shipping of the DSO in the second quarter of 2016. In Phase 1A, the high-grade copper 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 hosts 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, containing 39 million lbs copper, 11 thousand ounces of gold, and 286 thousand ounces of silver. The C1 cash cost for Phase 1A is expected to be $0.70 to $0.80 per pound of copper. The Key assumptions used in the calculation include $1.10 per litre of diesel fuel, as well as by product revenues calculated at $1100 per ounce gold and $15 per ounce silver.
It is expected that proceeds from Phase1A will cover all capital costs for the expansion into Phase 1B the gold heap-leach operation of near surface gold ore on the Asmara Project. The capex of Phase 1B is estimated to be approximately $50 million and commencement of construction is estimated to be mid to late 2016.
ENAMCO has agreed to purchase the 30% working interest of AMSC for a total purchase price of US$18.33 million of which US$5 million has been paid to date. The balance of US$13.33 million will be paid in installments beginning upon signing a finance agreement that secures a significant portion of the financing required to develop the Asmara Property (the “Financing Agreement”).
Social Engagement and Environmental Monitoring:
AMSC continue the ongoing program of engagement of local communities that will be affected by the development of the Asmara Project. There are two project information centres on the project open for all residents to visit, review and comment on the proposed project designs.
AMSC has an ongoing program of environmental monitoring to meet both international and national environmental regulations. The monitoring will continue to the initialization of production and beyond. In addition, AMSC environmental department has initiated reclamation test-work at Debarwa site in preparation of future closure activities.
Summary of Asmara Project Feasibility Study:
The Asmara Project feasibility study (the “Study”) dated effective May 16, 2013 (amended March 2014), demonstrated that mining the four advanced 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 begin with Phase 1A in 2015 of high-grade copper DSO production from the Debarwa deposit, followed by Phase 1B heap-leaching of near surface gold, Phase 2 supergene copper production, then zinc and copper at a full production rate of 4 million tonnes per year. At full production, the Asmara 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.
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 or call Greg Davis at the number listed below.