BY – stockhouse.com/news/
Vancouver, British Columbia–(Newsfile Corp. – February 5, 2015) – Sunridge Gold Corp. (TSXV: SGC) (OTCQX: SGCNF) has provided an update of the planned activities in 2015 for the base and precious metal projects on the Asmara Project in Eritrea.
Eritrea, with a population of approximately 4 million, has excellent infrastructure; paved roads, grid power, and a paved road to the port of Massawa, and is ranked 52 out of 112 world-wide mining jurisdictions by the Fraser Institute.
The Asmara Project is owned and operated by the Asmara Mining Share Company, which is owned 60% by Sunridge and 40% by Eritrean National Mining Corporation (“ENAMCO”).
Asmara Mining 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 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 loaded into containers and transported 120 kilometres to the port facility at Massawa for shipping and sale to a smelter. Asmara Mining expects that the equipment for Phase 1A will be financed by the equipment vendors. 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.
At full production, the Asmara Mine will produce an average annual production of 65 million pounds of copper, 184 million pounds of zinc, 42,000 ounces of gold, and 1 million ounces of silver over the first 8 years, with a life of mine of 17 years.
Sunridge management, with advisors Endeavour Financial, have been reviewing all options for project financing 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.
The company is trading at $0.14, and with 210 million shares outstanding, is capitalized at $29.4 million.
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Barry Morgan, CFO
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February 5, 2015 – 12:26 PM EST