Sunridge Reports Feasibility Study for Asmara Project, Eritrea on Schedule for Completion Q2 2013; Focus on Early Cash Flow and Lower Initial Capital Costs
VANCOUVER, British Columbia--(BUSINESS WIRE)-- Sunridge Gold Corp. (the "Company") (SGC:TSX.V/SGCNF:OTCQX) is pleased provide an update on the Asmara Project Feasibility Study (the "Study") being conducted on the four deposits that make up the Asmara Project, Eritrea. Sunridge recently announced the closing of a $10,831,690 financing which enables the Company and consultants to maintain work on the Study at full-speed and complete the work on schedule.
A summary of significant points are as follows:
The Study was started in April 2012 just prior to the publication of a positive Asmara Project prefeasibility study (PFS) that showed that all four deposits could be processed in a single central processing plant;
The Study is on schedule to be completed in the second quarter of 2013;
Based on new metallurgical testwork the Study will include early mining of the Direct Shipping Ore ("DSO") from Debarwa and early heap-leaching of the surface gold material from the project;
Based on the above, cash-flow is expected a year earlier (2015) than presented in the PFS; and
Based on the new operating scenarios, initial capital costs are expected to be reduced and overall economics enhanced in the Study compared to the PFS.
On May 2, 2012 Sunridge announced the results of a prefeasibility study ("PFS") on the Asmara Project that concluded that the four deposits of the Asmara Project could be successfully processed in a single centralized processing plant near the Emba Derho deposit and that this was the optimum economic scenario. The mining and processing plant would produce a total of 365,000 tonnes of copper, 812,000 tonnes of zinc, 415,000 ounces of gold and 11 million ounces of silver over a 15.25 year mine life. The economic analysis in the PFS, using 5-year average metal prices and a 10% discount rate, showed the project to have a pre-tax net present value of $555 million and an internal rate of return of 27%.
Based on the positive economics of the PFS, work started in April 2012 to support the Study; this work included drilling for metallurgical samples on the Emba Derho deposit as well as geotechnical drilling near the proposed Emba Derho pit and at proposed plant facilities.
Variations to the Prefeasibility Study Plan
As in the PFS, the Study is considering a centralized process plant near the large Emba Derho deposit using flotation for the recovery of the base metals. However, in order to enhance economics and reduce project capital cost requirements, various processing trade-off studies have shown that early selective mining and shipping of the DSO from the Debarwa deposit to a smelter as well as early heap-leaching of the known zones of gold mineralization on the project are feasible and result in the optimum economic scenario.
Direct Shipping Ore (DSO)
The DSO Zone is located within the supergene copper zone of the Debarwa deposit and contains 116kt of high grade material at an average grade of 16% copper, 3.0g/t gold and 77.0g/t silver. The DSO zone is located about 40 meters below the surface and is approximately 140 meters long. The Study will include a plan to begin mining operations on the Asmara Project by mining, crushing and direct shipping the DSO material from Debarwa, which is located about 45km south of the Emba Derho plant site. The extraction of DSO material early in the project life could provide early cash flow and reduce initial capital exposure.
The DSO material will be crushed to minus ¾ inch and transported to the port of Massawa for shipping and sale to smelters. This plan for earlier production was outlined in the feasibility study for a standalone operation at Debarwa (see news release dated May 14, 2012) however it was not included in the mining plan outlined in the PFS because additional metallurgical work was required at that time.
Heap Leach Gold Production
Sunridge has conducted extensive metallurgical test work on the gold material from the gold oxide caps of the Emba Derho and Debarwa deposits and the Gupo Gold deposit since completion of the PFS. Test work, including column tests of gold ores to simulate heap-leach gold processing, has been completed on each deposit to support heap leach production with leach results utilizing ¼ inch and ½ inch material demonstrating 51% to 71% gold recovery. The heap-leaching process will provide Sunridge the opportunity to generate revenue from the precious metals earlier in the mine life thereby benefitting the project economics. This is an improvement to the gold processing plan in the PFS which outlined a Carbon in Pulp (CIP) facility which would have stockpiled the material from the gold caps and processed it at the end of the mine life.
The Study is being conducted by Senet (Pty) Ltd. ("Senet"), based in Johannesburg, South Africa, an internationally respected leader in the design, engineering and construction of mining projects in Africa. Senet has extensive experience working in Eritrea on the Bisha Mine Project for Nevsun Resources Ltd. Senet's expertise in process plant design and infrastructure is supported by Snowden, based in Vancouver, Canada on mine planning and design. Their experience is complemented by Knight Piesold Ltd. ("KP") for tailings facility design and waste management and Blue Coast Metallurgy Ltd ("Blue Coast") for metallurgical design and supervision. The Study is focused on Sunridge's large Emba Derho copper-zinc-gold-silver volcanogenic-massive-sulphide (VMS) deposit, the nearby high grade zinc-gold-copper Adi Nefas VMS deposit, the Debarwa copper-zinc-gold-silver VMS deposit and the Gupo gold deposit all comprising the Asmara Project.
As announced on August 20, 2012, the Company has begun negotiations with the Eritrean National Mining Corporation ("ENAMCO") for ENAMCO's purchase of a 30% working interest in the Asmara Project. On completion of the purchase, ENAMCO will have a 10% carried interest and a 30% working interest and will therefore be responsible for funding one-third of the costs of all operations conducted on the Asmara Project, which may include a portion of the Study.
Sunridge currently has approximately 174 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.
Mr. Michael J. Hopley is the Qualified Person who approved the technical information contained in this news release.
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.
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 continue to be refined; possible variations in ore grade or recovery rates; accidents, labor disputes and other risks of the mining industry; delays in negotiating a shareholders' agreement with ENAMCO and 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.
Sunridge Gold Corp.
Greg Davis, VP Business Development
Tel: 604-688-1263 (direct)
KEYWORDS: North America Canada Africa
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