|Mon May 14, 2012|
Sunridge Gold Announces Positive Feasibility Study For The Debarwa Deposit, Asmara Project, Eritrea
|Sunridge Gold Corp. (SGC:TSX.V/SGCNF:OTCQX) is pleased to announce the completion and positive results of an independent feasibility study (the "Study") by lead engineer SENET (Pty) Ltd. ("SENET") for its 100% owned Debarwa volcanogenic-massive-sulphide (VMS) copper-gold-zinc deposit, part of the Asmara Project, Eritrea. The Study has concluded that operating Debarwa as a stand-alone mining operation is economically viable. The recently commenced feasibility study on the Asmara North deposits will also examine the integration of the Debarwa deposit with the Asmara North deposits into one operation. |
On May 2, 2012, Sunridge announced the positive results of a pre-feasibility study on the Asmara North deposits which integrated the Debarwa deposit into a single mining and processing operation. The pre-feasibility study considered the trucking of ore from the Debarwa deposit approximately 40 kilometers south of Emba Derho to a centralized operating facility located near the Emba Derho deposit. The pre-feasibility study showed very robust economics with a Net Present Value of $555 million using a 10% discount rate. This Debarwa feasibility study, in contrast, considers the technical and economic viability of operating Debarwa as a stand-alone operation with its own processing plant and ancillary facilities. Based on the results of the feasibility study now underway (known as the "Asmara Project Feasibility Study") Sunridge will make the decision as to whether Debarwa would be best be operated as a stand-alone mine or as ore feed to the proposed central milling facilities near Emba Derho.
Debarwa Feasibility Study Base Case Highlights:
Based on a series of trade-off studies the Study has concluded that Debarwa is best mined by open-pit methods up to a maximum rate of 7.5 million tonnes of rock (ore and waste) per annum of open pit mining. The open pit is estimated to contain 1.3 million tonnes of ore and 18 million tonnes of waste rock at an overall strip ratio of 14.3:1 waste tonnes to ore tonnes.
Open pit mining of pre-strip waste rock and stockpiling of Oxide and Transitional gold bearing ores commences 15 months prior to Phase I process plant production start-up and the costs of pre-stripping are included in the capital costs. Mining is completed at the end of year 3 of the process schedule.
Mining and production (processing) at Debarwa takes place over 4.7 years and is divided into 2 phases as follows:
Phase II processing of stockpiled Oxide and Transitional ores uses the same crushing and milling circuit followed by carbon-in-leach (CIL) processing to produce a gold and silver doré for shipping to a refinery.
Management estimates that initial production and shipping of DSO ore at Debarwa could commence in the fourth quarter of 2014. This allows time for completion of the required environmental work, publication of the Social and Environmental Impact Assessment (SEIA), permitting, financing, waste rock pre-stripping and construction.
Debarwa Phase I - DSO, Supergene and Primary Copper Ore (Year 1 -- Year 3.3)
Table 1: Production Schedule
Financial Analysis (all $ equals US dollars)
The base case uses constant metal prices of $3.28/lb copper, $1,111/oz gold and $21.00/oz silver, which are derived from the 5 year average prices as of April 25, 2012.
Table 2: Sensitivity to Metal Prices
On site operating costs average $73.09 per tonne through life of mine.
Table 3: Average Operating Costs ($ per tonne ore processed)
Initial capital costs are projected at $140.5 million (including pre-strip mining of $27.3 million, owner's costs of $15.1 million and a contingency of $7.8 million). The expansion capital for Phase II (gold CIL plant) is an additional $18.8 million, this is included as part of sustaining capital requirements.
Closure costs are estimated at an additional $16.5 million.
Table 4: Capital Costs
The study was completed on a 100% project basis, however when the mining license for Debarwa is granted the Government of Eritrea will have a right to a 10% carried interest in the project and the additional option to purchase up to a 30% working interest. It is not known at this time what level of interest the government intends to acquire in Debarwa.
The Study used the recently completed estimate of Measured and Indicated Resources for the Debarwa deposit as reported in the Company's press release dated August 18, 2011 (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 Type
Table 6: Mineral Reserves by Classification
Note: The Study does not plan for zinc being processed and recovered at Debarwa and therefore zinc values are not included in the above Reserve tabulations. However, there is a zinc resource in the primary zone of 832,000 tonnes in the Measured and Indicated category with an average grade of 3.86% zinc.
The mineral reserves listed in Table 5 and 6 were estimated for the Debarwa deposit by generating Net Smelter Return (NSR) values (revenue minus transport, royalty and smelting/selling costs) for each metal using Measured and Indicated Resources only. Metal prices used to generate the mineral reserves were $2.85/lb copper, $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 if it is above the total cost of processing, general administrative and applicable transport.
Social and Environmental Studies
Social and environmental baseline studies and stakeholder engagement programs are well advanced for the Debarwa deposit. This work has been completed to comply with the Equator Principles and the International Finance Corporation Performance Standards for Social and Environmental Impact Assessment ("SEIA") 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 it is anticipated that this will lead to the publication of an SEIA in June 2012.
Project Location and Access
The Debarwa deposit is located within a 30 minute drive on paved roads south of the capital city of Asmara with close proximity to a labour force, power, water and an international airport. In addition, the Red Sea port city of Massawa is 120 kilometers east of Asmara via paved road.
Opportunities to further enhance the economic value of the Debarwa deposit will be investigated before start of production. The following opportunities could significantly enhance the value of the project:
The Debarwa Feasibility Study is NI 43-101 compliant and was completed by SENET (Pty) Ltd. and AMC Consultants Pty Ltd. ("AMC") 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 the date of this press release.
The Debarwa Feasibility study results were reviewed by SENET under the direction of Joint Managing Director, Neil Senior an Independent Qualified Person. The scientific and technical information in this release has been reviewed and approved by David Lee F.AusIMM of AMC, and Ken Brouwer, P. Eng., of Knight Piesold Ltd., 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.
Sunridge is a mineral exploration and development company focused on the acquisition, exploration, discovery and development of base and precious metal deposits 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
For further information contact:
Greg Davis, VP Business Development
Tel: 604-688-1263 (direct)
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 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.