Sunridge Gold Signs Agreement with Enamco for Asmara Copper-Zinc-Gold
Project, Eritrea
Feb 6, 2014
_____
Sunridge Gold Corp. (the "Company" or "Sunridge") (SGC: TSX.V/SGCNF: OTCQX)
is pleased to announce that it has executed a binding term sheet (the "Term
Sheet") with the Eritrea National Mining Corporation ("ENAMCO") regarding
ENAMCO's participation in the Company's Asmara Project in Eritrea.
As first announced in August 2012, ENAMCO has exercised its right to acquire
its maximum 30% participating interest in the Asmara Project in addition to
ENAMCO's existing right to be issued a 10% non-assessable interest that will
be carried to production by the participating partners.
ENAMCO has now agreed to pay Sunridge US$18.33 million (the "Purchase
Price"), bearing interest, payable in stages prior to production for the
purchase of the 30% participating interest. Also, on signing of the
shareholder agreement (the "Shareholders Agreement") ENAMCO will pay
Sunridge one-third of all project development costs back-dated to July 4,
2012, the date they exercised the right to purchase, which amount is
currently estimated to be approximately US$4 million. In addition, ENAMCO
will contribute one-third of the funding of ongoing expenditure on the
project, including exploration and development.
"Sunridge has passed many milestones with the development of the Asmara
Project over the last few years and this is the most significant milestone
to date. We are very pleased that we have reached an agreement with the
Eritrean Government and look forward to working cooperatively with ENAMCO to
rapidly move the Asmara Project into production as soon as possible for the
mutual benefit of Sunridge and the people of Eritrea" states Michael Hopley,
President and CEO of Sunridge.
The valuation date for ENAMCO's interest is July 4, 2012 and therefore it is
largely based on the results of Asmara Project prefeasibility study which
were published in May 2012. In May 2013, Sunridge completed a full
feasibility study on the Asmara Project which showed a significantly higher
value.
Sunridge and ENAMCO will now work towards completing a Shareholder Agreement
which is expected to take less than three months. This agreement will govern
the corporate activities, management and funding of the Asmara Mining Share
Company ("AMSC") the holder of the Asmara Project. The shareholders of ASMC
will be Sunridge, holding a 60% interest and ENAMCO holding a 40% interest
(30% participating and 10% carried). Management of AMSC will be by a five
member board of directors comprised three members of Sunridge and two
members of ENAMCO. Funding for future expenditure of AMSC shall be shared
two-thirds by Sunridge and one-third by ENAMCO, subject to dilution and
cancellation of AMSC shares owned by the diluting party.
The framework of the shareholder agreement will be similar to that of ENAMCO
and Nevsun Resources Ltd., which have developed the very successful Bisha
Mine in Eritrea.
The Purchase Price will be paid by ENAMCO to Sunridge on the following
schedule:
* US$5 million - three months from execution of the Shareholders
Agreement
* US$6 million - upon the execution of the financing agreement(s)
securing a significant portion of the financing required to develop the
Asmara Project
* US$4 million - 6 months from the date of the execution of the
financing agreement(s)
* US$3.33 million - 12 months from the date of the execution of the
financing agreement(s)
If either party decides to sell its shares of AMSC to a third-party, the
payment schedule from ENAMCO to Sunridge will be accelerated and payable
within a reasonable period of time of the closing of the sale.
Mining License: The permitting process for the mining license for the Asmara
Project was initiated in December 2013, with the submittal to the Ministry
of Energy and Mines of the summary of the Social and Environmental Impact
Assessment (SEIA) report for the Asmara Project. The permitting process to
acquire the mining license is expected to take nine to twelve months.
Asmara Project Feasibility Study Summary: The Asmara Project feasibility
study (the "Study") was completed in May 2013 and demonstrated that the
mining of four of the six 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 Study
outlines a three-phase start-up mining operation which would initiate
production in 2015 starting with high-grade copper and gold direct shipping
ore production from the Debarwa deposit and heap-leaching of near surface
gold, followed by supergene copper production, then zinc and copper at a
full production rate of 4 million tonnes per year. At full production, the
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.
ABOUT SUNRIDGE:
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
<
http://www.sunridgegold.com> www.sunridgegold.com or call Greg Davis at the
number listed below.
SUNRIDGE GOLD CORP.
"Michael Hopley"
Michael Hopley, President and Chief Executive Officer
For further information contact:
Greg Davis, VP Business Development
Email: <mailto:greg_at_sunridgegold.com> greg_at_sunridgegold.com
Tel: 604-688-1263 (direct)
------------[ Sent via the dehai-wn mailing list by dehai.org]--------------
Received on Thu Feb 06 2014 - 07:36:50 EST