From: Biniam Tekle (biniamt@dehai.org)
Date: Thu Jun 04 2009 - 12:51:12 EDT
Jun 04, 2009 11:12 ET
Sunridge Gold Announces Positive Preliminary Economic Assessment for the
Emba Derho Deposit
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 4, 2009) - Sunridge Gold
Corp. (TSX VENTURE:SGC) ("Sunridge" or "the Company") is pleased to announce
the positive results of an independent Preliminary Economic Assessment
("PEA") Study on the Company's Emba Derho copper-zinc-gold volcanogenic
massive sulphide (VMS) deposit located on the 100% owned Asmara Project in
central Eritrea. Emba Derho is one of four deposits defined within the
Asmara Project to date.
Highlights of the study completed by Wardrop, a Tetra Tech Company
("Wardrop") include:
- The currently estimated mineral resources provide for open-pit mining at a
rate of 4 million tonnes of ore per year for 10.4 years with a possibility
of mine life extension through either an expanded open pit or underground
production;
- A conventional flotation process plant would produce separate copper and
zinc concentrates containing annually approximately 55,000t zinc, 25,000t
copper, 20,000oz gold and 0.6moz silver;
- The base case internal rate of return (IRR) is 21.6% with 4 years payback
on an estimated initial capital cost of $331.8 million with sustaining
capital of $67.3 million;
- The pre-tax net present value (NPV) is estimated to be $203.9 million at
10% discount rate;
- Total operating costs are estimated by Wardrop to be $21.19 per tonne
milled;
- The PEA is based entirely on resources in the Indicated category using
data from 256 diamond drill holes. Wardrop has estimated an Indicated
mineral resource in the Supergene and Primary zones of 58.97 million tonnes
containing 990 million pounds of copper, 1,900 million pounds of zinc, 485
thousand ounces of gold and 19.5 million ounces of silver (as announced by
Sunridge on September 17, 2008);
- Wardrop recommends the continuation of studies and moving the Emba Derho
project into the Pre-Feasibility stage. This includes further drilling in
the open-ended northwest zone of the Emba Derho mineralized system and
continued exploration elsewhere on the Medrizien exploration license which
may lead to the discovery of satellite deposits.
In addition, Wardrop cite a number of opportunities for improvement and cost
saving for the Emba Derho project. These include the following:
- The possible mining of the northwest zone of the Emba Derho deposit. This
zone consisting of 17.3 million tonnes at an average grade of 0.96% Cu;
1.26% Zn; 0.18 g/t Au and 8.84 g/t Ag is not included in the Wardrop base
case scenario. The addition of this zone could increase the mining rate from
4 to 6 million tonnes per year. The resources in the northwest zone are
included in the Sept. 17, 2008 indicated resource estimate but are not
included in the in-pit resource used by Wardrop for the PEA.
- The mining plan for the Emba Derho PEA study does not consider the upper
oxide gold zone as an economic resource. This zone containing 94,000 ounces
of gold (3.51 million tonnes at an average grade of 0.84 g/t gold) could be
considered for future mining perhaps in conjunction with the nearby Gupo
gold deposit. The resources for the oxide zone are included in the October
31, 2008 indicated resource estimate, but are not included in the in-pit
resources used by Wardrop for the PEA.
- Mining Emba Derho in conjunction with other known mineral deposits on
Sunridge's licenses;
- Possible use of the existing railway line to transport concentrate to the
port city of Massawa;
- Sharing costs of the port facility at Massawa with Nevsun's Bisha project;
- Use of part of the open-pit for waste deposition;
- Improving the capital costs schedule;
- Further study of power options.
Michael Hopley, President and CEO of Sunridge Gold, states, "Completing the
Emba Derho PEA is a significant achievement for the Company; the study
demonstrates that the deposit has the potential to become a large base
metals producer and a project that could be moved to production in a
relatively short period of time given its proximity to excellent
infrastructure."
Emba Derho is located 12 kilometres away from the capital city of Asmara and
is accessed by paved roads. Local infrastructure is excellent with power,
water and ample space for open pit mining and related operations. In
addition the deep water port at Massawa on the Red Sea is 120 kilometers
away by paved road and railway. The Asmara Project contains three additional
deposits with numerous high priority exploration targets. The government is
strongly supportive of the mining industry in the country and local
community relations are good.
Mineral Resource Estimate
The resource estimate was completed by Wardrop using data from 256 diamond
drill holes out of a total of 264 holes drilled to date. This independent
resource estimate for the Emba Derho deposit is dated September 17, 2008 and
only includes the Supergene and Primary Zones and is the basis for the Emba
Derho PEA study. It is summarized as follows:
---------------------------------------------------------------------------
Tonnes
Supergene Zone - Indicated (Mt) Cu % Zn % Ag g/t Au g/t
---------------------------------------------------------------------------
Cu rich(1) 0.84 0.89 0.11 7.03 0.11
---------------------------------------------------------------------------
Total Supergene Indicated 0.84 0.89 0.11 7.03 0.11
---------------------------------------------------------------------------
Tonnes
Primary Zone - Indicated (Mt) Cu % Zn % Ag g/t Au g/t
---------------------------------------------------------------------------
Cu rich(1) 37.58 1.02 1.01 9.36 0.19
---------------------------------------------------------------------------
Zn rich(2) 20.55 0.28 2.35 12.13 0.39
---------------------------------------------------------------------------
Total Primary Indicated 58.13 0.76 1.48 10.34 0.26
---------------------------------------------------------------------------
(1) The copper rich zone is those blocks having Cu values greater than 0.5%
plus those blocks having Cu values greater than 0.5% and Zn values
greater than 1%.
(2) The zinc rich zone is defined as those blocks having Zn values greater
than 1%, but with Cu values less than 0.5%.
Financial Analysis
A base case preliminary economic evaluation of the Emba Derho Project was
prepared by Wardrop based on a pre-tax financial model. The in-pit resource
is estimated at 41.6 million tonnes at an average grade of 0.68% Cu; 1.55%
Zn; 0.33 g/t Au and 10.90 g/t Ag. For the projected 10.4 year mine life the
following pre-tax financial parameters were calculated based on the London
Metal Exchange (LME) five year historical average metal prices as follows
(all prices US$):
- 21.6% IRR
- 4.0 yrs payback on $331.8 m capital cost plus $67.3 m sustaining capital
- $203.9 M NPV at 10% discount value
- Cu - $2.50/lb
- Zn - $1.00/lb
- Au - $650.00/oz
- Ag - $11.00/oz
Sensitivity of the project economics to alternate metal price scenarios:
---------------------------------------------------------------------------
SENSITIVITY TO METAL PRICES
---------------------------------------------------------------------------
Base Case Prices 2 Year Average
5 Year Average Price Current Price
---------------------------------------------------------------------------
Pre-tax NPV @ 10% US $ 203.9 323.8 40.0
---------------------------------------------------------------------------
IRR % 21.6 27.7 12.5
---------------------------------------------------------------------------
Pre-tax Payback Years 4.0 3.2 5.6
---------------------------------------------------------------------------
Mine Life Years 10.4 10.4 10.4
---------------------------------------------------------------------------
---------------------------------------------------------------------------
METAL PRICES
---------------------------------------------------------------------------
Copper US $ lb 2.50 2.95 2.15
---------------------------------------------------------------------------
Zinc US $ lb 1.00 0.95 0.70
---------------------------------------------------------------------------
Gold US $ oz 650.00 835.00 975.00
---------------------------------------------------------------------------
Silver US $ oz 11.00 14.00 15.00
---------------------------------------------------------------------------
Note: Historical average metal prices sourced from the London Metal
Exchange.
The PEA is a preliminary economic study and there is no certainty that the
projected results of the PEA will be realized in actual operations.
CORPORATE UPDATE:
As of May 2009, Sunridge has signed 7 Confidentiality Agreements with
companies interested in the Emba Derho deposit and/or the whole Asmara
Project. Some of these parties have conducted site visits with a view to a
possible transaction with the Company on the property. Although the
discussions with certain of these parties are fairly advanced, they have not
resulted in a firm offer and there can be no assurance that any agreements
or transactions will result from these confidentiality agreements or site
visits.
About Sunridge
Sunridge Gold Corp. is a mineral exploration and development company focused
on the acquisition, exploration, discovery and development of precious and
base metal projects. The company is currently developing base and precious
metals deposits on the Asmara Project in Eritrea including the completion of
a positive Preliminary Economic Assessment Study on the large Emba Derho
Deposit. The Company has 62.4 million shares outstanding, approximately $5.5
million (Canadian) in cash and the Company 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 Don Halliday or Greg Davis at the numbers
listed below.
NOTES:
1. Except where noted all dollars referred to in this news release are US
dollars.
2. The Emba Derho resources, on which the PEA study was based, were
originally released on September 17, 2008 by the Company.
3. The Emba Derho deposit is layered into distinct metal zones as is the
case in most of these types of VMS deposits and therefore mineral resources
for the upper oxide gold zone, the primary zinc-rich zone and copper-rich
zone are reported separately. The copper-rich primary sulphide zone is
defined as those blocks that have a grade of 0.5% copper or greater; the
zinc-rich primary sulphide zone is defined as those blocks that have an
average grade of 1.0% zinc or greater. There is also an "overlap"
copper/zinc zone where blocks meet both criteria. In this new resource
estimate it was determined to include the overlap zone in the copper-rich
sulphide zone.
4. A Quality Assurance/Quality Control program is part of the drilling
program on the Emba Derho deposits. This program includes chain of custody
protocols as well as systematic submittals of standards, duplicates and
blank samples into the flow of samples produced by the drilling. The
database archive used by Wardrop in the estimate of the resources at Emba
Derho was reviewed and verified by Paul Gribble, of Wardrop, a Qualified
Person as defined by NI 43-101.
5. A description of the geology, sampling procedures, and the Company's
laboratory Quality Assurance / Quality Control procedures has been described
in previous NI 43-101 Technical Reports and will be updated and contained
within the new Technical Report summarizing the PEA that will be filed
within 45 days of the date of this release. This report will then be also
available at www.sedar.com.
6. Samples from the drilling were prepared at African Horn Testing Services
(Eritrea) and analyzed at Genalysis Laboratories (a NATA registered
laboratory) in Perth, Western Australia.
7. The results of the Wardrop resource estimate have been reviewed by
Sunridge technical staff including Michael J. Hopley the Qualified Person
for Sunridge. The Company believes that the Wardrop resource estimate for
Emba Derho was conducted in a professional and competent manner. Mr. Hopley
is also the person responsible for preparation of the technical information
contained in this news release and is President and Chief Executive Officer
of Sunridge.
8. Mineral resources that are not Mineral Reserves do not have economic
viability.
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.
*For more information, please contact*
Sunridge Gold Corp.
Don Halliday
Executive Vice President
604-899-1505 (direct)
donh@sunridgegold.com
or
Sunridge Gold Corp.
Greg Davis
VP Business Development
604-688-1263 (direct)
greg@sunridgegold.com
www.sunridgegold.com
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