Sunridge Gold Announces $837 Million Net Present Value Feasibil

 
FSC / Press Release 
Sunridge Gold Announces $837 Million Net Present Value Feasibility Study For The
Asmara Project, Eritrea 
Vancouver, British Columbia CANADA, May 16, 2013 /FSC/ - 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 Asmara Project in Eritrea.  The Study demonstrates
that the mining of all four advanced deposits that make up the Asmara Project
(Emba Derho, Adi Nefas, Gupo Gold and Debarwa) and processing of the ore near
the large Emba Derho deposit is economically robust with a Net Present Value
("NPV") of $837 million. The Study outlines a three-phase staged start-up mining
plan which would initiate production almost one year earlier than was envisaged
in the prefeasibility study. This earlier cash-flow, combined with capital cost
reductions, reduces the initial capital requirements to be financed by over $130
million. 
As a result of the positive outcome of the Study, Sunridge will continue work
towards bringing the Asmara project into production as soon as possible, by
completing required environmental studies, applying for the mining license,
arranging debt financing, commencing detailed engineering work and hiring new
key employees.  Management estimates that initial production on the Asmara
Project will commence in mid-2015. 
Base Case Highlights (all $ equals US dollars): 
* NPV of $837 million at a 10% discount (pre-tax) 
NPV of $443 million at a 10% discount (post-tax)
* Internal rate of return (IRR) - pre-tax 34%, post-tax 27%
* Payback - pre-tax 4.1 production years, post-tax 4.6 years
* Base Case metal prices used - $3.25/lb copper, $1.00/lb zinc, $1,400/oz gold,
$25.00/oz silver
* Initial capital cost Phase IA & IB Direct Shipping Copper Ore & Heap-Leach
Gold - $46 million
* Initial Phase II & III flotation plant capital cost estimate - $357 million
* Peak Equity Funding - $354 million
* On site operating costs - $29.42 per tonne average through life of mine
* Average annual metal production over the first 8 years-   *  65 million pounds (29,000 tonnes) of copper 
* 184 million pounds (83,000 tonnes) of zinc 
* 42,000 ounces of gold 
* 1.0 million ounces of silver
* Total metal production - 
* 841 million pounds (381,000 tonnes) of copper 
* 1,874 million pounds (850,000 tonnes) of zinc 
* 436,000 ounces of gold 
* 11 million ounces of silver
* Life of Mine - 1 construction year, 15.3 production years 
Michael Hopley, President and CEO of Sunridge Gold states, "We are delighted
with the results of the Asmara Project feasibility study which demonstrates even
stronger economics and a superior mining plan than the prefeasibility study that
was completed a year ago. We have been able to successfully reduce initial
capital costs by instituting a 3 phased start-up plan that starts production a
year earlier than previously planned. In a little over two years, the Asmara
Mine can start production and become a very important producer of copper, zinc,
gold and silver for the benefit of Sunridge shareholders and the Eritrean
people." 
Conference call details: 
The Company will hold a conference call on Thursday, May 16, 2013, at 8:00AM
Vancouver/11:00 AM Toronto, New York/4:00PM London, to discuss the Asmara
Project feasibility study results. Please call in at least five minutes prior to
the conference call start time and simply ask to join the Sunridge call.  Dial
in details are as follows: 
Canada & USA:  1-800-319-4610 (toll free)
International: 604-638-5340 
Questions during the conference call regarding the Study can be sent to
greg@sunridgegold.com. 
The conference call will be available for replay until May 23, 2013, by calling
Canada & USA toll free 1-800-319-6413, Vancouver local 604-638-9010 and entering
passcode 7852 followed by the # sign. 
Mining and Production 
The Study has concluded that the processing of gold and silver ores from Emba
Derho, Gupo Gold and Debarwa by heap-leaching as well as the processing of
copper and zinc ores from Emba Derho, Adi Nefas and Debarwa by milling and
flotation at facilities near Emba Derho provides the optimum economic scenario. 
The Emba Derho, Debarwa and Gupo deposits will be mined by open-pit methods and
the Adi Nefas deposit by underground mining methods. 
The mining plan consists of a 3 phase start up in order to reduce initial
capital costs. In Phase I, the high-grade copper (Phase IA) (direct shipping ore
"DSO") will be mined, crushed to less than 10 mm, loaded into containers and
transported 120 km to the port facility at Massawa for shipping to a smelter. 
In addition, (Phase IB) near surface gold and silver ore will be mined from the
Debarwa, Emba Derho and Gupo deposits and trucked to the same crushing facility
near Emba Derho and processed in the gold recovery heap-leach facility. The
heap-leach facility is located inside the tailings storage facility and
available until Year 5 of operations. 
During Phase II, supergene copper ores will be mined from both Debarwa and Emba
Derho and processed at a central flotation plant at Emba Derho at a nominal rate
of 2 million tonnes per annum. Copper concentrate with gold and silver byproduct
will be transported to the Port of Massawa and shipped to smelters. 
Full Production will be achieved in Phase III. Primary copper and zinc ores from
Debarwa, Adi Nefas and Emba Derho deposits will be processed at a flotation
plant at Emba Derho at a nominal rate of 4 million tonnes per annum. Copper
concentrate with gold and silver byproduct and zinc concentrate will be
transported to the port facility at Massawa for shipping to smelters. 
Power will be generated onsite using a combination of diesel and medium fuel oil
generators. Water supply is sourced from the capture of rainfall in ponds and
recycled within the plant. 
Phase I - DSO and Gold Production (Year 1 - Year 5)
Phase IA - DSO (Year 1 - Year 2)
* Mining of 116,000 tonnes of high-grade DSO with an average grade of 15.6%
copper, 2.96  g/t gold, and 76.8 g/t silver from Debarwa
* Crushing at Emba Derho and shipping to smelter
* Mine and ship in 6 months 
Phase IB - Gold production - (Year 1 - Year 5) 
* Mining of the 3.0 million tonnes near-surface gold "caps" at Debarwa and Emba
Derho followed by Gupo Gold
* Process at gold heap-leaching operation near the Emba Derho deposit at a rate
of 1.4 million tonnes per year
* Phase IB average grades 1.48 g/t gold and 8.2 g/t silver
* Phase IB average recoveries 66.7% gold, 37.7% silver 
Phase II- Supergene Copper Production (Year 2 - Year 3.25) 
* Mine and process by flotation 2.4 million tonnes of high-grade copper
supergene ore from Debarwa and Emba Derho at rate of 2 million tonnes per year
for 1.25 years
* Phase II average grades 2.25% copper, 0.76 g/t gold, 21.6 g/t silver
* Phase II average recoveries 79% copper, 51% gold, 58% silver
* Copper concentrate - 25% copper, 4.2 g/t gold, 109 g/t silver 
Phase III Full Production (Year 3.25 - Year 16.3) 
* Mine and process by flotation 51.0 million tonnes of primary copper and zinc
ore from Emba Derho, Debarwa, and Adi Nefas at a rate of 4 million tonnes per
year for 13years
* Phase III average grades 0.73% copper, 1.91% zinc, 0.36 g/t gold, 12.6 g/t
silver
* Final Waste/Ore ratios  -  2.5:1 at Emba Derho, 9.8:1 at Debarwa and 1.7:1 at
Gupo
* Adi Nefas to be mined using underground long hole bench retreat ranging
between 150,000 and 470,000 tonnes per year for a total of 1.682 million tonnes
mined over 6 years and blended with ore from Emba Derho
* Phase III recoveries average 86% copper, 86% zinc, 48% gold, 44% silver
* Copper concentrate - 25% copper, 7.9 g/t gold, 255 g/t silver
* Zinc concentrate - 57% zinc 
Financial Analysis
The base case uses constant metal prices of $3.25/lb copper, $1.00/lb zinc,
$1,400/oz gold and $25.00/oz silver. 
Table 2: Sensitivity to Metal Prices 
-***- 
------------------------------------------------------------------------- 
Base       Low       Low       Current 
Case    Copper     Metal         Metal 
Prices     Metal     Price        Prices 
Price             May 10 2013
-------------------------------------------------------------------------
NPV @ 10% discount (Pretax)         837       728       404           758
IRR                                 34%       31%       22%           33%
NPV @ 0% discount (Pretax)        1,791     1,596     1,026         1,638
Payback                             4.1       4.3       5.1           4.2 
NPV @ 10% discount (Post- tax)      443       364       131           386
IRR                                 27%       24%       17%           26%
NPV @ 0% discount (Post-tax)      1,276     1,136       727         1,166
Payback                             4.6       4.8       5.6           4.7 
Metal Prices
Copper                             3.25      3.00      2.75          3.35
Zinc                               1.00      1.00      0.80          0.83
Gold                              1,400     1,400     1,250         1,449
Silver                            25.00     25.00     21.00         24.00
------------------------------------------------------------------------- 
-****- 
Operating Costs
On site operating costs average $29.42 per tonne through life of mine. 
Table 3: Average Operating Costs 
-***- 
---------------------------------------------------- 
Heap-Leach       Flotation 
Phase IB   Phase II & III 
---------------------------
Mining $/t ore mined           2.46            13.35
Process $/t ore processed      8.68            17.64
TOTALS                        11.14            30.99
---------------------------------------------------- 
-****- 
Capital Costs
Initial capital costs for the DSO and heap-leach are projected at $46 million. 
The expansion capital for Phase II and Phase III is an additional $357 million. 
During the life of mine there will be capital requirements estimated at $227
million and closure costs are estimated at $36 million. 
Table 4: Total Capital Expenditures per Phase 
-***- 
------------------------------------------------------------------------- 
Phase I  Phase II  Phase III     Total
------------------------------------------------------------------------- 
$ million $ million  $ million $ million
-------------------------------------------------------------------------
Pre-strip mining and mining
equipment (includes all costs
incurred until initiation of copper
processing by flotation) -
 (excludes HL & DSO opex)               0      116.0          0     116.0
Phase I Plant and Equipment          49.5          0          0      49.5
Copper circuit facility                 0      113.8          0     113.8
Zinc circuit facility                   0          0       22.8      22.8
Site development, utilities
and facilities                        3.8       55.5        5.5      64.8
Water facilities                     0.04       19.4          0     19.44
Tailings facilities                  11.2       18.3        0.2      29.7
Debarwa facilities                      0        9.8          0       9.8
Adi Nefas facilities                    0        3.2          0       3.2
Gupo facilities                       1.1          0          0       1.1
Adi Nefas development                   0       17.0       17.1      34.1
Engineering, procurement,
construction management (EPCM)        4.1       29.8        5.2      39.1
First fills (ie. fuel, reagents etc) 0.03        1.7          0      1.73
Owner's cost's                        1.0       22.7          0      23.7
Contingency                           5.5         21        3.6      30.1
-------------------------------------------------------------------------
SUBTOTALS                            76.3      428.2       54.4     558.9
-------------------------------------------------------------------------
Sustaining Costs                                                     56.0
Social Costs                                                         14.8
Closure Costs                                                        36.6
-------------------------------------------------------------------------
TOTAL                                                               666.3
------------------------------------------------------------------------- 
-****- 
When the mining license is granted the Government of Eritrea will have a 10%
carried interest in the project and ENAMCO (Eritrean National Mining
Corporation) will be purchasing an additional 30%.  ENAMCO will therefore be
responsible for 33.33% of all capital and operating costs of the mine. 
Table 5: Mineral Reserves by Classification 
-***- 
------------------------------------------------------------------------
Rock type                       Tonnes   copper   zinc    gold    silver 
(kt)     (%)     (%)   (g/t)    (g/t)
------------------------------------------------------------------------
Proven
------------------------------------------------------------------------
Emba Derho Primary               4,337     0.9     1.7     0.2      11.6
Debarwa Oxide                        1      -       -      1.0       6.7
Debarwa Transition                  94      -       -      4.3      84.1
Debarwa Supergene                  423     8.9     0.2     2.2      53.2
Debarwa Primary                      6     1.6     2.8     0.6      15.6
------------------------------------------------------------------------
Total proven                     4,861
------------------------------------------------------------------------
Probable
------------------------------------------------------------------------
Emba Derho Supergene             1,200     1.0     0.4     0.3      14.9
Emba Derho Primary              44,497     0.7     1.6     0.3       9.2
Debarwa Oxide                      163      -       -      1.6       8.2
Debarwa Transition                 428      -       -      2.5      17.0
Debarwa Supergene                  888     2.5     0.2     1.0      22.9
Debarwa Primary                    514     1.9     4.0     1.1      25.4
Adi Nefas Primary                1,682     1.6     8.2     2.8      96.5
Gupo Oxide                         399      -       -      1.9        -
Gupo Sulfide                        66      -       -      2.4        -
Total Probable                  51,723
------------------------------------------------------------------------
Total Proven and Probable       56,584
------------------------------------------------------------------------ 
-****- 
The mineral reserves listed in Table 5 were created for Emba Derho, Debarwa and
Gupo by generating Net Smelter Return (NSR) values (revenue minus royalty and
smelting/selling costs) for each metal using Measured and Indicated Resources
only.  The net revenue of each block was compared to total cost.  Each mining
block becomes economical and is included in the processing schedule if it is
above the total combined cost of processing, general administrative and
applicable transport. 
In the case of the Adi Nefas underground mine the mineral reserves were
generated through a sequential process of NSR calculation, stope optimization,
stope design, and development design.   Stope optimization was applied using
Snowden's Stopesizor software which modifies the resource to reflect minimum
mining width for the NSR. The outcome is a set of blocks that reflect this
recoverable resource. Unplanned dilution was added to the model through adding a
fixed width of over break waste into the planned stopes. 
The mineral reserve listed in Tables 5 was generated from the Measured and
Indicated resource after the application of the economic cut-off grades for each
rock type, open-pit design, external dilution and recovery parameters. 
Social and Environmental Studies 
Social and environmental baseline studies and stakeholder engagement programs
are well advanced on all four deposits that are included in the Study. This work
has been completed to comply with the Equator Principles and the International
Finance Corporation Performance Standards for Social and Environmental Impact
Assessment 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 will lead to the publications of a Social and Environmental Impact
Assessment (SEIA). It is expected that the SEIA will be completed and submitted
to the government in September 2013. 
Project Location and Access 
All four deposits included in the Study are located within a 30 minute drive on
paved roads from the capital city of Asmara with close proximity to power, water
and an international airport. In addition, the Red Sea port city of Massawa is
approximately 120 kms east of Asmara via paved road. 
Project Opportunities 
Opportunities to further enhance the economic value of the Asmara project will
be investigated during an early phase of detailed engineering as part of
Engineering, Procurement and Construction, Management (EPCM). 
Sunridge will investigate opportunities to optimize process rates with existing
equipment and increase value in the process schedule while reducing operating
and cash flow risks. 
Sunridge will continue to explore and evaluate other deposits and targets in the
vicinity. 
Feasibility Study Report 
The Asmara Feasibility Study is NI 43-101 compliant and was completed by lead
engineering company SENET under the direction of David Chambers, P.Eng (MBA) and
approved by Neil Senior, P.Eng. with support from Snowden Group Inc. on mine
design and mine planning  and work by Knight Piesold Ltd. on water and waste
management. Blue Coast Metallurgy Ltd. directed metallurgical test-work. The
report will be filed on the Company's profile on www.sedar.com within 45 days of
this press release. 
Qualified Person 
The Asmara feasibility study results were reviewed by SENET under the direction
of Study Manager, David Chambers, an Independent Qualified Person 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. 
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 and exploration properties in
Madagascar.  Sunridge currently has approximately 175 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"
Michael Hopley, President and Chief Executive Officer
 For further information contact: 
Greg Davis, VP Business Development
Email: greg@sunridgegold.com
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. 
To view the graphic associated with this release, please click on the following
link:
http://www.usetdas.com/pr/sunridge0516graphic1.jpg 
To view this press release as a PDF, please click on the following link:
http://www.usetdas.com/pr/sunridgegold05162013.pdf 
Source: Sunridge Gold Corp. (TSX-V SGC)  http://www.sunridgegold.com
Maximum News Dissemination by FSCwire. http://www.fscwire.com 
Provider ID: 00021630
-0- May/16/2013 11:06 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.