I asked Sunridge Gold “How has the recent market action impacted your company and what’s your outlook going forward”
Michael Hopley, Sunridge President and CEO:
Sunridge has been fortunate that we financed in late 2012 and therefore we will be able to complete our Asmara Project bankable feasibility study (BFS) and apply for a mining license without having to raise more money in the market.
The BFS is now only a few weeks away from completion and we are expecting the study to demonstrate very strong economics for the project. Furthermore, the mining plan will include a staged-start up process in order to achieve early cash flow and minimize initial capital costs – a very important component of the project given the current market conditions. This will enable the project to begin production in 2015 and then reach full production within 3 years.
When the BFS is complete Sunridge will move into a new stage and we expect to have a range of non-dilutive financing options available to us i.e. debt, off-take royalty and streaming as well as government participation.
The current market conditions have been difficult mainly in terms of the share price. We have been able to keep the project development rapidly moving forward toward production. We feel we have a very strong mining plan and we will be producing a significant amount of copper, zinc, and gold in the very near future.
Recently a Sunridge news release outlined the new mining plan in the BFS. This staged approach minimizes the capital outlay for the project so that each stage will pay for all or most of the next stage. The first stage can start within two years for a capital outlay of ±$80 million as follows:
- Phase 1A: DSO production – Mine by open-pit, crush, ship and sell high-grade copper and gold material as “direct shipping ore” (“DSO”) material from the supergene copper zone at Debarwa over a 10 to 12 month period; this zone contains 116,000 tonnes at 16.0 % copper, 3.0 g/t gold, and 77.0 g/t silver;
- Phase 1B: Gold production – Gold heap-leach process plant at Emba Derho to recover gold and silver from the near surface ‘gold caps’ at Emba Derho and Debarwa as well as the gold-only Gupo deposit over a period of 36 to 48 months;
- Phase 2: Copper production – Mine and process 2.4 million tonnes of high-grade copper supergene ore (less the DSO zone) at a rate of 5,500 tonnes per day (2 million tonnes per year) from Debarwa and Emba Derho for 15 months at the same time as Phase 1B is in production; and
- Phase 3: Copper and zinc production – Mine and process primary copper and zinc ore at full production from Emba Derho, Debarwa and Adi Nefas at a rate of 11,000 tonnes per day (4 million tonnes per year) for 13 to 15 years.