Brien Lundin, editor of Gold Newsletter on Sunridge Gold in Eritrea
Brien Lundin, editor of Gold Newsletter, recently put out a new recommendation on Sunridge Gold Corp. in his August 2014 newsletter to subscribers.
“Sunridge Gold has four advanced projects organized within its Asmara project in Eritrea and, in an interesting twist, the company has combined all four into one feasibility study.
By staging production through the four projects and having mining revenue help to fund successive stages, the feasibility study has come up with outstanding economics and fairly low capital costs to go into production.
The numbers are impressive. The project’s NPV, discounted at 10%, is $692 million with an IRR of 34%. The plan for the project envisions a three-phase start up. Phase I is slated to begin in 2015 and will have an initial capex of $46 million.
The company anticipates full production by 2018. At that point, the mines that make up the Asamara project (Emba Derho, Debarwa, Adi Nefas and Gupo Gold) are estimated to annually generate 65 million pounds of copper, 184 million pounds of zinc, 42,000 ounces of gold and 1 million ounces of silver in the first eight years of full production.
Key de-risking steps for the project have just concluded, including a shareholder’s agreement with the Eritrean National Mining Corporation (ENAMCO), along with an initial payment of $2 million to Sunridge as part of an $18.33 million payment for ENAMCO’s portion of the project.
ENAMCO will also provide US$6 million to the new operating company, as their portion of the previous exploration work, plus one-third of all expenses going forward.”
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