Sunridge Moves Toward Production On Its Huge Eritrea Property

By Ted Niles and Kevin Michael Grace

The African country of Eritrea is starting to enjoy its peace dividend, and Sunridge Gold Corp is one of the Canadian juniors that will benefit thereby. “It’s a dream to work and operate in Eritrea,” says Vice President of Business Development Greg Davis. Its long and costly wars of independence with Ethiopia now over, political stability has returned to the small Red Sea nation, which can now develop what Davis calls “some of the highest copper grades you will see anywhere in the world.”

Sunridge’s management has extensive experience in Eritrea, over 35 years combined. Earlier in his career, Greg was a Project Manager there for Nevsun Resources Ltd. Nevsun had its first gold pour in December at its Bisha Mine, which has a 10-year plan to produce 1.06 million ounces of gold, 9.4 million ounces silver, 734 million pounds copper and 1.08 million pounds zinc. Other TSX companies operating in Eritrea include Chalice Gold Mines Ltd and NGEx Resources Inc. Beijing Donia Resources Co Ltd is also active.

Sunridge’s Asmara Project is extensive too: 800 square kilometres. “We first began working in Eritrea in 2003,” Davis says. “Since then we’ve drilled about 150,000 metres, spending just shy of $30 million. We’ve established four deposits so far.” Debarwa, Adi Nefas and Emba Derho are VMS; their combined 43-101 resources are 1.05 million ounces gold, 31.2 million ounces silver, 1.28 billion pounds copper and 2.5 billion pounds zinc. The fourth deposit, Gupo Gold, has an inferred resource of 189,000 ounces gold.

Recent assay results have been outstanding. Highlights from February 3 include 5.72% copper and 2.13 grams per tonne gold over 31.9 metres, 11% copper and 4.19 g/t gold over 9.3 metres, 16.22% copper and 3.22 g/t gold over 13.5 metres, 14.9% copper and 2.15 g/t gold over 16.7 metres and 11.22% copper and 1.75 g/t gold over 25.5 metres. January 19 saw 13.14% copper and 4.0 g/t gold over 22 metres and 22.28% copper over 5.6 metres.

“It’s the same kind of geology as the Bisha Deposit,” Davis reports. “It has a gold oxide cap from surface down to about 30 metres, a supergene copper zone from about 30 metres down to about 60 metres and then primary sulfides from 60 metres open at depth. We began in November a feasibility study on the Debarwa VMS deposit. As part of that study, we’re looking at what we call the DSO Zone, which is approximately 18% to 20% copper.”

Sunridge intends to jump-start its operations by direct shipping Debarwa copper. “It’s tailor-made for a little company like us to get into production,” Davis says. “However, most of our value is in the northern deposit, which contains the large Emba Derho VMS deposit, which is 62.5 million tonnes in the current indicated resource.”

A contract for a prefeasibility study of Adi Nefas, Emba Derho and Gupo Gold was awarded February 7. Both studies are scheduled to be completed by October. Five drill rigs will be in operation as Asmara by early Spring.

Davis declares, “The outlook for the project is excellent. These VMS deposits in Eritrea are very prolific, and we still have a lot of exploration outside to go. We can get into production with fairly low capital costs. Emba Derho would have much larger capital costs, but we feel that we would be able to raise the money to build the mine.” Sunridge has a current cash position of $26 million, and has recently discovered a potential VMS copper-zinc-gold VMS deposit in Madagascar.

Despite the similarities between Sunridge and Nevsun, the former’s market cap is only $138 million, while the latter’s is $1.25 billion. But Davis sees a big future. He concludes, “You’ve got the full support of everyone in the country. The perception [about Eritrea] is something that’s been keeping the share price of Nevsun and us and other operators down. I think that’s about to change with operations beginning at Bisha.”