Sunridge granted JV option in Asmara project
Sunridge Gold Corp SGC
Shares issued 12,288,714 Aug 19 close $0.84
Wed 20 Aug 2003 News Release
Mr. Craig Angus reports
SUNRIDGE OPTIONS SUB-SAHARA'S ASMARA PROJECT, ERITREA, AFRICA
Sunridge Gold has signed a letter of intent concerning a joint venture of
the Asmara project in Eritrea, Africa. The Asmara project comprises three
exploration licences and one application for an exploration licence.
The option
The Asmara project is the subject of an 80/20 joint venture between
Sub-Sahara Resources (Eritrea) Ltd. (SSE) and Africa Wide Resources Ltd.
(AWR). Sub-Sahara Resources NL (SSR) owns 100 per cent of the shares of
SSE. SSE, AWR and SSR are the collective optionors of the Asmara project.
Subject to regulatory approval, Sunridge has been granted an option to earn
up to a 90-per-cent joint venture interest in the Asmara project by the
optionors.
The optionors will grant Sunridge a 20-per-cent joint venture interest upon
Sunridge financing $350,000 (U.S.) of qualifying expenditures. Sunridge
financed $100,000 (U.S.) today, and $250,000 (U.S.) will be paid upon
receipt by Sunridge of regulatory approval, to be not later than Oct. 31,
2003. To retain its 20-per-cent interest Sunridge must finance a cumulative
total of $1.1-million (U.S.) by Nov. 30, 2004, or it will forfeit its
interest. Sunridge will then have 30 days to notify the optionors of its
intention to increase its joint venture interest to 40 per cent by
financing a cumulative $2.4-million (U.S.) by Nov. 30, 2005. If Sunridge
does not complete the expenditure level it will revert to a 20-per-cent
joint venture interest.
If Sunridge earns a 40-per-cent joint venture interest Sunridge can elect
on 30 days notice to increase its interest to 70 per cent by financing 100
per cent of the expenditures necessary to complete and deliver a bankable
feasibility study to the optionors with 36 months. During this three year
period, Sunridge will have the first year to exercise the call option to
purchase an effective 100-per-cent ownership of the Asmara project and the
optionors will have the same time to decide whether to exercise the put
option to sell 100 per cent of the Asmara project to Sunridge. Sunridge
will issue common shares as consideration for the exercise price of either
the put or the call option, subject to regulatory approval at that time.
The fair value of the Asmara project will be determined at that time in
accordance with either the valmin code of the Australian Institute of
Mining and Metallurgy or the Canadian equivalent.
If the call/put option is not exercised and Sunridge completes its earn-in
of 70 per cent by delivering a bankable feasibility study the optionors
will then have 180 days to elect to participate pro rata in the
expenditures required for construction and development of a mine on the
property. If the optionors do not elect to participate pro rata then
Sunridge may stay at its 70-per-cent interest or elect to increase its
joint venture interest from 70-per-cent to 90-per-cent by financing
100-per-cent of the cost of construction and development of a mine on the
property and the optionors interest shall convert to a 10-per-cent free
carried interest.
The Asmara project
The Asmara project comprises three exploration licences and one exploration
licence application covering 1,386.8 square kilometres immediately west of
the capital city of Asmara in east-central Eritrea. The licences cover
rocks of the Nubian-Arabian shield, which is a large pre-Cambrian shield
covering much of Northeast Africa.
The licence area covers numerous old mine workings yet has undergone
limited modern exploration. The project is prospective for precious metals
rich VMS (volcanic massive sulphide) deposits and structurally controlled
or sheared gold deposits. Numerous discoveries and previous small-scale
past-producing mines exist within the concession areas.
Parts of the exploration licence areas were previously worked by the
Ethio-Nippon Company (early 1970s) WMC (Overseas) Pty. Ltd. (1996), BRGM --
La Source (1996-1997) and Phelps Dodge Exploration Corp. (1997).
Several significant zones of mineralization exist on the concessions,
namely the Debarwa copper/gold deposit, Adi Nefas Zinc & Gold Deposits and
the Medrizien Colonial gold mining areas.
Management has identified Eritrea as a country with immense geological
potential yet relatively unexplored by modern geological, geochemical and
geophysical methods. The potential to produce new projects has recently
been demonstrated by the high-grade gold-copper discovery of Nevsun
Resources Ltd. Bisha project in west-central Eritrea. Nevsun have reported
that Bisha is a precious-metal-bearing volcanogenic massive sulphide
system. Bisha appears to belong to a similar style of VMS deposit as does
Sub-Sahara's Debarwa deposit located within the Asmara project.
The Debarwa copper gold deposit
Located immediately southwest of the capital city of Asmara, Debarwa is a
VMS-style copper-gold deposit similar in style and type of mineralization
to Nevsun's Bisha project in west Eritrea. The main body of mineralization
of the existing Debarwa Deposit consists of three zones, the gossan zone at
surface underlain by a zone of supergene enrichment with high-grade copper,
gold and silver underlain by a zone of primary sulphides. Significant
potential lies along strike from the known deposit which presently covers a
strike length of 1.5 kilometres.
Recent diamond drilling by Sub-Sahara has returned some high-grade copper
intercepts such as: hole DEBD-005 grading 13.5 per cent copper over 21
metres (including 27.87 per cent copper over 8.16 metres), DEBD-006 grading
14.4 per cent copper over 9.06 metres (including 18.14 per cent copper over
6.34 metres), and hole DEBD-007 grading 11.74 per cent copper over 9.75
metres (including 14.23 per cent copper over 6.34 metres).
Gold assay results from seven of nine diamond drill holes recently
conducted by Sub-Sahara are listed below. These holes were drilled to test
the top 50 metres of the Debarwa VMS deposit. The remaining two holes from
this program will be released as available. The first four holes were
assayed for copper but as with deposits of this type, the copper content is
depleted. The copper assays from holes DEBD-005 to DEBD-007 are listed
above.
Hole From To Length Gold
(m) (m) (m) (g/t)
DEBD-001 1.5 19.50 18.50 2.96
Including 6.89 6.07
DEBD-002 1.0 10.00 9.00 3.15
DEBD-003 0.0 5.00 5.00 4.01
DEBD-004 14.0 18.00 4.00 0.79
DEBD-005 31.0 50.00 19.00 3.86
Including 4.00 8.20
DEBD-006 29.0 34.00 5.00 2.62
And 35.0 45.00 10.00 1.12
DEBD-007 36.0 54.75 18.75 3.18
Including 40.0 52.00 12.00 4.41
The known Debarwa deposit was discovered in 1955, but received limited work
until the early 1970s when the Ethio-Nippon Co. drilled and then completed
a vertical shaft into the orebody to a depth of 240 metres as well as other
predevelopment activities, including the shipment of a trial copper
concentrate.
In 1996, WMC spent $981,000 (U.S.) to reinterpret all previous data and in
1997 Phelps Dodge was granted the licence covering the deposit area. Phelps
Dodge drilled 12 diamond drill holes totalling 1,944 metres.
DEBARWA RESOURCE SUMMARY
Mineral type Tonnes Copper Gold
(mm) (%) (g/t)
Gossan
(oxide) 1.34 0.00 4.36
Open pit
(supergene
and primary) 1.65 4.80 1.15
Underground 0.87 5.13 1.49
Total 2.52 4.91 1.27
In 1999, Phelps Dodge calculated a resource summary estimate for Debarwa
with total resource (supergene and primary) of 1,654,420 tonnes at 5.10 per
cent copper and 1.40 grams per tonne gold using cutoff grades of 1.0 gram
per tonne gold, 0.5 per cent copper equivalent, and 2.5 per cent copper
equivalent for the leached (gossan), supergene and primary zones.
Zone Tonnes Width Copper Gold
(m) (%) (g/t)
Gossan 468,700 - - 3.50
Main zone
supergene 490,813 20 8.07 1.42
Main zone
primary 745,137 10 5.36 1.54
Footwall
zone
supergene 215,108 9 0.77 0.75
Footwall
zone
primary 203,362 6 1.60 1.56
Total
resource
(supergene
and
primary) 1,654,420 15 5.10 1.40
Additionally, Phelps Dodge calculated a further "inferred resources" for
the southern extension of the main mineralized zone. Phelps Dodge assigned
a tonnage of 1.289 million tones to this inferred resource but did not
assign a grade.
The following are results of several previous drill results from the
Ethio-Nippon core holes that intersected the supergene zone:
Hole Length Copper Gold
(m) (%) (g/t)
1 15.6 13.1 2.2
23 27.0 12.5 4.2
27A 11.5 13.0 3.9
56 16.0 14.6 -
57B 5.0 15.8 -
58A 16.0 17.3 -
59A 15.0 19.4 -
Examples of previous drill results in the Debarwa primary zone are as
follows:
Hole Length Cu Zn Pb Au Ag
(m) (%) (%) (%)(g/t)(g/t)
DEB 011 12.4 5.5 1.7
DEB 012 13.0 4.4 2.2
DEB 013 11.0 1.94 8.92 0.32 1.74 31
DEB 014 3.1 2.85 0.40 0.01 0.20 10
And 2.0 0.91 9.37 0.13 0.65 28
DEB 015
DEB 016
DEB 017 6.0 8.05 0.14 0.29 0.55 185
DEB 018 1.0 3.34 0.65 0.01 0.60 17
DEB 019 15.0 9.44 0.45 0.01 0.33 22
DEB 028 1.0 14.39 0.07 0.02 0.10 26
DEB 064
DEB 03 9.4 9.82 0.40 0.01 0.19 14
The exploration potential along strike to the north and south is excellent.
The mineralized horizon is known to extend for at least 400 metres to the
north of the Debarwa main zone and for at least one kilometre south of the
main body. This style of mineralization (VMS) normally occurs in clusters
both in the near vicinity (down dip or immediately along strike) of known
orebodies or else in close proximity.
Sunridge/Sub-Sahara plan to undertake a thorough evaluation of all previous
data and conduct an aggressive program of exploration to determine this
project's full potential.
The Adi Nefas exploration licence
The Adi Nefas exploration licence is located immediately north of Asmara
and is known to host two mineral deposits. Work by BRGM-La Source (1998) on
the Adi Nefas Doop gold deposit culminated in the reporting of a "possible
reserve" of 292,000 ounces gold contained in "2,929,157 tonnes grading 3.12
grams per tonne." This resource is calculated to 100 metres vertical depth
even though drilling only penetrated to 60 metres vertical depth and
requires infill drilling to validate the depth extension. As a result the
potential to expand the resource is considered good.
This licence also contains the Adi Nefas zinc/gold deposit located about
one kilometre along strike from the Adi Nefas Doop gold deposit. Both
deposits appear to lie within the same stratigraphy and structure. The
following are examples of previous drilling:
Hole Length Cu Zn Pb Ag
(m) (%) (%) (%) (g/t)
1B 13.50 7.09 13.83 0.45 280
3 5.65 1.29 8.56 0.55 1,600
And 2.80 4.64 15.20 2.20 100
4 7.75 0.80 6.44 0.43 100
5 13.00 0.77 5.58 0.15 100
6 9.30 1.23 15.38 0.93 200
7 19.00 3.30 2.32 0.07
It is likely that a resource could be calculated based on the work to date
on the Adi Nefas zinc/gold deposit, however, it is unlikely that it would
meet the JORC code and therefore more work is required to test the full
potential of this area.
The Medrizien exploration licence
The Medrizien licence covers the core of the old Hamasian Goldfield and
most of the more substantive former Italian gold mines are contained within
the licence. The mineralization on the licence can be recognized as two
styles, a VMS style similar to Debarwa and Nevsun's Bisha project, and
structurally controlled gold mineralization similar to other greenstone
belts.
The reported gold mineralization exploited is largely contained within
sulphidic quartz veins that can be traced on surface for around two
kilometres. Mining widths were reported at around 2.5 metres and in situ
mining grades were frequently reported as being between about 10 and 30
grams per tonne. This prospect is considered to have excellent potential
for moderate to large tonnages of mineralized material that could be
extracted by open pit technologies. The Medrizien prospect is considered an
immediate target for systematic drilling.
The management of Sunridge Gold is very pleased to enter into this
agreement with Sub-Sahara Resources. These projects have the potential for
significant growth of high-grade deposits through the usage of modern
exploration methods.
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