Developing Copper, Zinc and Gold Deposits in Eritrea

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December 2010
Developing Copper, Zinc and Gold
Deposits in Eritrea, East Africa
Sunridge Gold – Highlights
The Asmara Project in Eritrea hosts four deposits, three of which, Emba Derho,
Adi Nefas and Debarwa, have combined TSX 43-101 approved Indicated
resources totaling:
• 1.28 billion lbs (580,000 tonnes) copper
• 2.5 billion lbs (1,130,000 tonnes) zinc
• 1.05 million oz gold
• 31.8 million oz silver
In addition a fourth deposit, the Gupo Gold deposit, contains an Inferred
resource of 189,000 ounces of gold.
2
Sunridge Gold – Highlights
• Feasibility underway at Debarwa. Option to mine and direct ship 18-20%
copper material being studied. Estimated capital cost of “DSO” mine ~$15
million
• Prefeasibility Study on Northern Deposits (Emba Derho, Adi Nefas, Gupo,
and overlap on Debarwa) deposits early in 2011
• Definition drilling begun at Debarwa. Expansion drilling to start at Emba
Derho and Adi Nefas in January 2011
• Expansion drilling scheduled for late 2010/early 2011 at Adi Nefas and
Debarwa
• “De-riskification” of region continues – Bisha Mine on track for commissioning late 2010
• Discovery of potential new VMS district in Madagascar – drilling to begin in
spring 2011
• Well funded to complete all studies and exploration work over next couple of
years – over $28 million in treasury
3
Eritrea and the Asmara Project
38°E
Eritrea
Zara
Red Sea
16°N
Bisha
Hambok
Asmara Projects
Massawa
Asmara
ERITREA LOCATIONS
Sunridge Gold VMS/Gold Projects ~ 800 sq km
Other VMS/Gold Projects
4
Eritrea
• Population approx 4 million, largely subsistence agriculture
• Asmara considered one of the most beautiful and safest cities in Africa
• Mining code based on Northern Territory, Australia
• Business conducted in English
• Asmara Project located on excellent infrastructure; paved roads, grid power,
rail and road to Port of Massawa, and good water supply for future mining
operations
5
Eritrea – New World Class VMS and Gold Mining District
Changing landscape of Eritrea – “De-riskification”:
6
•
Nevsun’s Bisha Mine scheduled for commissioning in Q4
2010 and production in Q1 2011
•
Enamco (government mining company) has completed all
their jv financial requirements to date with Nevsun
•
Majors enter Eritrea with Antofagasta Minerals, Lundin
Mining, and Thani Ashanti signing jv and/or option
agreements
•
Barrick Gold – looking for opportunities
Asmara Project – Three Main Focus Areas
Debarwa Copper-Zinc-Gold VMS
Deposit:
- 100% Sunridge Owned
- New! Updated resource estimate underway
- New! Feasibility has begun
Northern Projects:
- Emba Derho, Adi Nefas, and Gupo Gold
- 100% Sunridge Owned
-Positive Scoping Study Complete at Emba
Derho
-Coming! Prefeas/Feasibility Studies 2011
Antofagasta-Sunridge Exploration Area:
-Antofagasta funding exploration drilling on
new targets
7
Debarwa Deposit
Feasibility Study now underway at Debarwa
copper-gold-zinc Project with objective of fast
tracking to production by direct shipping of high
grade copper material (18-20 % Copper).
100% Sunridge Owned
Highlights of copper-gold intercepts in the copper
supergene zone:
•
•
•
•
•
•
D-005 20.36 % Cu, 2.18 g/t Au
D-019 21.27 % Cu, 2.29 g/t Au
D-021-D 20.59 % Cu, 1.96 g/t Au
D-022-D 19.31 % Cu, 5.80 g/t Au
D-036-D 20.87 % Cu, 1.99 g/t Au
D-044-D 20.19 % Cu, 2.18 g/t Au
over 13.00 m.
over 9.80 m.
over 11.30 m.
over 7.0 m.
over 11.00 m.
over 6.05 m.
Debarwa high-grade copper-zinc-gold
VMS deposit – 100 % Sunridge Owned
8
Debarwa Deposit
North
Direct shipment material (18-20% Cu)
open
open
open
1.4 km
Debarwa Indicated Resources*
Cut Off
Million
Tonnes
Au g/t
Ag g/t
Cu%
Zn%
Oxide
0.5 g/t
Au
2.442
1.71
13.79
0.12
0.09
Supergene
1% Cu
1.336
1.54
33.87
5.36
0.08
Primary
1% Cu
0.699
0.87
22.31
2.53
3.23
Zone
Totals
4.477
* Resource Estimate by MSA Geoservices (Pty) filed on SEDAR
March 4,2008
9
Debarwa Deposit: Section 99965N
DEBD-002
DEBR-023-D
10m @ 24.97 g/t Au
20.1m @ 15.30% Cu, 9.69 g/t Au
9m @ 3.15 g/t Au
Gossan / Leached
Zone
elev 1900m
17.16m @ 8.53 g/t Au
Supergene Zone
17m @ 12.33% Cu, 1.85 g/t Au
elev 1850m
16.7m @ 8.02% Cu, 1.61 g/t Au, 35.81 g/t Ag
15.12m @ 4.42% Cu, 8.23% Zn, 2.00 g/t Au
Primary Zone
elev 1800m
18m @ 3.96% Cu, 5.48% Zn, 1.37 g/t Au
10
Debarwa Project – Study Participants
• Feasibility Study awarded to SENET\AMC Consultants on the
Debarwa Project, with completion (Final Draft Report) forecast
in October 2011.
• Tailings Facility design by Knight Piésold; including water and
hydro-geological studies.
• Blue Coast Metallurgical will design and supervise test-work and
prepare flow-sheet(s) design.
• Lions Gate Geological responsible for geological model and
resource estimate.
• Ongoing environmental baseline studies and social engagement
program by Sunridge, Knight Piésold, and Global Consultants.
11
Debarwa Feasibility Study Schedule
• Feasibility Study awarded to SENET/AMC.
Study commenced November 2010
• November 2010 - Commenced 4,000 m drilling
for metallurgical and structural analysis, resource
definition and expansion
• February 2011 - Final resource model
• May 2011 - Metallurgical parameters and flowsheet criteria
• June 2011 - Mine design and production schedule
complete
• June 2011 - Decision to fast-track direct ship ore
• August 2011 - Finalized process plant design
• September 2011 - Preliminary Draft Report
• October 2011 - Final Report
• Completion of SEIA by late 2011
12
Northern Deposits
• Northern Deposits include 3 deposits 100 % Sunridge Owned:
Emba Derho – 62.5 million tonnes indicated resource containing 996
Mlbs Cu, 1,907 Mlbs Zn, 574,000 oz Au, 20 M oz Ag
Adi Nefas – 2.7 Mt (indicated) resource at 1.4%Cu, 8.4% Zn, 2.9 g/t
Au, 99.3 g/t Ag
Gupo Gold - 189,000 Oz (inferred) at 2.99 g/t Au
• Positive Scoping Study at Emba Derho demonstrates strong economic
potential with open pit mining plan
• Gold exploration potential at Medrizien Gold Target located 500
meters from Emba Derho
• Prefeasibility for Northern Deposits to commence February 2011
• Ideally located 15 km from Asmara on excellent infrastructure
13
Northern Deposits
14
Emba Derho 43-101 Resource
Wardrop, September 17, 2008
Summary of Indicated Mineral Resource
Zone
Cutoff
Million
Tonnes
Copper
%
Zinc
%
Au g/t
Ag g/t
Gold Oxide
0.2
g/t
Au
3.510
-
-
0.84
5.14
Zinc-rich
1.0%
Zn
20.545
0.28
2.35
0.39
12.13
0.5%
Cu
38.425
1.02
0.99
0.18
9.31
Copper-rich
Total
15
62.48
Emba Derho 43-101 Resource
Wardrop, September 17, 2008
Total Contained Metal at Emba Derho
Zone
Cut-off
Million
Tonnes
Mlbs Cu
Mlbs Zn
KOz
Au
MOz Ag
Gold
Oxide Cap
0.2 g/t
Au
3.510
5
3
94.8
0.58
Zinc-rich
Primary
1.0%
Zn
20.545
127
1,065
258
8.0
Copperrich
Primary
0.5%
Cu
38.425
864
839
222
11.5
996
1,907
(450,000
tonnes)
(865,000
tonnes)
574.8
20.1
Totals
16
62.48
Northern Deposits – Emba Derho
Ideal for open pit mining
17
Emba Derho 43-101 Resource Model
18
Emba Derho Scoping Study – Base Case
Completed June 2009 by Wardrop UK – Base Case Study:
19
•
Open pit mining at 4 M tonnes per year for 10.4 years (42 Mt out of 62
Mt) - potential mine life extension
•
Base Case IRR - 21.6%
•
Initial estimated capital costs - US$331.8 M, sustaining capital US$67.3
M
•
Base Case NPV -US$203.9 M at 10% discount rate pre-tax
•
Produce 200,000 t of Cu & Zn concentrates annually containing 55,000
t Zn, 25,000 t Cu, 20,000 oz Au & 0.6 m oz Ag
•
Total operating costs - US$21.19/tonne milled
Scoping Study – Sensitivity to Metal Prices
SENSITIVITY TO METAL PRICES
Base Case Prices
5 Year Average
2 Year Average
Price
US $
203.9
323.8
%
21.6
27.7
Pre-tax Payback
Years
4.0
3.2
Mine Life
Years
10.4
10.4
Copper
US $ lb
2.50
2.95
Zinc
US $ lb
1.00
0.95
Gold
US $ oz
650.00
835.00
Silver
US $ oz
11.00
14.00
Pre-tax NPV @ 10%
IRR
METAL PRICES
Historical average metal prices sourced from London Metal Exchange as of June/09
20
Emba Derho Optimization
Wardrop - opportunities for improving Emba Derho economics:
•Include 95,000 ozs Au @ 0.84 g/t from Oxide Gold Zone in pre-feasibility study
•Include Adi Nefas and Gupo Gold will be included in Prefeasibility Study
•Medrizien, compelling gold target , is located 500 meters away from Emba
Derho and could add surface gold resources
•4,000 meters drilling at Gupo and 1,000 meters in initial drill program for
Medrizien, fall 2010
•Steepen pit slope. A generic shallow pit slope (45 degrees) was used in scoping
study
•Removal of ~20% internal waste with DMS system
21
Emba Derho Optimization
22
Northern Deposits – Adi Nefas
Adi Nefas and Gupo Gold are within 6 km of Emba Derho and
will be included in future prefeasibility/feasibility studies at Emba
Derho:
Adi Nefas:
–
high grade zinc-copper-gold VMS deposit.
INDICATED RESOURCES *
Zone
Cut
Off
Million
Tonnes
Au
g/t
Ag g/t
Cu%
Zn%
Primary
2%
Zn
2.73
2.85
99.30
1.39
8.38
* Resource Estimate by MSA Geoservices (Pty) filed on SEDAR
March 4,2008
23
Northern Deposits – Gupo Gold
Gupo Gold Deposit:
•189,000 ounces gold grading 2.99 g/t gold
in inferred category
•Gold cyanide extraction tests returned 95%
to 98% gold recovery
•Gupo has the potential to be a low cost
open pit gold mine which could contribute
to start up operations for the northern
deposits
•5,000 metre drill program to planned to
upgrade resource to indicated category,
determine continuity of deposit and test for
extensions
24
Northern Deposits – Medrizien Gold
Medrizien Gold Prospect:
•Located 500 meters from Emba Derho Deposit on 100% Sunridge Owned
ground
•Gold mineralization varies from 5 metres to 25 metres in thickness over 3.5
kms strike length
•65 rock grab samples taken over the strike length of the prospect, with 10
samples over 1.0 g/t Au averaging 12.13 g/t Au, highest assay being 74.7 g/t
Au
•8 rock samples taken from old underground workings range from 0.14 g/t
Au up to 319 g/t Au with an average of 51.32 g/t Au
•Initial drill program to commence December 2010
•Potential to add near surface resources to future mining operations at Emba
Derho
25
Northern Deposits – Prefeasibility
Prefeasibility scheduled to begin on Northern Deposits early
2011:
•Study to assess Emba Derho, Debarwa, Adi Nefas as a group
•Study to include Gold Oxide cap at Emba Derho
•Trade off studies to include Debarwa, currently in Feasibility
•Study to consider steeper pit walls and DMS at Emba Derho
•To include upcoming drilling to expand Adi Nefas, Gupo, and
initial drilling at Medrizien Gold prospect
26
Antofagasta – Sunridge Exploration Area
• Antofagasta Minerals S.A. signs strategic alliance agreement for US$10 M
in exploration expenditures over five years for a 60% interest in the
Exploration Area (October 2, 2009)
• Antofagasta invested US$5 M in private placement at $0.40 per share
• Sunridge will be operator until a total of US $7 M has been funded by
Antofagasta
• Antofagasta may earn an additional 15% for a total of 75% interest by
completing a feasibility study on any project within the Exploration Areas
• Exploration work funded by Antofagasta is ongoing on new highly
prospective targets
27
Adi Rassi Copper-Gold Prospect
Adi Rassi:
•
a potentially large new copper
and gold zone discovery, July
2010
•
Drilled over 500 meters along
strike to date, zone remains
open
Drill Highlights include:
Adi Rassi
28
28
•
AR-002D: 84 metres grading 1.32
g/t gold and 0.84% copper
•
AR-003D: 25 metres grading 0.75
g/t gold and 0.54% copper
•
AR-004D: 78 metres grading 0.22
g/t gold and 1.0% copper
Madagascar – Besakoa Project
A New Emerging VMS District:
• Similar to the initial exploration data
collected at both the Asmara Project and
Nevsun’s Bisha Project in Eritrea
• Coincident surface gossans, strong soil
and gravity anomalies, airborne EM
conductors
• Identified on the project which represent
the surface expression of VMS systems
• Over 10 strong copper, zinc, gold, and
lead geochemical anomalies between 1
and 4 kilometres in length
• Numerous large (longer than 1
kilometre) strong gravity anomalies,
coincident with elevated base and
precious metal values
• Initial drill program planned for early
2011
29
Madagascar – Besakoa Project
30
SGC - Share Structure November 2010
Symbol:
Shares outstanding:
Options: wt. avg = $1.25
Fully diluted shares:
Current cash:
Market cap.
Antofagasta Mineral S.A. (Sierra Gorda Inv. Comp):
Lundin Mining:
SGC/TSX.V
116,684,500
9,238,500
155,849,465
CDN$28 million
Approx. $135 million
11.6%
7.4%
www.sunridgegold.com
31
SGC – 5 Year Chart
32
Sunridge Gold Management
Michael Hopley
–
President/C.E.O.
David Daoud
–
Exploration Manager
Scott Ansell
–
VP Project Development
Don Halliday
–
Executive Vice President
Doris Meyer
–
CFO & Director
Greg Davis
–
VP Business Development
Amanuel Arafine
–
Eritrean Country Manager, Eritrea
Note: over 35 years combined experience in Eritrea
33
Sunridge Board of Directors
34
Michael Hopley
–
President/C.E.O. & Director
Doris Meyer
–
CFO & Director
Craig Angus
–
Director, Chairman
Ricardo Muhr
–
Director (VP - Mineral Resources
Antofagasta Minerals S.A.)
Neil O’Brien
–
Director (Senior VP Lundin Mining)
Stephen Gatley
–
Director (GM, Lundin Mining)
Mark Corra
–
Director (CFO of B2 Gold)
Eric Edwards
–
Director
Summary
• Exploration and development work on Asmara Project focused on 3 distinct areas:
1. Debarwa – Feasibility now commenced. Focusing on direct shipment of high
grade copper (18-20% Cu) material
2. Northern Deposits - Prefeasibility to begin 2011 Positive scoping study at Emba
Derho with strong IRR and NPV, Drilling at Adi Nefas, Medrizien, Gupo Gold,
Adi Nefas to begin December 2010,
3. Exploration Areas – Exploration drilling continuing on several targets
• Discovery of potential new VMS district in Madagascar – drilling to begin in spring
2011
• Management team has over 35 years of experience in Eritrea
• Excellent project infrastructure and strong government support
• Sunridge remains well funded
• Nevsun on schedule to begin mining at Bisha Q1 2011
35
Regulatory Notes
All of Sunridge Gold’s exploration programs and pertinent disclosure of a
technical or scientific nature are prepared by, or prepared under the direct
supervision of Michael J. Hopley, CPG, Sunridge Gold’s President and CEO,
who serves as the qualified person (QP) under the definitions of National
Instrument 43-101.
Certain disclosures in this presentation, including management’s assessment
of Sunridge Gold’s plans and projects constitute forward-looking statements
that are subject to numerous risks, uncertainties, and other factors that may
cause future results to differ materially from those expressed or implied.
Readers are cautioned not to place undue reliance on forward-looking
statements.
36
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