All is set to go at the Canadian Venture listed Sunridge Gold Corp. (TSX.V: SGC). Following its recent strategic partnership with Antofagasta Minerals S.A. ("Antofagasta"), Sunridge has closed a private placement with Sierra Gorda Investment Company Limited, a subsidiary of parent company Antofagasta and finalised the exploration agreement with the same.
The deal with Antofagasta makes Sunridge a distinctly attractive company. According to the agreement, Antofagasta will fund US$10 million of exploration work over a 5-year period to earn a 60% interest in part of the Company's Asmara Project in Eritrea. Within the Asmara Project there are four deposits with NI-43-101 independently estimated resources, the 50 million tonne Emba Derho VMS copper-zinc-gold deposit, two advanced high-grade gold, copper, zinc, and silver (VMS) Deposits, Debarwa and Adi Nefas and one gold deposit, named Gupo. It is important to note that the exploration agreement with Antofagasta excludes the current development areas and the four defined deposits outlined above.
Antofagasta will however focus on other areas of the Asmara Project, known as the Exploration Areas, which are considered to have the potential for large new discoveries. On the Development Areas, which will remain owned 100% by Sunridge, the Company will commence its own drilling programmes with the objective to expand and further develop these resources.
The private placement entails the issue of 13,588,750 common shares to Antofagasta at C$0.40 for gross proceeds of US$5,000,000, representing approximately 18% of Sunridge. Antofagasta will be entitled to appoint one member to the Sunridge Board of Directors and will have certain rights to participate in future financings to maintain their share interest in the Company. Given Antofagasta’s expertise in mining, a board position at Sunridge bodes well for the latter.
The arrangement with Antofagasta leaves Sunridge on sound financial footing. Combined with its existing cash of approximately $4.5 million, Sunridge will now have a stronger cash position of approximately $10.0 million upon closing of the private placement. This will allow Sunridge to aggressively conduct exploration and development programmes and advance deposits toward final feasibility studies on the existing resources on the Asmara Project as well as commencing exploration on the Besakoa project in Madagascar.
Antofagasta is not known for entering into partnerships willy-nilly and the partnership with Sunridge therefore ushers in more confidence in the Asmara project. Antofagasta is a wholly owned subsidiary of Antofagasta plc (LSE: ANTO) which is a constituent of the FTSE-100 index, with interests in mining, transport and water distribution.
The company has investments in Africa, South America and Mexico and is known for its astute mining investments such as Los Pelambres, El Tesoro and Michilla in Chile. These three projects are expected to produce approximately 447,000 tonnes of copper in concentrate and cathode and 7,200 tonnes of molybdenum in concentrate in 2009.
About Antofagasta Minerals S. A.
Antofagasta is a wholly owned subsidiary of Antofagasta plc, which is listed on the London Stock Exchange (symbol - ANTO) and is a constituent of the FTSE-100 index, with interests in mining, transport and water distribution. Its Chilean mining operations, comprising Los Pelambres, El Tesoro and Michilla, are expected to produce approximately 447,000 tonnes of copper in concentrate and cathode and 7,200 tonnes of molybdenum in concentrate in 2009. It is currently carrying out a brownfield expansion at Los Pelambres and developing the greenfield Esperanza project in Chile, which, when operational, are expected to increase total Group copper production to nearly 700,000 tonnes per year from 2011. Antofagasta also has exploration or feasibility programs in Chile, Pakistan, Zambia and Mexico. At 30 June 2009, Antofagasta plc had net cash of US$1.8 billion and it currently has a market capitalization of US$11.3 billion.
About Sunridge Gold Corp
Sunridge Gold Corp. is a mineral exploration and development company focused on the acquisition, exploration, discovery and development of base and precious metal projects on the Asmara Project in Eritrea. Recently the Company published a positive Preliminary Economic Assessment Study on the Emba Derho copper-zinc-gold deposit. Prior to the completion of the above private placement, the Company has 62.6 million shares outstanding and approximately $4.5 million in cash. Sunridge Gold Corp. trades on the TSX Venture Exchange under the symbol SGC.