Sunridge Gold (CVE:SGC) (OTCQX:SGCNF) says it has started field work on its advanced-stage joint venture Asmara project in Eritrea, and remains focused on acquiring a mining license for the property in the first quarter of next year, with sights set on near-term production.
Current exploration work is concentrated on the two "pipeline" deposits on the Asmara project, known as the Kodadu VMS deposit and the Adi Rassi copper-gold deposit. Both areas have inferred resource estimates and remain open for expansion.
The goal is to define new areas of mineralization and to direct additional expansion drilling planned for next year.
The work is being funded by the Asmara Mining Share Corporation -- a joint venture which is held 60 percent by Sunridge and 40 percent by the Eritrean National Mining Company.
Sunridge formally announced the formation of the operating entity in early October, and in exchange for ENAMCO's 40 percent stake, the Eritrean company will pay the gold developer US$18.33 million in stages prior to production. ENAMCO will also provide US$6 million to the new operating company, plus one third of all expenses going forward.
The joint venture says it remains on track for first phase copper production next year. The project, which has a three phase start-up plan beginning with high grade copper and gold, is pegged to produce an average annual rate of 65 million pounds of copper, 184 million pounds of zinc, 42,000 ounces of gold and 1 million ounces of silver over the first eight years.
Full production is expected by 2018.
Asmara is made up of six defined deposits, four of which were the subject of a feasibility study completed in May 2013, and are currently in the permitting process.
Sunridge's management has proved it can navigate development of its project through a tough market, taking its original feasibility study back to the drawing board to rejig the asset as a staged project, where low volume but high grade mining in the first stage would help pay for the capex for the larger plant required for the bulk of the mine life.
Field work at the Kodadu and Adi Rassi deposits will consist of channel and trench sampling, detailed geological and structural mapping and geophysical work such as an AMT survey to define mineralization.
Sunridge said the joint venture will also engage in early development work in preparation for building a reservoir at the mine. The abstraction weir and reservoir will be built on the nearby Mai Bela River, which will provide water to the centralized processing facility near the large Emba Derho deposit at Asmara.