Photo by: Bloomberg
TORONTO (miningweekly.com) – TSX-V-listed Sunridge Gold’s stock was on the rise on Friday after the company announced that it had struck an accord with State miner Eritrean National Mining Corp (ENAMCO) to organise and operate the Asmara Mining Share Company (AMSCo), the operating entity that would own and operate the Asmara copper/zinc/gold mining project, in Eritrea.
Sunridge would own 60% of AMSCo, with ENAMCO holding 40%, comprising a 30% participating and 10% free-carried interest.
The company would have a five-seat board, including three representatives from Sunridge and two from ENAMCO.
All future project development or exploration costs would be shared between Sunridge (two-thirds) and ENAMCO (one-third), as well as all project costs back-dated to July 2012, when the Eritrean company notified Sunridge of its intent to exercise its full option.
ENAMCO would also pay Sunridge $18.33-million in instalments before production started in return for its rights to the property, with $2-million paid immediately on signing of the shareholders agreement and another $3-million paid this year, spread out monthly, starting September 30.
The balance of $13.33-million would be paid in instalments after a finance agreement was closed that secured a significant portion of the funds required to develop the project.
“Signing the AMSCo shareholder agreement is another major milestone that we have now achieved in the development of the Asmara mine,’’ Sunridge president and CEO Michael Hopley said.
A feasibility study had indicated that full production at Asmara could be achieved within three years. In the first eight years, average yearly output was expected to total 65-million pounds of copper, 42 000 oz of gold, 184-million pounds of zinc and one-million ounces of silver.
Sunridge shares rose 8.7% to C$0.25 apiece on Friday, having gained 43.75% in value over the past six months.