This morning Sunridge announced very impressive results from the recent drill program at the Kodadu Gold target on the Asmara Project. All 21 holes of the program were released and all but 4 of them hit significant near surface gold mineralization including these highlights:

• KD-002-R 51m of 1.71g/t Au from 0 to 51m
• KD-003-R 31m of 1.77g/t Au from 0 to 31m
• KD-004-R 22m of 1.66g/t Au from 17 to 39m
• KD-010-R 14m of 1.04g/t Au from 12 to 26m
• KD-016-R 33m of 1.15g/t Au from 46 to 79m

Sunridge is now completing a NI43-101 resource estimate on the gold zone defined by this drilling and once complete, Kodadu should be the 6th resource on the Asmara Project. The goal of the exploration work at Kodadu is to rapidly define a resource that could be mined as feed to a central gold plant near the large Emba Derho deposit.

I stress that these are the kind of gold numbers that would be touted as huge success to a new exploration company. In Sunridge’s case, these merely represent a little gravy compared to the large copper-zinc-gold deposits they already have.

Feasibility Study – Completion April/May 2013.

Sunridge Management also tells me that the Bankable Feasibility Study (BFS)on the 4 advanced deposits (Emba Derho, Debarwa, Adi Nefas, and Gupo) is on track for completion within 2 months. We can expect significant improvements to PFS (which showed an NPV -10% discount of $555 million) and the mining plan is shaping up as follows:

• Year 1 – mining of 16% Cu direct shipping ore (DSO) from Debarwa
• Year 1 – heap-leaching of surface gold material from the Gupo Gold deposit and the gold caps from Emba Derho and Debarwa (and now perhaps Kodadu)
• Year 2 mining of 3 – 4% Cu supergene copper production
• Year 3 full production to be achieved – first 8 years average annual production:

- ±70 million lbs. (32,000 t) copper

- ±140 million lbs. (64,000 t) zinc

- ±31,000 oz gold

- ±1 million oz silver

The completion of the BFS will be a huge milestone for Sunridge and they will then apply for a mining license on the Asmara Project.

In my hearts of hearts (which is highly bias), I believe this stock would be 5x-10x higher if it was located In Canada versus Eritrea. The discount is way over done and hopefully once the BFS is out we can see a significant re-rating.

Posted in A Grandich Company Base Metals Canadian Stocks Copper Exploration Shares Gold Mining Shares Precious Metals Silver Sunridge Gold by Peter Grandich.