Asmara Project, Eritrea

Vancouver 2014
Sunridge has been exploring for volcanogenic massive sulphide (“VMS”) base and precious metal deposits in Eritrea since 2004 and has successfully defined 4 deposits located in Central Eritrea. The four deposits; Emba Derho; Debarwa; Gupo; and Adi Nefas collectively make up the Asmara Project (the “Asmara Project”) and contain significant amounts of copper, zinc, gold and silver. The Asmara Project comprises approximately 107km2 in Central Eritrea and is located immediately to the North, South and West of the capital city of Asmara. Emba Derho is located approximately 12 km north-west of the capital city, Asmara. Adi Nefas and Gupo are located approximately 6 km and 8 km respectively east of Emba Derho and Debarwa is located approximately 45 km to the south. Sunridge is also continuing to explore new targets. Adi Rassi is a new copper-gold discovery and Kodadu is a VMS deposit 25 kilometres south of Emba Derho, each deposit having Inferred resources.
Eritrea borders Sudan to the north and west, Ethiopia and Djibouti to the south, and the Red Sea to the east. The project is in the intensively farmed mountainous central plateau at an elevation of 2,300 metres The Asmara region has an arid climate, with mean annual temperature of 15.8°C, mean annual precipitation is estimated to be 506 mm, 65% of which falls in the wet season between July and September in periodic high intensity rain events.
The Feasibility Study (FS) was completed in 2013. Following the completion of the Feasibility Study, Sunridge completed and submitted a Social Environmental Impact Assessment (SEIA) in January 2014 and draft Social Environmental Management Plans (SEMP) in March 2014. Sunridge is now in a position to apply to the Government of Eritrea for conversion of the ELs in to a Mining License. Under the laws of Eritrea, a Mining License is for a maximum period of 20 years or the life of the deposit, whichever is shorter and may be renewed for a maximum period of ten years on each renewal.
Emba Derho, Debarwa and Gupo will be mined using conventional open pit truck shovel techniques. Adi Nefas is an underground mine and it is proposed that it will be mined using a professional international mining contractor. The underground mining method is long-hole bench retreat. The four mining operations will feed a central processing facility for all deposits at Emba Derho. A tailings storage facility at Emba Derho will also be required.
The FS envisages a staged start-up comprising three main phases for processing the different ore types. Supergene and primary ores will be processed by flotation and the oxide ores by cyanide leaching. The crushing, milling and tailings systems will be common for the three phases with adjustments for throughput by the use of additional equipment or operating hours as required.
The proposed staged start up in the FS is described below:
• Phase I - Gold and DSO Production (Yr 1 and 2): Mining of 3.0 million tonnes of gold oxide at a rate of 1.4 Mtpa and 116,000 tonnes of high-grade supergene copper, producing 40 million pounds of copper, 100,000 ounces of gold and 252,000 ounces of silver.
• Phase II – Supergene Copper production (Yr 2 to Yr 3.25): Mining and processing by flotation of copper ore at a rate of 2 Mtpa, producing 96 million pounds of copper, 30,000 ounces of gold and 1 million ounces of silver.
• Phase III – Primary Copper and Zinc Production (Yr 3.25 to Year 16.25): Mining and processing by flotation of copper and zinc ore at a rate of 4 Mtpa, producing 707 million pounds of copper, 1.9 billion pounds of zinc, 297,000 ounces of gold and 9.7 million ounces of silver.
Overall, the Asmara Project has focused to keep the design technically simple. Eritrea is a new mining jurisdiction with inexperienced in the human resources for mining with limited mining services available. Water supply and protection is an aspect of the project that required significant investigation to meet project demands from commissioning through to closure.
Social and environmental baseline studies are complete and stakeholder engagement programs are well advanced on all four deposits by Sunridge. The work for the SEIA complies with both Eritrean requirements (National Environmental Procedures and Guidance) and also the IFC Performance Standards and Equator Principles. The Eritrean law and the IFC standard agree on the most fundamental requirements such as compensation of assets on land, and grievance mechanism to resolve disputes. However, the main difference appears to be in the need of consultation with the affected people in relation to livelihood restoration and compensation for land acquisition. The Eritrean Law does is not clear on these issues; while the IFC Standards require them. The explanation for this could be found on the fact that land in Eritrea is of state ownership where the land is leased to the usufruct; hence he/she has no say on government land other than using it until the expiry of the lease agreement.
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