By Sunridge Gold,
SUNRIDGE Gold Corp. (the “Company” or “Sunridge”) (SGC: TSX.V/SGCNF: OTCQX) is pleased to announce that the Asmara Mining Share Company (“AMSC”) has recently been formed in Eritrea. AMSC is the operating entity which will own and operate the Asmara copper-zinc-gold mine in Eritrea.
The Asmara Project, equipment and all Eritrean employees are now being transferred from Sunridge Gold Eritrea to AMSC.
Sunridge President and CEO Michael Hopley said “We are very happy to have completed the formation of AMSC and formalized our partnership with ENAMCO on the Asmara Project. This means that we can now rapidly push the project towards the start of Phase 1 production next year. Also, the money that we have recently received from ENAMCO puts Sunridge in a strong cash situation particularly because of our current low expenditure rate on the project.”
AMSC is owned 60% by Sunridge and 40% by Eritrean National Mining Corporation (“ENAMCO”) (30% participating and 10% free carried interest) and is governed by a Shareholders’ Agreement. AMSC has a board of directors of five, comprising three from Sunridge and two from ENAMCO. Michael Hopley, President and CEO of Sunridge has been appointed Chairman of AMSC. All future project development or exploration costs will be shared two-thirds Sunridge and one-third ENAMCO.
The Government of Eritrea established ENAMCO in 2006 for the purpose of holding government ownership interests and to promote the development of the mining industry in Eritrea.
A summary of key facts related to Sunridge, the Asmara Project and the formation of AMSC are as follows:
> ENAMCO is paying Sunridge US$18.33 million for its 30% participating interest in the Asmara Project; US$2 million was received in July, another US$1 million plus interest has just been received and a further US$2 million is scheduled to be received before the end of November 2014;
> Pursuant to the Shareholders’ Agreement, the parties have agreed that ENAMCO will contribute one-third of the expenditures on the Asmara Project retroactive to July 4, 2012, the date ENAMCO delivered its notice of intention to exercise its option. Based on Sunridge’s expenditure on the project during that period ENAMCO has agreed to fund the next US$6 million of project expenses through AMSC;
> After ENAMCO has funded the next US$6 million of project expenses Sunridge will be responsible for 66?% and ENAMCO 33?% of all future project funding; and
> With the establishment of AMSC, Sunridge and ENAMCO are jointly working on acquiring the mining license for the Asmara Project, which is expected early next year.