By Deborah Bacal,
Sunridge Gold Corp. (CVE:SGC) (OTCQX:SGCNF) has boosted the size of its financing for the second time, with the latest increase taking the amount it will raise for its Asmara project in Eritrea to $5 million.
Earlier this month, the company increased the brokered private placement to $4 million from $3 million previously.
Under the terms of the agreement, for which Tempest Capital is acting as agent, the company will issue up to 26.3 million units at a price of 19 cents apiece.
Each unit will be made up of one common share and one share purchase warrant, with every warrant good for one additional share at a price of 35 cents each until October 18, 2017. Sunridge has also granted the agent an option to sell up to an additional 15 per cent of the number of units, or a maximum of 3.95 million units.
The proceeds will go toward the Asmara project in Eritrea, as well as for general working capital needs.
The company also said it will move to settle outstanding debts with “arm’s length parties” in the amount of $830,128 by issuing units concurrent with the closing of the private placement. It will make an application to the TSX Venture Exchange to list the shares and warrants issued under the placement, which is expected to close on October 18.
Sunridge is moving ever closer to production with the Vancouver-based exploration and development company very much focused on its flagship copper-zinc-gold-silver project in the eastern-African nation of Eritrea, making notable progress. The four advanced deposits that make up the Asmara project (Emba Derho, Adi Nefas, Gupo Gold and Debarwa) have already been the subject of a feasibility study earlier in the year that showed that mining at the project and processing of the ore near the large Emba Derho deposit is economically robust.
In recent days, the company has undertaken a social and environmental impact assessment due for completion this month, in order to make application to the government for a mining license. In addition to these efforts, negotiations are underway with the Eritrean National Mining Corporation (ENAMCO) to determine the price the government organization will pay to purchase 30 per cent of the project from Sunridge.
Discussions with potential debt financing lenders have also begun, as has an independent due diligence review — the step in advance of signing the financing agreement, when potential investors examine the project in detail before deciding to fund work on the property. The review, which is being conducted by Micon International Limited, commenced in June and is due for completion before the end of the calendar year.
The project, which has a mine life of more than 15 years, is pegged to produce a total of more than 841 million pounds of copper and 1.87 billion pounds of zinc, as well as gold and silver. Average operating costs over the life of the mine are estimated at just under $30 a tonne.
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