Vancouver — Globe-trotting
Lundin Mining agreed to buy just under 10% of Sunridge through a non-brokered private placement of 3.15 million units priced at $1.66 per unit, for gross proceeds of $5.2 million. Each unit consists of one share and one share purchase warrant. Assuming all warrants were exercised, Lundin would hold about 18% of Sunridge’s outstanding shares.
Sunridge president Michael Hopley says the alliance will allow his company to advance its Eritrean projects, collectively known as the Asmara project. The project covers more than 1,100 sq. km of the Pre-Cambrian Nubian-Arabian shield, north, south and west of the capital city of Asmara.
Sunbridge is exploring several key projects at Asmara. A 25,000-metre diamond and reverse circulation drilling program is currently testing the high-grade Adi Nefas Gossan zinc-gold-copper volcanogenic massive sulphide (VMS) project, the high-grade copper-gold Debarwa VMS deposit, the Gupo gold deposit, and several other priority projects.
Highlights from recent drilling at Adi Nefas include the following:
q 7.85 metres grading 3.9 grams gold and 147.52 grams silver per tonne, 5.5% copper and 10.05% zinc;
q 10.6 metres of 3.16 grams gold, 96.08 grams silver, 2.23% copper and 10.68% zinc;
q 9 metres of 11.91 grams gold, 285 grams silver, 3.18% copper and 11.05% zinc;
q 5.25 metres of 10.81 grams gold, 239.8 grams silver, 6.77% copper and 6.77% zinc; and
q 7.8 metres grading 4 grams gold, 135.44 grams silver, 1.12% copper and 5.62% zinc.
The Debarwa copper-gold project is an advanced stage copper-gold project, and conceptual studies are under way to fast-track development of the deposit.
Armed with funds from the Lundin financing, Sunridge plans to continue an aggressive drilling program using four rigs to advance its key projects to production. The company holds an option to earn a 70% interest in the Asmara joint venture, with the balance held by an Australian partner.
Lundin Mining is focused on base metal projects in Europe. Its main asset is the Zinkgruvan mine situated about 2,000 km southwest of Stockholm, Sweden. The underground mine has been producing zinc, lead and silver since 1857, and ranks in the lowest cost-quartile of zinc mines in the world.
The company also operates the Galmoy zinc mine in Ireland, which produces about 80,000 tonnes zinc in concentrates, 20,000 tonnes lead in concentrates, plus significant silver.
Through a 95%-held subsidiary, Lundin also owns the Storliden zinc-copper mine in the Skellefte district of northern Sweden, along with exploration projects in several areas of the Scandinavian nation.
President Karl-Axel Waplan says Lundin Mining will offer its technical and financial expertise to Sunridge as the company advances the Asmara project in Eritrea. He notes that the project “represents an excellent, low-risk opportunity to participate in the exploration and advancement of some of the most exciting VMS prospects I’ve seen in some time — not since our own Storliden high-grade VMS project.”
Lundin Mining has other alliances with companies exploring base metal projects in underexplored jurisdictions. Last summer, the company announced it would spend A$4.5 million (US$3.4 million) to acquire a 19.9% toehold interest in an Australian company hoping to develop a large zinc-lead-silver deposit in central Iran’s Yazd province.
The Australian company has rights to a majority interest in the Mehdiabad deposit, which has been described as one of the largest undeveloped zinc-lead-silver deposits in the world. The remaining interest is held by the government of Iran and private interests.
The project has sizable resources and a feasibility study, but various licences will be required before mining could proceed under the terms of a joint venture with the Islamic Republic of Iran.
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