October 15, 2008
Sunridge Signs Definitive Agreement for Madagascar Properties
Sunridge Gold Corp. (TSX VENTURE: SGC) is pleased to announce that it has signed a definitive agreement with Majescor Resources Inc. (TSX VENTURE: MAJ) to acquire up to a 100% interest in four properties held by Majescor in Madagascar. The main focus over the next year will be on the property known as Besakoa which is located in south-central Madagascar. This property is an extension of the same geological environment basement rocks, the Arabian-Nubian shield that also underlies the Company's Asmara Project in Eritrea where Sunridge has had great success discovering and developing large volcanogenic massive sulphide (VMS) deposits over the past four years.
A recent property visit to Besakoa showed that there are numerous gossan outcrops on the license which appear to be oxidized remnants of underlying VMS style mineralization. There has been limited exploration work done on parts of the property in the 1950s and a small drilling program by Majescor in 2006, however the property remains essentially unexplored by modern methods. Sunridge management believes that Besakoa may represent a new emerging VMS district.
The initial work program at Besakoa will consist of soil geochemistry surveys, geological mapping and prospecting, and ground gravity and electromagnetic (EM) surveys, focused on high priority airborne electromagnetic anomalies coincident with the VMS gossan showings.
The Besakoa Property
The Besakoa VMS copper-zinc-gold property covers approximately 60 square kilometres in south central Madagascar and can be accessed by road from the port city of Toliara.
The property is underlain by Neoproterozoic volcano-sedimentary shield rocks, a geological setting similar to Sunridge's Asmara Project and Nevsun's Bisha Project both located in Eritrea. A 700 metre by 30 metre gossan similar to those found on the Asmara project was discovered in the 1950s by the French Bureau de Recherches Geologiques et Minieres (BRGM). Subsequent drilling by the BRGM (19 holes) established the presence of primary sulphide mineralization underlying the gossan outcrop. The best results were 12.91m averaging 1.3% Cu and 1.44% Zn and trench samples with 15.22% Cu over 9m. Majescor drilled another 8 short holes (total of 431 meters) in 2007 to verify the BRGM drilling. The best intersection from this drilling was 21.45m with 0.51g/t Au, 21.44g/t Ag, 0.69% Cu and 1.12% Zn. However, the property has not been systematically explored and there are many gossans outcropping on the project that have not been sampled or drilled. The Company intends to make use of geological mapping, soil geochemistry and geophysics on the property as these techniques were used to discover the Company's large Emba Derho zinc-copper-gold VMS deposit within the Asmara Project and in the discovery of Nevsun's large Bisha zinc-copper-gold VMS deposit.
The agreement between Sunridge and Majescor supersedes the letter of intent executed February 15, 2008. Sunridge has an exclusive option to acquire a 50% interest in the four Majescor properties in Madagascar; Besakoa, Daraina, Analalava and Ankaramy (the "Properties"), a second option to acquire an additional 25% interest in the Properties and a third option to acquire the remaining 25% interest in the Properties.
Sunridge can acquire an undivided 50% interest in the Properties by issuing 200,000 common shares of Sunridge immediately, incur $500,000 work expenditures by August 8, 2009 and issue 300,000 common shares and incur $1,500,000 work expenditures by August 8, 2010.
Upon acquiring a 50% interest in the Properties, Sunridge will then have the right to acquire an additional 25% (aggregate 75%) by issuing 500,000 common shares of Sunridge and by incurring additional $2,500,000 work expenditures by August 8, 2011.
Upon acquiring a 75% interest in the Properties, Sunridge will have a one-year period in which to elect to acquire the remaining 25% interest in the Properties at the fair value determined at that time by an independent valuation or as agreed between the parties in cash or, at the election of Sunridge, in the equivalent value of Sunridge common shares subject to regulatory approval. Sunridge will be the operator of the exploration activities on the properties. If Sunridge acquires a 100% interest in the Properties, Majescor retains a 1% net smelter return royalty, half of which can be purchased by Sunridge for $1 million.
This island nation is a new up and coming mining jurisdiction in Africa. It has a great deal of geological diversity and is mostly under-explored. The democratic government has recently been re-elected and is strongly supportive of business and foreign investment. The mining laws are stable and comprehensible. There are at least two very large new mining projects underway in the country; Sherritt is building a US$3 billion+ nickel-cobalt laterite mine on the west coast of Madagascar and Rio Tinto is reported to be planning to spend over US$1 billion to develop a titanium sands project on the east coast. Alcan is also apparently looking to develop a large bauxite deposit on the island.
About Sunridge Gold
Sunridge Gold Corp. is a mineral exploration company focused on the acquisition, exploration, discovery and development of precious and base metal projects. The Company has 62.2 million common shares outstanding and trades on the TSX Venture Exchange under the symbol SGC. For additional information on the Company and its projects please view the slide show on our website at www.sunridgegold.com or call Don Halliday or Greg Davis at the numbers listed below.
SUNRIDGE GOLD CORP.
Michael Hopley, President and Chief Executive Officer
To view the map accompanying this release please click on the following link: http://media3.marketwire.com/docs/Besakoa.pdf
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this News Release.
Contacts: Sunridge Gold Corp. Don Halliday Executive Vice President (604) 899-1505 Email: [email protected] Sunridge Gold Corp. Greg Davis VP Business Development (604) 688-1263 Email: [email protected] Website: www.sunridgegold.com
SOURCE: Sunridge Gold Corp.