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Additional information

Additional	Information
Market:	TSX-V
Sector:	Gold Mining
Epic:	.SGC
News:	Latest news
Web Site:	Sunridge Gold Corp
Other Articles:	25-01-201006-01-201002-12-2009

Sunridge Gold Corp. signs $10 million exploration funding agreement

by Sam Kiri

In faltering markets it is usually hard for junior exploration companies to raise funds. Those that manage to successfully raise funds usher in confidence in their exploration strategy as well as the prospects of their projects. Canadian Venture listed Sunridge Gold Corp. (TSX.V: SGC) has signed a memorandum of understanding ("MOU") to enter into a strategic partnership with Antofagasta Minerals S.A. ("Antofagasta") whereby Antofagasta will fund US$10 million of exploration work over a 5-year period to earn a 60% interest in part of the Company's Asmara Project in Eritrea. Antofagasta is also expected to purchase common shares of Sunridge in a non-brokered private placement for proceeds of US$5 million. Antofagasta will become Sunridge's largest shareholder owning an approximate 18% interest in Sunridge.

Antofagasta is not known for entering into partnerships willy-nilly. Antofagasta is a wholly owned subsidiary of Antofagasta plc, (LSE: ANTO) which is a constituent of the FTSE-100 index, with interests in mining, transport and water distribution. The company has investments in Africa, South America and Mexico and is known for its astute mining investments such as Los Pelambres, El Tesoro and Michilla in Chile. These three projects are expected to produce approximately 447,000 tonnes of copper in concentrate and cathode and 7,200 tonnes of molybdenum in concentrate in 2009.

The exploration agreement with Antofagasta excludes the current existing Development Areas and the four defined deposits outlined to date and will therefore focus on other areas of the Asmara Project, known as the Exploration Areas, which are considered to have the potential for large new discoveries. On the Development Areas, which will remain owned 100% by Sunridge, the Company will commence its own drilling programs with the objective to expand and further develop these resources.

Those who are not very familiar with the Asmara project, the Project covers 925 square kilometres in central Eritrea, and is well surrounded by excellent infrastructure with roads, power, water and airports servicing the project area. Within the Asmara Project there are four deposits with NI-43-101 independently estimated resources, the 50 million tonne Emba Derho VMS copper-zinc-gold deposit, two advanced high-grade gold, copper, zinc, and silver (VMS) Deposits, Debarwa and Adi Nefas and one gold deposit, named Gupo. In addition, there are several high priority VMS drill targets.

The arrangement with Antofagasta leaves Sunridge on sound financial footing. Combined with its existing cash of approximately $4.5 million, Sunridge will have a stronger cash position of approximately $10.0 million upon closing of the private placement. This will allow Sunridge to aggressively conduct exploration and development programs and advance deposits toward final feasibility studies on the existing resources on the Asmara Project as well as commencing exploration on the Besakoa project in Madagascar.

Investor appetite for gold companies continues to strengthen in the face of rising gold prices. In addition to well-established mining destinations for gold, several equally promising new destinations have started to emerge. Eritrea is one such destination, where TSX (NSU) and NYSE Euronext (formerly AMEX: NSU) listed Nevsun Resources also has its operations. Readers of course are familiar with Nevsun. Sunridge is another increasingly attractive company in Eritrea.

Michael Hopley, President and CEO of Sunridge, stated that Antofagasta appears to share the Sunridge’s optimism in Asmara and its potential to discover other large base metal deposits - larger even than the Emba Derho deposit. The corporate financing by Antofagasta will permit Sunridge to continue further exploration and development of the four existing deposits, particularly Emba Derho, towards final feasibility and eventual production concluded Hopley.

About Antofagasta Minerals S. A.

Antofagasta is a wholly owned subsidiary of Antofagasta plc, which is listed on the London Stock Exchange (symbol - ANTO) and is a constituent of the FTSE-100 index, with interests in mining, transport and water distribution. Its Chilean mining operations, comprising Los Pelambres, El Tesoro and Michilla, are expected to produce approximately 447,000 tonnes of copper in concentrate and cathode and 7,200 tonnes of molybdenum in concentrate in 2009. It is currently carrying out a brownfield expansion at Los Pelambres and developing the greenfield Esperanza project in Chile, which, when operational, are expected to increase total Group copper production to nearly 700,000 tonnes per year from 2011. Antofagasta also has exploration or feasibility programs in Chile, Pakistan, Zambia and Mexico. At 30 June 2009, Antofagasta plc had net cash of US$1.8 billion and it currently has a market capitalization of US$11.3 billion.

About Sunridge Gold Corp

Sunridge Gold Corp. is a mineral exploration and development company focused on the acquisition, exploration, discovery and development of base and precious metal projects on the Asmara Project in Eritrea. Recently the Company published a positive Preliminary Economic Assessment Study on the Emba Derho copper-zinc-gold deposit. Prior to the completion of the above private placement, the Company has 62.6 million shares outstanding and approximately $4.5 million in cash.

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