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COVER_Turkey2014.indd 1
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26/11/2014 11:05
TURKEY
Turkey’s gold runs deeper
Snapshot: Turkey
Key mines helping to transform the country’s minerals sector
financial performances by the operators in
the face of declining gold prices and less
impressive contributions from other parts of
their growing production bases.
Similarly, they have been shining economic lights for Turkey as its previous strong
development run faltered and negative
global headwinds checked mining investment.
Kişladağ, Turkey’s largest gold mine, was a
discovery made by Eldorado in the late 1990s
during a regional grassroots exploration programme. Ongoing exploration in the district
is aimed at defining and testing potential satellite deposits, and identifying other por-
Staff reporter
T
he significant Kişladağ and Çöpler
gold mines have not only been business cornerstones for their majority
owners, Eldorado Gold and Alacer Gold, respectively, in recent years, they have also created a robust platform for Turkey’s mineralsector expansion in future years.
Amid gold sector turbulence and Eldorado
and Alacer’s corporate transitions following
mergers, the mines have underpinned sound
Above: Alacer Gold’s Çöpler operation is set to
tap deeper, higher-grade sulphide ore
• Population: 74.93 million (2013)
• Life expectancy at birth: 75
• Adult literacy: 94%
• GDP (current US$): 820.2 billion
• GDP growth (annual %): 4%
• Inflation, consumer prices
(annual %): 7.5%
• Total reserves (includes gold,
current US$): 131 billion
• Access to electricity (% of
population): 100%
• Internet users
(per 100 people): 46.3
• Mobile phone subscriptions
(per 100 people): 93
Sources: World Bank; World Energy Council
Editorial
Richard Roberts E [email protected] T +44 (0)20 7216 6089
CONTENTS
Turkey’s gold runs deeper
Key mines helping to transform the country’s minerals
sector
Turkey mineral projects at a glance
Quick profiles on Turkey’s existing and emerging
mining ventures
Pilot likes view in Turkey
Low-flying gold price won’t trouble robust projects,
says junior company chief
Red rabbit out of a hat
Ariana maintains the steady pace of its exploration
Head of production / designer Tim Peters
Senior sub editor Jim Adlam Sub editor Woody Phillips
Editorial enquiries T +44 (0)20 7216 6060 F +44 (0)20 7216 6050 www.mining-journal.com
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November 2014
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Mining Journal special publication – Turkey
3
26/11/2014 11:39
TURKEY
phyry centres in the surrounding region.
The 3.6Moz Çöpler deposit has been
Alacer’s bulwark as it digested and then
discharged poorly-performed Australian
assets that came out of its merger-birth (from
Avoca Resources and Anatolia Minerals).
At one stage forecast to produce 160,000180,000oz in 2014, after yielding 271,063oz
in 2013, Çöpler is now expected to end
2014 with 200,000-225,000oz gold product-
ion at all-in costs of US$730-780/oz.
“The merger between Anatolia Minerals
and Avoca Resources unfortunately did not
live up to expectations,” Alacer has said. “The
poor operating performance of the Australian assets, coupled with the declining gold
price environment since the time of the
merger, had been a distraction from the outstanding operating performance of the
Çöpler gold mine in Turkey.
Above: Kişladağ,
Turkey’s largest gold
mine, has been
a standout performer
for Eldorado Gold
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Mining Journal special publication – Turkey
pages_Turkey_2014.indd 4
“Çöpler
would be …
one of the
lowest-cost
gold mines
in the world
during 2014
and
differentiate
Alacer as a
gold
company
providing
high-margin
returns”
“The disparity between our low-cost Çöpler
Gold Mine and our high-cost Australian
mines resulted in an unbalanced asset portfolio that muddied Alacer’s investment case.
This was one of the key reasons we made the
strategic decision to sell the Australian assets
and focus our efforts on Turkey.
“[The] company undertook many transformational changes during 2013 in order to
ensure the business is focused on delivering
value from its Turkish assets.”
At forecast production and operating-cost
levels, Çöpler would be “one of the lowestcost gold mines in the world during 2014 and
differentiate Alacer as a gold company providing high-margin returns”.
A definitive feasibility study evaluating the
treatment of sulphide ore via whole-ore pressure oxidation (POX) completed in 2014
highlighted the future potential of deeper
reserves at Çöpler, also indicated by more
than 1.3Mt of sulphide ore added to stockpiles in 2013, with an average gold grade of
4.94g/t; the grade “significantly higher than
was predicted by the resource block models”.
Following the anticipated receipt of required
permits in early 2015, construction of a sulphide ore processing facility is planned to
start in Q2, 2015.
Alacer has been active in Turkey since 1996
and holds a significant land position, primarily in partnership with Lidya Mining. Lidya is
part of Çalık Holding AŞ, a multi-billion-dollar
Turkish conglomerate that is enthusiastic
about Turkey’s mineral potential.
All Alacer’s exploration projects are within
the Tethyan Metallogenic Belt in Turkey,
widely acknowledged to have excellent mineral potential. The Anatolian region has provided various minerals since antiquity, but
modern exploration is generally still at an
early stage.
Çöpler is an epithermal gold-silver-copper
deposit, 550km east of Ankara and 120km
southwest of the city of Erzincan. The deposit
is centred on a composite diorite to monzonite porphyry stock that has intruded into the
surrounding metasediments and limestonemarbles. Crossing these units are two main
parallel east-northeast striking faults with
smaller northeast/northwest striking faults
between them, providing a permissive environment for the hydrothermal mineralisation.
Alacer’s exploration licences surrounding
the Çöpler deposit cover most of a 15km by
25km area.
Eldorado Gold is targeting a US$90 million
expansion of Kisladag to a 20Mt/y heap-leach
operation by mid-2016. The operation produced 222,085oz at total cash costs of
US$454/oz in the first nine months of 2014.
The company’s high-grade Efemçukuru
underground operation in Izmir Province in
western Turkey produced 78,841oz at
US$562/oz in the nine months to September
November 2014
26/11/2014 11:39
TURKEY
Eldorado Gold is targeting a US$90 million
expansion of Kisladag to a 20Mt/y heap-leach
operation by mid-2016
“Both of Eldorado’s Turkey
mines have long lives on
current reserves and the
company is an active
explorer in the country”
30, 2014, with its average 8.54g/t head grade
contributing to the low-cost structure.
Efemçukuru uses gravity circuits followed by
flotation to produce a flotation concentrate
and a gravity concentrate.
The high-quality deposit, also discovered
by Eldorado in the 1990s, is an intermediate
sulphidation epithermal gold deposit hosted
within Upper Cretaceous phyllite and schist
at the western end of the Izmir-Ankara Suture
Zone.
Both of Eldorado’s Turkey mines have long
lives on current reserves and the company is
an active explorer in the country.
A 2013 examination of Turkey’s attractiveness for mineral investment by international
legal firm Norton Rose Fulbright said the
country held 2.5% of the world’s industrial
mineral resources and produced some 50 different metals and minerals that were commercially viable for exploitation.
“Healthy commodity prices and changes in
the Turkish investment regime, together with
new mining laws enacted in 2005 and 2010,
have resulted in an increase in mining and in
mineral exploration activity in the country
with a particular emphasis on copper, gold,
nickel and zinc,” NRF said.
“Regulations and procedures have been
streamlined and laws governing the economics of mining joint ventures with foreigners
have been improved. These more favourable
laws combined with the market value of Turkey’s known mineral resources (estimated at
US$2.5 trillion) have created an attractive
prospect for foreign investors.” Mining represented about 4% of Turkey’s GDP.
November 2014
pages_Turkey_2014.indd 5
Turkey mineral projects
at a glance
Quick profiles on Turkey’s existing and emerging mining ventures
Nadav Shemer
Project: Altıntepe
Commodity: Gold
Ownership: Stratex International (AIM) owns
45%, Turkish company Bahar owns 55% and
is developing project under joint-venture
agreement.
Location: Near the town of Fatsa, close to the
Black Sea in northern Turkey.
Geology: Predominantly a high-sulphidation
epithermal gold deposit hosted within an
advanced argillic lithocap over an area of at
least 8km2 and has an in-house JORC compliant resource of 593,131oz, of which 491,426oz
is oxide and transition material.
Status: Bahar has completed the feasibility
study and has commenced clearing the
Çamlik East zone ready for construction of
the open-pit plant, and construction of the
leach pad and processing plant.
The Çamlik zone will be the first zone to be
developed with first gold pour expected in
late 2014. The zone is expected to yield more
than 120,000oz Au, grading 1.34 g/t, plus
some lower-grade material, over a 40-month
period. The yield will be in the order of 90%
“Çayeli is the largest
underground base metals
mine in Turkey. It
produced its first
concentrate in 1994 and is
expected to operate until
at least 2019”
giving production of around 3,000oz/mth.
Capital expenditure is expected to be in the
order of US$38 million.
It is anticipated the additional zones will be
brought into production at a later date using
the same plant.
Latest: Stratex recently announced that construction is expected to be completed before
the end of 2014 and first gold pour is anticipated in the March quarter of 2015.
Project: Çayeli
Commodity: Copper-zinc
Ownership: First Quantum Minerals (TSX).
Eti Holding A.S., wholly owned by the Turkish
government, holds the operating licence
for the property and has leased it to First
Quantum subsidiary Çayeli Bakir Isletmeleri
A.S.
Location: Rize province, near the Black Sea
coast in north-eastern Turkey.
Geology: The sharp relief of the area is due to
the mountain ranges occupying the southern
part of the region. Here, the Kaçkar Mountains trend in a SW-NE direction. The mine
site is in the centre of a densely populated
area, which is covered almost entirely by tea
plantations.
Status: Çayeli is the largest underground
base metals mine in Turkey. It produced its
first concentrate in 1994 and is expected
to operate until at least 2019.
Production in 2014 is expected to be
27,000-29,000t of copper and between
38,000t and 42,000t of zinc.
Throughput is expected to remain at 2013
levels but grades are expected to decline
slightly as more low-grade ore from the footwall areas is mined.
Mining Journal special publication – Turkey
5
26/11/2014 11:39
Asikoy
TURKEY
ISTANBUL
Altintepe
Project: Çöpler
Commodity: Gold
Ownership: Alacer Gold (TSX) owns 80% and
Lidya Mining, a private Turkish company,
owns 20%.
Location: Some 6km southwest of the town
of ĺliç and 550km east of the capital Ankara, in
Erzincan province, central-eastern Turkey.
Geology: Çöpler is an epithermal gold-silvercopper deposit, centred on a composite diorite to monzonite porphyry stock that has
intruded into the surrounding metasediments and limestone-marbles.
Crossing these units are two main parallel
east-northeast striking faults with smaller
northeast/northwest striking faults between
them, providing a permissive environment
for the hydrothermal mineralisation.
Status: Open-pit mining at Çöpler is a typical
drill, blast, load haul operation which is
undertaken by a Turkish contractor, Çiftay
İnşaat Taahhüt Tic AŞ. Mining of the Manganese Pit started during 2010 and mining of
the Marble and Main Pits began during 2012.
The Manganese Pit has provided the
majority of ore to date. However, the majority
of ore is planned to be sourced from the Main
Pit from the second half of 2014. The company expects to end 2014 with 200,000225,000oz gold production at all-in costs of
US$730-780/oz.
Latest: In June, the company released results
of ongoing resource reconciliation study for
the mine, announcing probable mineral
reserves of 57.9Mt at 2.1g/t gold, containing
3.8Moz.
ANKARA
Sahinili
Agi Dagi
Dere
Ergama
Halilaga
Yenipazar
Cukuralan
Ovacik
Kaymaz
Kisladag
ELT
B
YRY
PH
Efemcukuru
AN
HY
TET
R
PO
“Çöpler is an epithermal
gold-silver-copper deposit,
centred on a composite
diorite to monzonite
porphyry stock that has
intruded into the
surrounding metasediments
and limestone-marbles”
Project: Efemçukuru
Commodity: Gold
Ownership: Eldorado Gold (TSX/NYSE)
Location: Izmir province, western Turkey
Geology: Efemçukuru is an intermediate sulphidation epithermal gold deposit hosted
within Upper Cretaceous phyllite and schist at
Turkey
the western end of the Izmir-Ankara Suture
Zone in south-west Turkey.
The host rocks are locally silicified to hornfels and cut by moderately N- to NE-dipping
faults that are exploited by rhyolite dykes and
epithermal veins.
Two major veins host mineralisation, Kestanebeleni and Kokarpinar, with the former
containing the bulk of the ore. Vein mineralogy is variable but primarily consists of
quartz, rhodonite (commonly replaced by
rhodochrosite), adularia and sulphide assemblages including pyrite, galena, chalcopyrite
and sphalerite. Spectacular, high-grade
banded crustiform-colloform textures characterise the veins in addition to multi-stage
breccias that were likely the result of shallowlevel boiling. Most of the gold is very fine (2.5
to 50 microns), occurring as free grains in
quartz and carbonate, and as inclusions in sulphide minerals.Lower-grade mineralised
stockworks occur peripheral to the ore shoots,
and are most strongly developed in hangingwall rocks.
Status: Produced 90,818oz gold in 2013 at
cash operating cost of US$580/oz. In 2014,
expected to produce 90,000-100,000oz at
US$575-590/oz.
Latest: Announced possible expansion from
current 400,000t/y crushed ore to 500,000t/y;
decision is to be taken on completion of a
detailed cost-benefit analysis.
Project: Ergama
Exploration team at Pilot’s TV Tower
6
Mining Journal special publication – Turkey
pages_Turkey_2014.indd 6
Commodity: Gold/copper
Ownership: Aegean Metals Group [TSX].
Teck Resources exercised a one-time back-in
right on May 28, 2013, and is now required to
invest US$1.275 million in exploration at
Ergama within three years in order to earn-in
to a 51% interest in the property.
November 2014
26/11/2014 11:39
Cayeli
tepe
Hot Maden
Mastra
Tac
Derekoy
Mollahara
nipazar
y
TURKEY
Cerattepe
Cöpler
Cevizlidere
Ergani
Graphic: Aegean Metals Group
Location: Edge of the Kazdag mountain
range, south of Gokceyazi village, Balikesir
Province, western Turkey.
Geology: Exploration activities completed to
date at Ergama indicate that the prospect has
the potential to host a high-sulphidation epithermal gold system with similar characteristics to those observed elsewhere in the Biga
peninsula.
Detailed rock chip and soil sampling programmes completed by the company’s geologists over the central portion of the Ergama
property confirmed the gold anomalous
areas that had been identified by previous
explorers such as Eurogold and Newmont.
Two geophysical surveys completed over the
main target area at Ergama – a ground magnetics survey and induced polarisation (IP)
survey – allowed Aegean’s geologists to gain
an improved understanding of the geological/structural setting, with the IP survey
identifying a number of sub-horizontal, nearsurface resistivity anomalies interpreted to
represent the hydrothermal silica caps that
overlie the main gold mineralised zone.
Chargeability anomalies outlined by the IP
survey at depth were interpreted to be indicative of sulphide minerals commonly associated with gold mineralisation.
“An initial 14-hole drill
programme has been
designed to test the
highest-priority targets at
Ergama. An application
for a drill permit for
Ergama was submitted to
authorities (through Teck
Madencilik) and is
awaiting approval”
Project: Hot Maden
Commodity: Gold/copper
Ownership: Aegean Metals Group (TSX).
Lidya Madencilik has the option to earn-in to
a 70% interest in return for a US$3 million
expenditure commitment over a 48-month
period.
Location: Eastern Pontides, 130km northeast of regional centre Erzurum in Artvin
province in north-eastern Turkey.
Geology: An initial surface rock-chip sampling programme returned long intervals of
significant gold and copper mineralisation
from road cuts that cross-cut the central portion of the Hot property. Since that date,
exploration activities at Hot have focused on:
Making big discoveries in a promising
region is a matter of science, and the
prudent investment of time and capital.
We have been making big discoveries
in Turkey since 2004, and our successes
continue at Halilağa and TV Tower.
Status: An initial 14-hole drill programme has
been designed to test the highest-priority targets at Ergama. An application for a drill (forestry) permit for Ergama – a requirement for
all mining companies that intend to execute
drill programmes on government-owned land
– was submitted to authorities (through Teck
Madencilik) and is currently awaiting approval.
Latest: In August, Aegean reported that it
received a report on exploration work from
operator Teck. Field activities at Ergama have
been restricted to: a) additional geological
mapping on key outcrops; b) silt and rock chip
sampling (14 samples and 47 samples, respectively); and c) a further 14.2 line kilometres of
IP, distributed in four E-W-trending lines
spaced 200m apart and designed to extend
Aegean’s existing grid 800m to the south.
November 2014
pages_Turkey_2014.indd 7
www.pilotgold.com
Mining Journal special publication – Turkey
7
26/11/2014 11:39
TURKEY
“In August, Aegean
reported that Lidya had
initiated field activities at
Hot Maden, with field
crews having already
been mobilised to
undertake additional
geological mapping and
rock-chip (channel)
sampling”
a) detailed geological mapping of the central
portion of the Hot property, with a clear
emphasis on defining the styles of mineralisation present; and
b) follow-up rock chip sampling within the
central portion of the property, together with
additional rock chip and soil sampling along
both the northern and southern extensions
to the known mineralisation. Historical data
for the Hot property were retrieved from the
Turkish MTA and have been incorporated
into the database.
Status: Drill target definition work is ongoing
at Hot, and includes additional geological
mapping, rock chip sampling, and ground
geophysics.
Latest: In August, Aegean reported that
Lidya had initiated field activities at Hot
Maden, with field crews having already
been mobilised to undertake additional geological mapping and rock-chip (channel)
sampling.
Project: Kirazlı and Ağı Dağı
Commodity: Gold
Ownership: Alamos Gold (TSX/NYSE)
Location: Ağı Dağı is 50km southeast of the
city of Çanakkale and Kirazlı is 25km northwest of Ağı Dağı in the Biga Peninsula,
Çanakkale province, northwestern Turkey.
Geology: Both deposits are epithermal, highsulphidation, disseminated gold systems,
hosted within Miocene undifferentiated
heterogeneous volcanic assemblage of
dacitic to andesitic composition.
They are associated with a large hydrothermal alteration zone that covers more
than 10sq km.
Gold mineralisation is closely associated
with silicic and advanced argillic alteration
occurring near the upper contact of the volcanic sequence.
Drilling at the Deli zone of Agi Dagi
Status: A positive pre-feasibility study (PFS)
was completed on Ağı Dağı and Kirazlı in
2012 with both projects contemplated as
stand-alone open-pit, heap-leach operations.
Under the PFS, Kirazlı is expected to produce
an average of 99,000oz of gold at total cash
costs of $515/oz (inclusive of royalty) over a
five-year mine-life. Ağı Dağı is expected to
produce an average of 143,000oz/y of gold at
total cash costs of $611/oz (inclusive of royalty) over a seven-year mine-life. The nearby
Çamyurt deposit was not incorporated into
the PFS though significant capital spending
on infrastructure that is expected to benefit
the economics of the Çamyurt project was
included.
Latest: In August, Alamos Gold reported that
it has received the final signatures approving
the Environmental Impact Assessment (EIA)
for its Ağı Dağı gold project. The company
continues work on amending the EIA for the
Kirazli project to include an assessment of the
potential cumulative impacts of proposed
projects in the region while awaiting a positive resolution of the legal process.
A ruling on the interim relief remedy
requested by the company from the High
Court is expected before the end of 2014.
Gold production from Kirazli, the first of the
company’s Turkish projects, is expected
within 18 months of receipt of the outstanding forestry and operating permits. With
about US$390 million in cash, no debt and
strong ongoing cash flow generation, the
company expects to fund development of
these projects internally.
Project: Kişladağ
Alacer’s Çöpler gold mine, one of two economic porphyry gold deposits in Turkey
8
Mining Journal special publication – Turkey
pages_Turkey_2014.indd 8
Commodity: Gold
Ownership: Eldorado Gold (TSX/NYSE)
Location: Uşak province, western Turkey
November 2014
26/11/2014 11:39
Eldorado is a leading low cost gold producer
with mining, development and exploration
operations in Turkey, China, Greece, Romania
and Brazil.
Eldorado’s success to date is based on
a low cost strategy, a highly skilled and
dedicated workforce, safe and responsible
operations, and long-term partnerships
with communities where it operates.
Through its Turkish subsidiary Tüprag,
Eldorado operates two gold mines in
western Turkey: Kişladağ and Efemçukuru.
Together these produce just shy of
400,000 ounces of gold per year.
Kişladağ is the largest gold mine in Turkey
and is Eldorado’s flagship operation.
Kişladağ Mine
Kişladağ is a low-grade, open-pit, heap-leach operation.
> 2014 Poured 2 millionth ounce of gold
> 2014 Expansion from 12.5 Mtpa to 20 Mtpa
underway; completion targeted mid 2016
> 2006 Commercial production
> 2003 Completed feasibility study
> 1997 First drill test of deposit
Efemçukuru Mine
Efemçukuru is a high-grade, underground operation.
> 2014 Cost benefit analysis underway for possible
expansion from current 400 Ktpa to 500 Ktpa
> 2011 Commercial production
> 2007 Completed feasibility study
> 1992 Deposit discovered while carrying
out reconnaissance work
eldoradogold.com
Eldoradoindd.indd 1
TSX: ELD | NYSE: EGO
18/11/2014 14:44
TURKEY
Geology: Porphyry gold deposit that formed
beneath a coeval Miocene volcanic complex
in Western Anatolia. At least four latite intrusive phases are recognised in the deposit.
Alteration consists of a potassic core with
K-feldspar, biotite, quartz and locally magnetite, outwardly overprinted by illite, kaolinite,
quartz, and tourmaline.
Remnants of a quartz-alunite lithocap are
found near surface. Gold mineralisation
occurs within zones of quartz-pyrite stockwork and disseminations. Oxidation extends
to a depth of 20 to 80 metres but there is no
supergene enrichment.
The mineralised intrusions at Kişladağ are
enclosed within volcanic and volcaniclastic
strata that overlie basement schist and gneiss
of the Menderes Massif Core Complex. These
strata dip outward from the deposit core, and
display rapid facies changes from massive
lavas and coarse poorly stratified units proximal to the porphyry centre, to finer wellstratified volcaniclastic strata that interfinger
with lacustrine sedimentary rocks in surrounding sedimentary basins.
Status: Largest gold mine in Turkey. Lowgrade, bulk-tonnage, open-pit operation that
uses heap leaching for gold recovery. Produced 306,182oz gold in 2013 at operating
cash cost of US$338/oz. 2014 forecast:
300,000-335,000oz at US$470-485.
Latest: Received approval of supplementary
EIA for the expansion to 35Mt/y. Announced
plans to proceed with an updated Phase IV
expansion from 12.5Mt/y to 20Mt/y crushed
ore; completion forecast for mid-2016.
Project: Red Rabbit
Commodity: Gold, silver
Ownership: Ariana Resources (AIM) owns
73.5%, Turkish partner Proccea Construction
owns remainder and must contribute US$8
million to receive 50% equity.
Location: Red Rabbit comprises the Kiziltepe
Eldorado Gold’s Efemcukuru vineyard project
and Tavsan Sectors, located approximately
75km apart and northeast of the city of Izmir
in western Turkey.
Geology: In October 2014, Ariana began a
ground magnetic survey over the Kiziltepe
Sector JV licences (totalling 50km2). The geophysical survey was undertaken by the Ariana field team utilising two backpack
magnetometers with continuous readings
undertaken along N-S-orientated lines
spaced 200m apart. Data collection is largely
complete and initial data processing is now
under way. The company aims to provide a
further update on the detailed results of the
geophysical programme in due course.
Status: The financial model for mine development is based on the Kiziltepe Sector
alone.
There is significant potential for Ariana to
substantially increase the global resource,
both enhancing the economic fundamentals
and extending mine life, across both Kiziltepe
and Tavsan. The target is to keep the Kiziltepe
plant running in excess of 10 years through
further discoveries. As such, the Tailings Storage Facility (TSF) has been designed with a
capacity of 15 years. Ariana can sell resources
into the JV at 3X exploration cost within the
Red Rabbit AOI (excluding JV licences). Ariana holds under licence all major prospective
areas within the Sindirgi gold corridor, the
mineralised trend running from Kiziltepe
through to Tavsan.
Latest: Ariana’s drilling has confirmed the
presence of a mineralised sub-volcanic porphyry at the Kepez prospect in the Kiziltepe
Sector of the Red Rabbit project.
Porphyry identified from geophysics to
extend over 2km by 1.8km as part of a 5kmdiameter volcanic caldera at Kepez. Mineralisation occurs in intensely altered zones and
epithermal veins in periphery of the porphyry: rock-chip grades of up to 383g/t Ag
and 41.8g/t Au. 1.1km by 0.2km zone of
quartz-sulphide mineralisation cuts across
the porphyry and carries grades of up to 0.1
to 0.5 g/t Au.
Aldridge’s Yenipazar Property
10
Mining Journal special publication – Turkey
pages_Turkey_2014.indd 10
November 2014
26/11/2014 11:40
TURKEY
Project: TV Tower
Commodity: Gold
Ownership: Pilot Gold (TSX)
Location: Adjacent to Alamos Gold’s
Kirazlı project and 20km to the northwest
of Pilot Gold and Teck Resources Halilağa
project in the Biga Peninsula, northwest
Turkey.
Geology: The property contains multiple
zones of gold mineralisation interpreted to
be nested within a large, highly-altered
volcanic centre or centres.
Many of these target areas have widespread epithermal alteration with supporting
geophysical and geochemical signatures
typical of those seen at other highand low-sulphidation gold (Kirazlı, Ağı Dağı)
and porphyry copper-gold deposits (Halilağa)
within the Biga Peninsula.
The targets defined to date are primarily
classified as either low-sulphidation epithermal gold-silver, high-sulphidation epithermal gold-silver +/- copper or copper-gold
porphyry mineralisation.
An intermediate sulphidation deposit
(Kartaldağ) exists in an inlier to the property
and occurrences of this type of mineralisation may be also present at TV Tower.
Latest: Pilot Gold recently announced a third
gold-rich porphyry discovery at TV Tower,
located 3km south of the KCD gold-silver
deposit. The new Columbaz discovery comprises high grade gold-bearing epithermal
veins overprinting a gold-copper porphyry
system.
Project: Yenipazar
Commodity: Gold, silver, copper, lead, zinc
(polymetallic VMS)
Ownership: Aldridge Minerals (TSX Venture)
Location: North of Kayseri and 200km eastsoutheast of Ankara in Yozgat province, central Turkey.
Geology: Polymetallic volcanogenic massive
sulphide body with a currently determined
strike length of at least 1,700m averaging
200m in width and about 20m in thickness at
depths between 30 and 190m.
Mineralisation at Yenipazar rarely attains
true massive sulphide levels; however, horizons containing 15-20% sulphides most commonly define areas of significant base- and
precious-metal mineralisation. The main
body of the deposit appears to be stratiform
in nature. The highest-grade zones are
formed by breccias cross-cutting mineralisation hosted in schist. These breccias can be
interpreted as related to feeder zones developed after the currently visible VMS orebody
was deposited.
Status: Aldridge has received several key
permits and licences in Turkey, including the
local permit that will allow it to conduct commercial activities in the region surrounding
the Yenipazar Property and an extension to
the Yenipazar operating licence to May 21,
2019. The company also holds an Environmental Impact Assessment Positive Decision
Certificate.
Latest: Aldridge recently awarded contracts
to Tenova Mining & Minerals (TMM) and GAP
İnşaat (GAP) for value engineering and earlyconstruction planning at its Yenipazar project in central Turkey.
It has agreed to US$45 million in financing
with Orion Fund JV, consisting of a US$10
million equity private placement which
includes participation by the company’s two
largest shareholders, and a US$35 million
bridge loan facility. It has also entered into
lead concentrate and gold offtake agreements with an Orion affiliate.
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November 2014
pages_Turkey_2014.indd 11
Mining Journal special publication – Turkey
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26/11/2014 11:40
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TURKEY
Pilot likes view in Turkey
Low-flying gold price won’t trouble robust projects, says junior company chief
Richard Wachman
endowed with nearly a dozen properties in road, but a matter of time rather than any
North America, the most advanced being fundamental flaw.”
The basics look good, he said. Both TV
ollow the contours of geologist Matt Kinsley in Nevada.
Halilaga and TV Tower are joint ventures Tower and Halilaga are a few minutes from
Lennox-King’s career since the turn of
the millennium and you will under- with Teck. In total, more than 20 former team the highway. There are deep-water ports
stand how he stumbled into the mining ex- members of Fronteer are contributing to between 50km and 100km away.
Lennox-King described TV Tower as an
Pilot Gold’s operations, and the line-up
ploration business in Turkey.
evolving gold-silver-copper district featuring
It was 2001 when the CEO of Fronteer Gold, includes 18 geoscientists and three PhDs.
What’s it like doing business in Turkey the recently discovered Columbaz Gold Zone
Mark O’Dea, asked him whether he fancied
(October 2014), and two additional porphyry
helping out at the firm’s early-stage Red Lake these days?
systems: Hilltop and the
Lennox-King said: “Well,
project in Ontario.
Valley Porphyry (June
Fronteer was the predecessor company of we were the second wave “If I think of Turkey
2014). Hilltop is centred
Toronto-listed Pilot Gold, where Lennox-King in that part of the world, El
along a 4 km-long oxideis today CEO and O’Dea is chairman. The key Dorado and Teck (in an 10 years ago and
thing to remember is that Pilot Gold inher- earlier incarnation) had compare it to now, it’s gold trend. Results from
the
Valley
Porphyry
ited from Fronteer two prospects near Galli- been to the area, but there
poli in Turkey’s northwest. To summarise, a had been no systematic a completely different include long runs of gold
job at Red Lake led to the trail to Turkey, said year-over-year exploration place. The mining and and copper mineralisation
starting at surface, with
in the area until we arrived.
Lennox-King.
grades superior to those
“If I think of Turkey 10 exploration industry
“To say I was headhunted would be generous. He [O’Dea] needed a warm body to help years ago and compare it was fairly immature in typical of many coppergold porphyry deposits.
out with some samplings. I had been on the to now, it’s a completely
Turkey in 2004”
Halilaga was said to be
circuit, working for five or six juniors along different place. The mining
the first significant copthe way, so I guess it was about being at the and exploration industry
per-gold porphyry found in western Turkey,
was fairly immature in Turkey in 2004.
right place at the right time,” he said.
“If you look at something as simple as and was estimated to be the third-largest
“In 2004, we went across to Turkey because
Fronteer had struck a deal with Teck, which metres drilled per day, a good performance gold deposit in the country. A 2012 prelimihad a couple of promising projects broadly in metric for us, the rates were fairly abysmal. nary economic assessment (PEA) identified a
We would perhaps get five to 10m of drill project with a 26% IRR and a number of operthe area where Pilot now operates.”
Those operations were sold to Alamos in core per drill, per 24 hour period, which isn’t ational advantages, including: location in an
industrial region with excellent infrastruc2010 after Teck began to sell off its gold port- great. So, poor production.
“Today on our TV Tower project we get ture, favourable terrain, low elevation, and
folio, and both are now in feasibility stage,
“so they have taken things on from where we about 45m per 24-hour period. The technol- high grades at surface.
The initial resource estimate shows an indiogy, quality and experience of people doing
began,” he explained.
Fast forward to April 2011. Fronteer was the drilling has improved quite significantly. “ cated resource of 1.665Moz of gold at 0.31g/t
Au, 1,112Mlb of copper at 0.30% Cu (168Mt)
How could things get better?
acquired by Newmont and Pilot was spun out
“Essentially it would come down to cer- and inferred resource of 1.661Moz of gold at
as an independent company with two
remaining Turkish exploration assets, Halil- tainty and transparency in permitting; that’s 0.26g/t Au, and 1,007Mlb of copper at 0.23%
aga and TV Tower. Pilot Gold was also the biggest thing. There are bumps along the Cu (199 Mt).
Now the company is about to embark on
another PEA for Halilaga. Lennox-King said
the original PEA estimated capital expenditure of US$968 million. “We anticipate the
updated study will come up at 50% or less
than that. We have had to downscale to take
account of the changing market place. And
we believe we will come up with superior
economics.”
Was Lennox-King worried about the falling
gold price?
“Not really. What we see at Halilaga and TV
Tower are projects that work down to very
low levels. In the case of Halilaga, you end up
with a robust project even with gold prices
significantly lower than today’s,” he said.
Pilot Gold is valued on the Toronto
exchange at US$81 million.
According to its third-quarter results statement, its budget for the remainder of 2014 is
fully funded and it expects to be similarly
positioned in 2015.
Pilot Gold drilling project in Turkey. The company is valued on the Toronto exchange at US$81 million
F
November 2014
pages_Turkey_2014.indd 13
Mining Journal special publication – Turkey
13
26/11/2014 11:40
TURKEY
Red rabbit out of a hat
Ariana maintains the steady pace of its exploration in Turkey
Nadav Shemer
A
riana Resources drilling has confirmed the presence of a mineralised sub-volcanic porphyry at the
Kepez prospect in the Kiziltepe sector of the
Red Rabbit project in western Turkey, which
it owns in a joint venture with local firm Proccea Construction.
The AIM-listed gold explorer said geophysics identified the porphyry as extending
over 2km by 1.8km as part of a 5km-diameter
volcanic caldera at Kepez. Mineralisation
occurs in intensely altered zones and epithermal veins in periphery of the porphyry, with
rock-chip grades of up to 383g/t Ag and
41.8g/t Au.
Zack van Coller, Ariana
Resources’ exploration team
leader, using a field portable
XRF unit on mineralised
outcrop of the Kepez prospect
within the Red Rabbit
14
Mining Journal special publication – Turkey
pages_Turkey_2014.indd 14
Managing director Kerim Sener said this
latest news proved Ariana was maintaining
its pace of exploration, while making “great
strides in terms of understanding why we’ve
got all the mineralisation we see across us in
the district.”
The Kepez porphyry, located 6km from the
planned Kiziltepe mine, will become a focus
of future drilling programmes on the project
as Ariana looks to expand its resource base
across the region, Sener said.
He said the company’s progress on Red
Rabbit was aided by its strong relationship
with the Turkish authorities. The state has
approved a mining licence along with various other incentives including support for
social insurance contributions and exemp-
“With each new mine that’s
opened, it’s got
progressively easier in
Turkey and there’s now a
much broader
understanding of the
contribution of foreign
companies”
tions from value added tax and customs
duties.
The final item needing approval before Ariana can start the construction phase is a forestry permit, which is the responsibility of the
prime minister’s office.
Earlier this year Ariana announced a US$33
million credit agreement with Turkiye Finans
Katilim Bankasi that would enable it to bring
its Kiziltepe mine into production. Proccea
has another US$4 million to spend in order to
complete its earn-in to a 50% share of the
project.
Sener called Turkey “a relatively easy place
to operate in”, and acknowledged some natural advantages, namely that he is half-Turkish and speaks the language and that local
operations are managed by a home-grown
Turkish team.
“We’ve got a couple of foreign geologists
involved on the exploration side of things,
but otherwise we run ourselves as a Turkish
company. So we’re not perceived as being
that different to other operators in Turkey.”
There is an advantage to being perceived
as a Turkish company, he said, although he
credited Newmont at its old Ovacik gold
mine in the late 1990s and early 2000s with
leading the way in showing that mining companies could win local support through community engagement and education.
“There was at that time a sort of perspective that foreign companies might come in,
chop off the top of a few hills, leave a few
holes in the ground and that’s it ... but Turkey’s broken the back of that misconception
in its own way,” he said.
“With each new mine that’s opened, it’s
got progressively easier in Turkey and there’s
now a much broader understanding of the
contribution of foreign companies.”
Ariana will stay focused on Red Rabbit until
it brings the Kiziltepe sector into production,
and then it will shift its attention to the
Tavsan sector of the project 75km away,
where it holds an estimated 215,000oz of
gold resources.
From there, Sener said Ariana would look
at developing more projects in Turkey, where
it already holds a number of other properties,
and could also use the country as a base from
which to spread out to eastern Europe, the
Balkans or the Caucuses.
November 2014
26/11/2014 11:40
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