VANCOUVER (miningweekly.com) – Turkey-focused miner Alacer Gold has completed foreign currency forward sales contracts to limit its exposure to the volatility of the Turkish Lira (TRY), the company announced on Friday.
Alacer, which operates and owns an 80%-stake in the country’s Çöpler mine, said the hedging programme covers about 40% of the remaining sulphide expansion project capital expenditures and consigned it able to potentially reduce the overall capital cost of the $744-million project.
According to the TSX- and ASX-listed company, the programme forward sold some $130-million to buy 500-million TRY, at an average conversion rate of 3.8, with settlement dates between June and September 2018.
“As the sulphide project continues to advance and the final commercial outcomes are known, we will be able to start quantifying the foreign currency impacts. . .” the company stated in a Friday market update.
The hedge can be used in either the current continuing Çöpler oxide operations, or the sulphide project, the Toronto-headquartered miner advised.
Construction on the $744-million project started in May 2016, with the first gold pour scheduled for the third quarter of 2018. Processing sulphide ore will expand the operation, which is expected to produce between 160 000 oz and 180 000 oz of gold at total cash costs of between $500/oz and $550/oz this year, and will extend Çöpler’s mine life to 2037.
The sulphide project is now 48% complete and is on schedule, Alacer advised.
Alacer’s TSX-listed stock gained up to 3.5% to C$2.05 apiece on Friday, but is trading about 10% down since the start of the year.