The Hot Maden gold and copper project in Turkey will advance to the feasibility study level, after a prefeasibility study (PFS) has confirmed the viability of mining a total of 2.6-million ounces of gold equivalent over 11 years.
The Hot Maden project, which was discovered only three years ago, is 70% owned by Turkey’s Lidya Madencilik Sanayi ve Ticaret (Lidya) and 30% by Canadian gold royalty company Sandstorm, which in 2017 paid $175-million for Mariana Resources, mainly for its interest in the gold and copper project.
The PFS outlines production of 2.03-million ounces and 122 800 t of copper over 11 years, with output averaging 200 000 oz/y gold and 12 600 t/y copper.
Assuming a gold price of $1 300/oz and a copper price of $3/lb, Hot Maden comes up with a net present value of $1.4-billion before tax and an internal rate of return of 60% before tax. The pre-tax payback period from the start of production is estimated at 1.3 years.
The capital cost estimate is $272-million, including a $32-million contingency.
The current financing plan is 65% debt financing, leaving Sandstorm’s capital contribution at less than $30-million, CEO Nolan Watson said in a media statement.
“Hot Maden was discovered only three years ago and has since made remarkable progress towards production, at a pace that few projects in the mining industry could match,” he added.
Sandstorm reports that Lidya has started the permitting process and that it is working on a gap analysis, as well as trade-off studies. A feasibility study will begin at the end of the year.