https://www.miningweekly.com

Despite Turkish protests, it is ‘business as usual’ for Aldridge

28th June 2013

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

Font size: - +

TORONTO (miningweekly.com) – Despite the ongoing civil protests that have rocked various Turkish cities during the past month, the country remains an attractive investment destination, and the unrest has not altered the development path for Aldridge Minerals’ flagship Yenipazar polymetallic project.

Aldridge president and CEO Mario Caron told Mining Weekly Online on Thursday that despite ongoing localised protests in the country’s largest city, Istanbul, and elsewhere in the country, the investment community was relatively confident that the activity did not pose any threat to the long-term sustainability of the country’s mining industry.

“That is not to say that we are not concerned about the general malaise in the market, but development of Yenipazar has certainly not been affected,” he said in a telephonic interview.

Protests started in Turkey on May 28, sparked by outrage at the brutal eviction of a sit-in at Istanbul's Taksim Gezi Park, protesting the park's demolition. Subsequently, supporting protests and strikes took place across Turkey protesting a wide range of concerns, at the core of which were issues of freedom of the press, freedom of expression, freedom of assembly, and the government's perceived encroachment on Turkey's seemingly well-established secularism, which was one of the fundamental pillars around which Mustafa Kemal Atatürk established the modern Republic of Turkey, in 1923.

Caron pointed to Aldridge’s most recent milestone, when it earlier this month exercised its option to earn a 100% working interest in the Yenipazar project, after it delivered a feasibility study to Alacer Gold.

He said the company was now focused on permitting the project. The company aimed to complete and submit an environmental-impact assessment report on the Yenipazar project to the Turkish authorities at the end of July, after which the review process was expected to take about three to four months.

Caron added that the company was working on completing a detailed land acquisition plan, which would study the potential impact on current landowners and income restoration strategies. This social-impact assessment report was expected to be complete in the third quarter.

Meanwhile, Aldridge also planned to apply for the appropriate operating, construction and other required permits over the next few months.

Another critical step in advancing the Yenipazar project, Caron said, would be to apply for the tax incentives the Turkish government offered to the project developer, which would account for a reduction of 40% in the project’s total capital expenditures. The company planned to submit this application before year-end.

Further, Aldridge had appointed global specialist mining corporate finance firm Cutfield Freeman & Co (CF&Co) to act as its financial adviser. CF&Co would assist Aldridge in evaluating all its financing and strategic options to finance the Yenipazar project. This included considering all financing alternatives including debt, equity, metals streaming and concentrate off-take-related financing that could be available to Aldridge.

Caron pointed out that despite the declining precious and base-metals prices, it had not yet affected the debt-carrying capacity of the Yenipazar project.

The feasibility study, which was published in April, had placed an after-tax net present value of $361-million on the project, using a 7% discount. This included a 1.6% net profit royalty to the Turkish government and Alacer’s net profit interest (NPI).

The after-tax and after-NPI internal rate of return was estimated to be 23.7%, which would result in the $382-million project being paid back in 2.8 years. Alacer would retain a 6% NPI in the Yenipazar property until operational revenues had reached $165-million, after which the NPI would increase to 10%.

Caron said he believed the global mining industry was on the cusp of seeing construction and equipment costs declining, owing to the significantly reduced demand. “In hindsight, I think we would see that we were fortunate to be able to construct a mine during this time, as we are certain to benefit from reduced costs,” he said.

Each year, the operation was expected to produce 62 642 oz of gold, 1.9-million ounces of silver, 11.2-million pounds of copper, 33.8-million pounds of lead and 56.3-million pounds of zinc. Over the life of the project, it was expected to produce about 696 482 oz of gold, 21.2-million ounces of silver, 120.1-million pounds of copper, 368-million pounds of lead and 563.8-million pounds of zinc.

The mineral reserves for the Yenipazar project comprised three different mineralisation types to be mined and processed in four phases, including oxide mineralisation, which represents 11% of total, copper-enriched mineralisation, which represents 9% of the total and sulphide mineralisation, which represents 80% of the total.

A November resource update estimated the Yenipazar resource to hold 29.69-million tons grading 0.95 g/t gold, 31.3 g/t silver, 0.31% copper, 1.01% lead and 1.47% zinc in the National Instrument 43-101-compliant indicated category. At these gradings, the project is expected to hold about 900 000 oz of gold, 29.85-million ounces of silver, 204.8-million pounds of copper, 660.2-million pounds of lead and 961.2-million pounds of zinc in the indicated category.

Once started, construction was expected to take about 21 months, followed by a two-month period of plant commissioning and production ramp-up, which would take about six months.

The Yenipazar project is located about 220 km east-southeast of Ankara, the capital of Turkey, 60 km south of Yozgat, the provincial centre, and about 120 km north-west of Kayseri, a city of one-million people. The project is well served by existing infrastructure, including paved roads and a railroad, and will be connected to the national power grid through the construction of a 17 km 154 kV power line.

Iskenderun was identified as the preferred port for the shipping of containerised concentrates and is located about 500 km to the south on the Mediterranean Sea. The concentrates would be containerised and trucked on existing roads about 75 km south-west of the project to a railhead in Himmetdede, where it would then be transported by rail the remaining distance to the port.

Edited by Creamer Media Reporter

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION