Aldridge Minerals reports ‘robust’ metrics for Turkish project

3rd April 2013 By: Henry Lazenby - Creamer Media Deputy Editor: North America

TORONTO ( – Toronto-based Aldridge Minerals on Wednesday reported “robust” metrics for its flagship Yenipazar polymetallic project, in the geographic heart of Turkey.

The company published the results of a feasibility study, which had placed an after-tax net present value of $323-million on the project, using a 7% discount. This included a 1.6% net profit royalty to the Turkish government and a 6% net profit interest (NPI) to Alacer Gold, until revenues of $165-million had been reached, whereafter a 10% NPI would apply.

The after-tax and after-NPI internal rate of return was estimated to be 22.5%, which would result in the $382-million project being paid back in 2.9 years.

"The results of the feasibility study confirm our view that Yenipazar is a highly attractive project with robust economics that validates the effort we have made to advance Yenipazar since the preliminary economic assessment of 2010.

“The strong results pave the way for the completion of additional technical work while we advance the project financing and enter the development stage in the coming months,” Aldridge president and CEO Mario Caron told Mining Weekly Online.

The study had found the proposed mine would have a strip ratio of 4.3:1 and the plant would process 2.5-million tons of ore a year over a 12 year mine life.

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, Yenipazar 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.

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

The processing characteristics of each were found to be slightly different, with the oxide zone yielding gold, silver and lead, and the copper-enriched and sulphide zones yielding gold, silver, copper, lead and zinc.

Aldridge said it would use a conventional openpit to mine the resource and it would own and operate a fleet of 90 t trucks and 10 m3 hydraulic excavators.

The shallow nature of the orebody and the flat topography of the project footprint and surrounding area allowed the company to benefit from the lower operating costs associated with conventional openpit mining methods. Operating costs for the tailings management facility had been estimated at about $11-million over the life of the project.

Mining would take place in four proposed phases to keep the strip ratio stable.

The oxide ore would be mined first, owing to it being located near surface. Caron explained this ore would be used to commission the plant, after which it would be stockpiled for processing in the final two years of the operation.

The project had probable National Instrument (NI) 43-101-compliant reserves totalling 29.16-million tons grading 0.89 g/t gold, 29.6 g/t silver, 0.3% copper, 0.96% lead and 1.41% zinc, which resulted in an estimated 840 000 oz of gold, 27.74-million ounces of silver, 191.72-million pounds of copper, 616.18-million pounds of lead and 908.88-million pounds of zinc.

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 NI 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.

The Yenipazar project is located approximately 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 with the construction of a 17 km 154 kV power line.

The Port of 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 sent by rail the remaining distance to the port.

Aldridge said it intended to submit a Turkish environmental-impact assessment (EIA) report on the Yenipazar project early in the third quarter, while it was also working on completing EIA and social-impact assessment reports to international standards.

As soon as the EIA had been submitted, the company expected to proceed to apply for operating, construction and other required permits.

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

Caron said Turkey was a mining-friendly jurisdiction and the country offered tax breaks and incentives for new miners. To this end the company expected to receive, among other benefits, a value-added tax exemption, customs duty exemption and an 80% tax reduction rate.

Caron noted all financing options were currently on the table for consideration, and he felt confident the company would raise capital for the project despite the tough market.

Other miners active in Turkey included Alacer Gold, Alamos Gold, Eldorado Gold and Inmet Mining.

Aldridge’s TSX-V-listed stock traded 3.37% lower on Wednesday at 43 Canadian cents apiece.