- Ariana Resources

Focus – Turkey
constructing the future
Turkish construction firms and investors are contributing to the expanding region
By keriM sener
T
RANSFORMATION is a word that is
used without exaggeration to describe
developments in the Turkish mining
industry since 2000.
Where Turkey once produced no gold,
it is now Europe’s largest producer; where once 85%
of the mining industry was in government hands with
marginal growth, now 85% is in private hands and
there was a compound annual growth rate (CAGR) of
5.8% between 2007 and 2011.
In parallel with the rapid growth of the Turkish
mining sector over the past decade, two other
significant expansionist trends are emerging. The
first is the wave of Turkish construction companies
investing in joint ventures with mining companies.
These construction firms are leveraging their own
entrepreneurialism and strong cash flows to take stakes
in the mining sector. Some are also capitalising on their
expertise building mineral processing plants worldwide.
The second expansionist trend is the involvement of
Turkish investors and mining companies in a wider
economic sphere of interest, including the Balkans and
the Caucasus, leveraging Turkey’s confidence in its
mining sector and its cultural affinities with its
neighbours.
Turkey’s activities in the geographic hinterland are
spurred by the fact that its base-metal miners cannot
meet the growing demand from its booming
manufacturing sector. The country’s companies are
proving adept at doing business in what is perceived as a
natural sphere of influence, given that the Balkans were
www.mining-journal.com
17_19, 21_24, 26MJ120511.indd 17
once part of the Ottoman Empire and that all of the
ex-Soviet Central Asian (except for Armenia, Georgia and
Tajikistan) and Caucasian states speak Turkic languages.
Often Turkish mining firms will follow in the established
footsteps of its construction companies in Central Asia.
The trend in major construction companies
branching out into the gold-mining sector began when
Calik Holding founded mining subsidiary Lidya
Madencilik in 2006. It owns 20% of Alacer Gold Corp’s
large Çöpler mine in central Turkey.
Lidya is committed to bringing other mining
partnerships on stream and aims to become one of
Turkey’s leading players in the sector. Another alliance
between an established construction company and
an experienced mining company is that between
Turkish NTF Insaat and Stratex International plc
for the development of Inlice.
This was followed in 2010 by the joint venture
between Proccea, with its international experience of
constructing gold processing plants, and Ariana
Resources plc to bring Ariana’s advanced Red Rabbit
gold project in western Turkey to production.
Other construction firms have developed
investments in the mining sector. Cengiz Holding, via its
subsidiaries Eti Aluminyum and Eti Bakir; and Unit
Group, via its subsidiaries Ege Madencilik and Akan
Madencilik. Nurol Holding and Lovet Insaat also have
gold-mining projects.
A further example of the way in which
construction companies are
investing in the mining sector
is demonstrated by the
case of the
Cerrattepe copper-gold project in the Black Sea region
of northeastern Turkey. This year Özaltın Holding bid
US$55 million in auction to develop this significant
deposit.
According to the terms of the tender, Özaltın is
expected to start production at this location within
three years and should be producing 10,000t/y of
blister copper. A high-grade gold-silver resource is also
located in the gossan above the copper deposit and
could be developed in the future.
The new wave of investments in the Balkans is also
significant. After the collapse of Yugoslavia, there was
little mining development in the region. The more
recent stabilisation of the area has encouraged
investments by the Turkish mining sector. In 2009,
Turkey hosted the third Balkan Mining Congress
in Izmir – representatives of the mining
sectors of Albania, Bosnia, Kosovo,
Macedonia and Serbia all attended.
In Albania, which has some
6Mt of chrome and copper
ore, has seen significant
interest in licence
auctions
from
Mediterranean Resources’ Tac property
May 11, 2012 Mining Journal 17
10/05/2012 09:13
Focus – Turkey
Turkish miners. In 2011, the Turkish mining company
Ekin Maden signed an agreement with Tirex Resources
Ltd to start production of copper and gold from the
Mirdita area in Albania. The joint venture is expected to
attain a processing capacity of 2,000t/d of ore.
Tete Mining, which has interests in the Muenella
copper project in Albania, is developing the Spac
copper project and plans to open a chromite mine.
In the Caucasus, the development of relations
between Turkey and Azerbaijan demonstrate the
growing role of the former’s companies in the region.
The country has more than 800 companies operating in
Azerbaijan, which have invested US$6 billion, including
investments in the energy sector by the Turkish
Petroleum Corp.
This year, Azerbaijan and Turkey are due to sign an
agreement to for the latter’s part of the South Caucasus
gas pipeline project, which will reduce Europe’s
dependence on natural gas from Russia.
Kazakhstan is seeking interest from Turkish
companies in the energy and mining sectors as part of a
privatisation programme. Turkey’s General Directorate
of Mineral Research and Exploration (MTA) has signed
co-operation agreements with Uzbekistan, Tajikistan,
Turkmenistan and Georgia.
Another development to watch across Central Asia is
Turkey’s growing relationship with China. China is
already Turkey’s third-largest trading partner (after
Germany and Russia) and trade between the two
countries has grown eighteen-fold over the past
decade.
Approximately 60% of China’s imports from Turkey
are mined raw materials. Chinese firms are also very
active in Turkey’s mining sector. During Chinese Premier
Wen Jiabao’s visit in 2010, the two countries pledged to
increase trade to US$100 billion by 2020, demonstrating
an eagerness to revive their ancient ‘Silk Road’ links
though Central Asia. The Turkish government is also
keen to work with Chinese companies to ensure more
raw materials are processed within Turkey.
Processing is indeed an area for future focus in the
country’s mining industry. Currently, Turkey adds only
limited value through mineral beneficiation and
processing, as it has only a few metal, ferrochrome and
ferromanganese smelters. Turkey is a net importer of
refined metals and alloys.
Substantial capital investment is needed to develop
the processing sector, though the appetite of Turkish
companies for investment in mining does indicate
potential for investment in this business as well.
There are some promising indicators in this area:
Meta Nickel is planning to spend US$500 million on a
processing facility at its Gördes mine; and the Soma
group will invest US$200 million in their Zonguldak
project. Also, Taner Yildiz, the Turkish minister of energy
and natural resources recently said: “By uncovering the
country’s mineral reserves, our final aim is to transform
Turkey from a country that produces and sells raw
materials into a country that is industrially integrated
and has a voice in the world market in terms of
high-value products.”
econoMic ouTlook
With a GDP growth rate of 8.5% in 2011 and 9% in 2010,
Turkey is one of the fastest growing economies in the
world and is now ranked as the world’s 16th largest.
According to the Organisation for Economic Cooperation and Development (OECD), Turkey is expected
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18 Mining Journal May 11, 2012
17_19, 21_24, 26MJ120511.indd 18
10/05/2012 09:13
Source: IntierraLive (www.intierra.com)
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Experienced management
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Exploration projects in Turkey, Russia, China,
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Looking for other opportunities, contact:
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www.mining-journal.com
17_19, 21_24, 26MJ120511.indd 19
May 11, 2012 Mining Journal 19
10/05/2012 09:13
Company profile
Success and sustainability at
Alacer’s Çöpler gold mine
A
lacer Gold is a rapidly growing intermediate gold producer that holds
a large portfolio of gold mines and
exploration properties in Turkey and
Australia. In February 2011, Alacer Gold
was formed on the successful merger of Anatolia
Minerals and Avoca Resources.
Edward Dowling, president and CEO of Alacer Gold,
said: “The merger has provided Alacer with a broad pool
of leadership skills and experience, giving Alacer a
proven management team with a global track record of
success in exploration, resource development, project
development, project execution and operating open-pit
and underground gold mines.”
Alacer now has an enhanced capital market presence
via listings on the Toronto Stock Exchange (TSX:ASR)
and the Australian Securities Exchange (ASX:AQG).
Investor interest and trading liquidity has been strong
on both exchanges. The merger also benefited
shareholders by reducing risk through gold production
from several operations, multiple cash flow streams and
geographic diversification. In 2011, full-year gold
production for mines in Australia and Turkey totalled
421,204oz with 411,933 attributable to Alacer Gold.
The future
Çöpler Gold Mine
The Çöpler Gold Mine, in eastern Turkey, exceeded 2011
expectations by producing 185,418oz in its first year of
production. Mined grades at Çöpler were 30% better
than expected with 26% more ounces mined than
planned.
More than 50km of drilling were completed last year
at Çöpler, extending and upgrading known gold
mineralisation. Only about half of this drilling was
incorporated in an updated Çöpler resource announced
early in 2012 increasing measured and indicated
resources to 7.3Moz.
Mineralisation at Çöpler occurs in both oxide and
sulphide forms, amenable to conventional open-pit
mining. Processing of the oxide ores occurs in a simple
crush, agglomeration and heap-leach circuit. The
treatment of sulphide ore is being evaluated in a
feasibility study, planned to be completed by late 2012.
Alacer acquired its first interest in Çöpler in
September 1998 and consolidated 100% control of the
property in January 2004 before entering a strategic
relationship with Lidya Mining in August 2009. Lidya
exercised an option to increase its ownership from 5%
to 20% of Çöpler from January 2012.
Alacer now owns 80% of Çöpler and remains the
operator. Construction of the mine began in September
2009 and first gold was poured December 2010. Last
year, the Çöpler Gold Mine produced 185,418oz at a
cash operating cost of US$322/oz from heap leaching
of oxide ore.
Financial performance
Alacer Gold was one of the best-performing stocks
in the S&P/TSX materials index during 2011; the
company’s share price increased 36% during the year.
Reported adjusted net profit for 2011 was US$130 million. Cash from operating activities generated
US$258 million. The average realised gold price of
US$1,582/oz provided a cash operating margin of
US$938/oz for the year.
The balance sheet strengthened with year-end cash
position at US$250 million. Full-year gold sales totalled
404,287oz, with 395,948oz attributable to Alacer Gold.
Sales recognised for IFRS purposes (from the merger
date, forward) were 344,239oz, generating revenues of
US$557,379.
Group gold production for 2012 is currently forecast to
be 435,000-450,000oz on a 100% basis for the mines
which Alacer Gold operates, or 396,000-410,000oz
(attributable). Alacer is pursuing a rapid growth strategy
that includes both organic and strategic growth
opportunities supported by strong regional exploration
programmes near key operations. Future growth is
underpinned by a highly attractive exploration portfolio
in Turkey and Australia where Alacer is actively drilling.
“Fundamental to our current and future success is an
unwavering focus on and commitment to safety, health,
environment and community. These fundamental
values are a priority for Alacer and we are working on
ways to further improve and expand our efforts,” said
Edward Dowling.
CONTACT
Head office:
10333 East Dry Creek Road, Suite 240
Englewood, Colorado
USA 80112
Tel: +1 303 292 1299 Fax: +1 303 297 0538
Level 3, 18 Parliament Place
West Perth,
Western Australia
Australia 6005
Tel: +61 8 9226 0625
Fax: +61 8 9226 0629
“Fundamental to our current and future success is
an unwavering focus on and commitment to safety,
health, environment and community”
www.alacergold.com
AlacerGold_company_profile_B.indd 22
09/05/2012 08:49
Focus – Turkey
to be the fastest growing economy among its members
between 2011-2017, with an annual average growth
rate of 6.7%. The Turkish Prime Minister, Recep Tayyip
Erdogan, has vowed to make the Turkish economy one
of the world’s top 10 by 2023, the 100th anniversary of
the foundation of the Turkish Republic.
After the financial crisis of 2001, the Turkish
government adopted an IMF-sponsored programme of
financial and fiscal reforms. These reforms have
transformed the Turkish economy, unleashing a decade
of strong growth and major foreign investment.
Between 2002 and 2010, GDP and foreign exports
tripled (GDP grew from US$230 billion to US$744
billion, exports grew from US$36 billion to US$114
billion). Foreign direct investment (FDI) was only US$1.8
billion in 2003, but this year it is expected to be over
US$15 billion, according to industry minister Nihat
Ergϋn.
Turkey has also experienced a remarkable increase in
productivity over the past decade, with GDP per head
tripling. Public debt has been kept at manageable levels
compared with other Western economies and is
running at 40% of GDP.
Turkey’s population of 75 million is well-educated,
entrepreneurial and youthful (with half under 29).
Moreover, businessmen and politicians alike are
comfortable with straddling both East and West and
applying the government’s sound policy of “zero
problems with neighbours”. According to 2010 figures,
the Turkish economy is led by the industry and service
sectors: industry (26.7%), services (63.8%) and
agriculture (9.6%).
Mining ouTlook
Mining in Turkey dates back at least 9,000 years – there
is evidence of mining for metals, such as gold, silver,
copper, iron, lead, mercury, tin and zinc.
During the next five years the Turkish mining sector
is expected to have a compound annual growth rate
(CAGR) of 4.56%, according a 2012 report published by
the UK-based research firm BRICdata. From 2007-2011
the CAGR of the Turkish mining sector was an
impressive 5.8%.
In 2010, the Turkish mining sector’s total value of
production was US$10.5 billion, a fourfold increase from
the 2003 figure of US$2.6 billion. The mining sector
accounts for 1.5% of Turkey’s GDP but Professor Güven
Onal, of Istanbul Technical University, says that with the
current rates of development and with sufficient
investment, this could rise to 4% of GDP.
RC Drilling on the Kiziltepe sector
of Ariana’s Red Rabbit project
Turkey’s geographical location between East and West
allows the export of mining products at a relatively low
cost. According to General Secretariat of Istanbul Mineral
and Metals Exporters’ Association (IMMIB) Turkey’s major
customers for mineral products are China, US, Italy, India,
UK, Saudi Arabia and Russia.
Rising world commodity prices, Turkey’s positive
economic and political environment and the strong
track record of growth of the Turkish mining sector are
all factors attracting interest from both foreign and local
investors. Another positive factor is the strong industrial
base in Turkey for sourcing equipment, together with a
skilled pool of geoscientists, seasoned mine personnel
and drilling and mining contractors.
Over recent years, the government has fostered a
positive environment for the industry. This includes
fundamental changes to mining laws in 2004 and 2010
and a favourable attitude to mining as an industry that
encourages investment and the growth of new
technologies, skills and jobs.
With 25% of the value of mining licences paid to the
government via auctions being invested in
infrastructure in regions where the licences are located,
mining is a key contributor to rural development. In
addition, 50% of the state rights paid by mining
operations to the government are used to bring
services to the regions in which these mines operate.
The amendments to the mining code in 2010
reduced red tape and discouraged the unproductive
practice of holding mining licences for purely
speculative purposes. The government now demands
that licence holders and explorers prove that they have
the financial ability to pursue genuine exploration.
As an example of how these combined reforms in
“Over recent
years, the
government
has fostered
a positive
environment
for the
industry”
Eldorado’s Kışladağ gold mine
have helped the industry, it is notable that there has
been an increase to 26 firms exploring for gold from
only 9 in 2004. In 2010, approximately 1Mm of
prospective targets were drilled: a tenfold increase from
the 2002 figure.
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www.mining-journal.com
17_19, 21_24, 26MJ120511.indd 21
May 11, 2012 Mining Journal 21
10/05/2012 09:15
Focus – Turkey
Turkey’s main mineral exports are marble and natural
stones, boron, chrome, feldspar and pumice. In 2011,
non-metallic minerals represented 51.1% of total
mining production by volume, of which coal
represented 45.5%. However, recent years have
witnessed significant increases in exploration and
mining of metallic ores, including gold, silver, copper,
chrome, nickel and manganese.
Apart from gold and silver, the major development in
Turkish metal mining in recent years has been for nickel.
Following years of permitting delays at the Çaldağ
nickel project in western Turkey, in 2011 ENK plc sold
the site for US$40 million to VTG Nikel, a private Turkish
company.
The Çaldağ project is one of the largest nickel laterite
deposits in Europe, with a resource of 33.2Mt at 1.13%
Ni. It is being developed by VTG subsidiary Çaldağ Nikel.
In terms of current production, the Fe-Ni Madencilik
operated iron and nickel mine, near Yunus Emre in
Eskisehir Province, is an important example.
DynaMic golD secTor
The gold-mining sector has undergone a complete
metamorphosis over the past decade. While Turkey was
a major gold producer of the ancient world and the
source of the world’s first gold currency (produced in
Lydia in western Turkey), in 2000 Turkey did not produce
a single ounce of gold.
Lying across the prolific Tethyan Eurasian
Metallogenic Belt (TEMB), Turkey is now Europe’s
leading gold producer, with 2011 production of 25t/y
(Sweden is a distant second with 6.5 t/y). While current
defined gold reserves are 710t, geological estimates
have shown the potential for up to 6,500t.
An announcement in March this year by Stratex of a
1Moz discovery in central Turkey adds credence to the
predictions for continuing strong growth in Turkish
gold mining. Output for 2011 grew 43% from 2010.
The rapid growth of the gold-mining sector is
attributed to significant foreign investment in recent
years, though these investments are often in the form of
partnerships with local Turkish firms.
In particular, greenfield exploration has also ramped
up over the past decade, encouraged by changes to
mining laws, rising commodity prices,and awareness of
the significant untapped geological potential of Turkey.
In January this year, the government gave a further
boost to exploration with the tendering of some 1,252
exploration licences.
There are now 26 exploration companies focused on
identifying gold deposits across Turkey, including
hitherto under-explored areas in the northeast and
southeast. The exploration field is dominated by
companies from Australia, UK, Canada and the US,
which typically bring in geologists with global expertise
to work collaboratively with local geoscientists and
mining personnel in Turkey.
Despite its rapid growth, the gold-mining industry
has been unable to keep pace with local demand.
Turkey is the world’s fourth-highest consumer of gold,
Drilling at
Chesser
Resources’
Kestanelik
project
according to the World Gold Council (after India, China
and the US). Turkey used to import between 100t and
250t of gold annually, though this has declined in the
last couple of years – partly as a result of increasing
domestic production.
On a per capita basis, Turkey is the world’s
third-largest purchaser of gold, after India and Saudi
Arabia. It is also the world’s second-largest producer of
gold jewellery after India. Demand for investment gold
– including coins, bullion and gold-backed accounts
from Turkish banks – has also increased. Global financial
uncertainties have augmented traditional Turkish
attitudes to gold as a store of value and hedge in
uncertain times. In the last 17 years Turkey has
imported 2,573t of gold and maintains approximately
210t in official bank reserves.
“The exploration field is
dominated by companies
from Australia, Britain,
Canada and the US, which
typically bring in geologists
with global expertise to work
collaboratively with local
geoscientists and mining
personnel in Turkey”
As part of the growing demand for gold in Turkey,
the country’s refineries have sought a new status: both
the Istanbul Gold Refinery (IGR) and Atasay have gained
accreditation by the London Bullion Market Association.
The IGR has also obtained certification from the Dubai
Multi-commodities Centre and the International
Precious Metals Institute.
aDvances For golD Mining coMpanies
From 2010 to 2011, total gold output increased by 43%
to 24.4t. There are three large producers, Alacer Gold
Corp, Eldorado Gold Corp and Koza Gold Operations Co.
All are operating mines based on epithermal or
porphyry styles of mineralisation, while Pomza Export
AS and Gumustas AS are smaller producers of alluvial
gold from placers and karstic sedimentary-fill deposits
respectively.
Several well-established exploration companies have
advanced projects close to production, including
Alamos Gold Inc, Aldridge Minerals Inc, Ariana
Resources and Stratex International. There is also
intensified activity among both established explorers
and new entrants, including joint ventures with local
Turkish companies and foreign companies.
operaTing golD Mines
In 2011, leading producer Eldorado had an output of
8.8t (284,647oz) from its Kışladağ operation. Alacer Gold
produced 5.8t from its Çöpler mine, while Koza Gold
produced 4.4t at Ovacik, 5.1t from Mastra and 0.43t
from its Kaymaz operation. Pomza Export’s Sart (Sardes)
placer mine produced 0.41t in 2011.
Among the established producers in Turkey, the
focus is clearly on increasing production and extending
mine life.
Koza Gold owns the first Turkish gold mine to enter
production, which happened in 2001. The 1Moz
open-pit and underground mine at Ovacik was
developed by Normandy-Newmont, which sold the
asset to the wholly Turkish owned Koza Gold in 2005. In
the past eight years it has produced 30t of gold and 28t
of silver. Koza’s focus is now on extending mine life,
potentially to 2020.
The Ovacik plant’s present output is 180,000oz/y,
though 80% of the ore processed is currently derived
from the Çukuralan open-pit located 17km NNW of
Ovacik. In 2011, Koza brought the Kaymaz mine , which
is located in Eskisehir Province in west central Turkey,
into production. Once this mine reaches full capacity, it
is expected to produce between 80 and 100,000oz/y.
Koza Gold also operates the Mastra mine in the
Gümüşhane region near the Black Sea. The operation
began in 2009 and it is expected to produce 15t of gold
and 9t of silver during the projected mine life.
Eldorado, a Canadian company, runs Europe’s largest
gold mine in Kışladağ in the province of Uşak in central
Turkey. The Kışladağ gold-porphyry deposit has
combined proven and probable reserves of 10.2Moz
at 0.74g/t.
Kişladağ is a low-grade, bulk-tonnage open-pit
operation that uses heap-leaching for gold recovery.
Additional capital expenditure in 2012 is estimated at
US$175 million, the bulk of which was used to begin
engineering work on the phase four expansion project,
which will enable Kişladağ to process up to 25Mt/y.
The total cost for the expansion project is estimated
at US$354 million and completion of this project is
expected during the September 2014 quarter. This will
enable Kişladağ to produce approximately 475,000oz/y,
placing it in the realms of one of the world’s largest
operations.
Eldorado also operates an additional project at
Efemçukuru in western Turkey. This deposit has
combined proven and probable reserves of 1.5Mt at an
average grade of 9.10g/t Au. This deposit comprises
high-grade epithermal gold veins, suitable for
underground mining.
The mine started production in June 2011, with ore
processed through a milling and flotation concentrate
circuit on site. The flotation concentrate is transported
to Eldorado’s Kişladağ mine in Uşak. By the end of 2011,
9,100t of concentrate, containing approximately
25,000oz of gold, had been delivered to Kişladağ for
further processing.
The concentrate treatment plant at Kişladağ started
operation in January 2012. Treatment of the first
concentrate feed resulted in the production of doré.
Capital expenditure for 2012 is estimated at US$30
million, including the completion of the construction
programme, underground development and
construction of a road to bypass a local village.
Alacer Gold, a US-Australian company, owns 80% of
the world-class Çöpler mine in Erzincan Province of
central Turkey, which has proven and probable reserves
of 4.4Moz at an average grade of 1.4g/t Au. The
remaining 20% of the project is owned by Lidya
Madencilik.
Çöpler is the second-largest deposit discovered thus
far in Turkey. Production started in December 2010, at
around 50,000oz per quarter. Alacer Gold aims to
increase production to 250,000oz/y, and with deeper
drilling activity is confident that reserves will be revised
upwards.
Alacer announced results of a prefeasibility study in
March 2011 to assess the processing of sulphide ore via
a pressure-oxidation circuit. The circuit will recover
2.25Moz of gold and 91Mlb (41,000t) of copper from
33.1Mt of sulphide ore at a planned throughput rate of
8,000t/d. Overall recoveries are estimated at 94.4% for
gold and 75.2% for copper.
Alacer Gold also operates a joint venture with its
partner Lydia Madencilik at Cevizlidere, a copper-goldmolybdenum porphyry deposit in Tunceli Province in
22 Mining Journal May 11, 2012
17_19, 21_24, 26MJ120511.indd 22
10/05/2012 09:15
300000
Turkish gold (oz) production 2011
250000
200000
150000
100000
50000
Sal
ihli
-S a
z
ay
ma
Es
k iş
eh
ir-K
va
c
-O
ma
rg
a
Be
üş
Gü
m
Er
4000
ık
tra
as
M
ha
ne
-
ca
zin
Uş
a
kK
n-
ışl
ad
ağ
Çö
pl
er
0
rt
Source: TGMA
50
Turkish mineral export value
US$M
40
3500
% growth (year-on-year)
30
3000
20
2500
10
2000
0
1500
1000
500
-10
Source: IMMB General
Secretariat of Istanbul
Mineral and Metals
Association
2000
2001
-20
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
-30
MaJor Turkish Mining proDucTs 2008
Marble
Boron
Chromium
Feldspar
Pumice
Gold
Iron ore
production (000t)
2,263*
4,999
5,100
6,800
3,450
0.01
4,700
reserves (000t)
3,800,000*
866,000
25,000
130,000
3,000,000*
6.5
82,500
GOLD, SILVER, COPPER, LEAD & ZINC
* values in ‘000m3 Source: Ministry of Energy and Natural Resources, Export Promotion Center
eastern Turkey. Alacer took control of Cevizlidere in 2000
and after a successful drilling campaign in 2003
discovered the deposit with the first hole drilled: 580m at
0.39% Cu, 0.14g/t Au and 0.052% Mo. The inferred
resource is 445.7Mt at 0.11g/t Au, 0.4% Cu, 0.048% Mo
containing 1.6Moz of gold and 1.7Mt of copper.
In a second joint venture with Lydia Madencilik, Alacer
is also operating the Karakartal project, which is roughly
10km by road from Alacer’s Çöpler mine. Karakartal is a
copper-gold porphyry system. Alacer Gold restarted
exploration drilling at Karakartal in late 2011.
Pomza Export operates a placer mine at Sart near
Salihli in western Turkey. These alluvial deposits were
originally mined approximately 2,600 years ago by the
Lydians, and were the source for the fabled gold of the
Lydian King, Croesus. All of the gold production at this
site is a by-product of Pomza’s heavy-minerals extraction.
explorers wiTh aDvanceD proJecTs
Several established explorers are now approaching a
point where they will bring discoveries made over the
past decade into production. The cash flow from this
production is likely to create further stimulus for these
companies to reinvest in exploration.
Ariana Resources plans to begin production at its
Red Rabbit project in western Turkey in 2013. The
project has JORC-compliant resources of 448,000oz
www.mining-journal.com
17_19, 21_24, 26MJ120511.indd 23
“The trend in
major Turkish
construction
companies
branching
out into the
gold mining
sector began
with Calik
Holding in
2006”
ALDRIDGE MINERALS INC. (AGM-V)
130 King Street West,
Suite 2830 P.O. Box 5,
Toronto, Ontario M5X 1A9
Main: 416-477-6980
Fax: 647-847-9289
www.aldridgeminerals.ca
May 11, 2012 Mining Journal 23
10/05/2012 09:15
Focus – Turkey
gold equivalent. Two key sectors of the project are
under development: the high-grade Kızıltepe Sector
and the heap-leachable Tavsan Sector.
Exploration in the wider Red Rabbit project area is
underway and the company is confident of the
potential to increase the resource to at least 500,000oz.
The company plans to process 150,000 t/y of ore,
reaching a target annual production of 20,000oz over a
mine life of eight years at the Kiziltepe Sector.
In 2010, Ariana Resources completed a joint venture
with Turkish construction company Proccea to establish
Zenit Madencilik. Proccea has an internationally
established business unit specialising in gold-silver
processing-plant design, manufacturing, installation
and commissioning. The Ariana/Proccea joint venture
will develop and run construction and production at
the Red Rabbit project. Proccea are to fund
approximately 25% of the US$26 million investment
required and the joint venture is currently in discussions
with financial institutions for the additional funding for
the project.
Ariana is also developing the Ivrindi and Demirci
gold projects in western Turkey and maintains a joint
venture with Eldorado Gold in north-eastern Turkey. It
has also made a strategic investment in privately owned
Tigris Resources, which focuses on the hitherto
under-explored region of south-eastern Turkey.
Stratex International is planning to bring into
production its Inlice project in 2013. Stratex has
a joint venture partnership with a Turkish
construction firm, NTF Insaat, for the development
of Inlice and another joint venture with a Turkish
mining company Bahar Madencilik for the
development of Altintepe.
Stratex is also pursuing three gold exploration
projects at Öksüt, Altunhisar and Hasançelebi, together
with the Muratdere copper-gold-silver-molybdenumrhenium project. These projects being developed by
Stratex on its own or in joint ventures with Centerra
Gold Inc’s Centerra Exploration and Teck Resources Ltd’s
Teck Madencilik.
At Öksüt, two drill rigs were mobilised for step-out
Koza Gold’s Ovacik gold mine
drilling in April 2012 to investigate the potential for
additional resources within this million-ounce gold
deposit.
Stratex also has a strategic alliance with leading
international copper company, Antofagasta plc, to
explore for porphyry copper and other copper
deposit-types in Turkey.
Aldridge Minerals Inc, a Canadian company, is
completing final feasibility studies for its Yenipazar
project, which has gold reserves of some 3Moz.
Yenipazar is a 24Mt polymetallic deposit, containing
copper, gold, silver, lead and zinc. The deposit could
prove to be the third-largest gold project in Turkey after
Kişladağ and Çöpler.
The Yenipazar deposit has a determined strike length
of 1,700m (open in one direction) averaging 150m in
width and approximately 25m in thickness at depths
between 30 and 190m. In 2011, Aldridge began drilling
30 large-diameter diamond holes as part of its definitive
feasibility study, which is planned for completion in late
2012.
In 2010, Aldridge announced positive results from an
independent technical report and preliminary
economic assessment on the Yenipazar project that
demonstrated its potential as an open-pit mine
producing copper, zinc and lead, together with
significant quantities of gold and silver. The base-case
economic analysis determined an average life-of-mine
stripping ratio of 4.5:1, a 5,700t/d mill feed rate and a
12-year mine life.
Alamos Gold is the newest entrant to the Turkish
gold mine development scene, following its purchase of
the Ağı Dağı and Kirazlı projects from Teck and Fronteer
Development Group in 2009. The company paid US$40
million in cash and four million Alamos Gold shares. The
Ağı Dağı and Kirazlı projects are in Çanakkale Province
in north-western Turkey.
According to the scoping study, the project provides
for over eight years of production from both Kirazlı and
Ağı Dağı. The plan is for each site to have stand-alone
crushing, agglomeration, heap-leaching, and process
plants, plus separate owner-operated mining fleets.
The upfront capital costs are estimated to be
US$207.5 million plus an initial investment in working
capital of US$9.9 million. At Kirazlı and Ağı Dağı, a total
of 10,000t and 15,000t ore per day respectively will be
delivered to a two-stage crushing facility. Alamos
estimates a total cash cost of approximately US$314/oz
gold, including the net smelter return royalty and
refining and transportation costs. Alamos is expecting
to complete its pre-feasibility study during 2012.
oTher explorers
Mediterranean Resources Ltd is developing four projects
within the 12km Red Mountain (Kızıldağ) area near
Yusufeli in north-eastern Turkey. NI43-101 compliant
resource estimates for the Taç and Çorak projects are for
1.58Moz gold indicated and 0.29Moz inferred. In
Alacer’s Çöpler gold mine
Coming up in next week’s issue...
Mining sector activity on the
rise in Central Europe
www.mining-journal.com
24 Mining Journal May 11, 2012
17_19, 21_24, 26MJ120511.indd 24
10/05/2012 09:43
Company profile
Dedeman continues to grow
D
edeman Mining is known as one of the
pioneers of the Turkish mining industry.
It was founded in Pınarbaşı-Kayseri by Mr
Kemal Dedeman in 1947. The group has
since then evolved to its current size, and
professionalism. The company’s recent undertakings
and projects seem to bring a new perspective to Turkish
chromite mining.
Dedeman Mining was the third-largest chromite
exporter in 2010. Its 2011 production was 164,000t,
mostly from the Pulpinar and Toruntepe deposits in
Kayseri province. With dense and solid orebodies, these
mines have already been developed down to depths
exceeding 400m. Low-grade ores and by-products
which are not directly saleable, are enriched at the
Pulpinar concentration plant. With the experience
gained along the production at Pınarbaşı, Dedeman
Mining has continued to explore different regions of
Turkey. The Adana-Aladağ Concessions of the group
were added in 2006 and have contributed to the
production with 45,000t/y final product since then. The
brand new Eskisehir concentration plant has come on
stream in 2011, and can produce some 2,000Mt of
saleable product each month.
Dedeman Mining focused on exploration in recent
years alongside its tight production schedule. In 2011,
chromite exploration continued at Islahiye – Gaziantep,
Artova – Tokat, and Palandoken – Erzurum. The newly
acquired mine in Erzurum started production of the
super-high-grade lumpy ore immediately. The mine has
five chrome ore exploration and exploitation licences
with a total land area of about 31,000ha.
The focus is not only on chromite. Kırkpavli and
Aktutan – Gümüşhane concessions are considered very
promising gold prospects. These two areas are already
part of the 2012 drill programme. With its 13 drill rigs,
Dedeman Mining can drill up to 60,000m/y.
The company decided to update its database as part
of its drive for sustainable business. All the geological
and resource/reserve data collected since its foundation
has been updated by the ‘in-house’ Engineering
department and have been validated by South African
and Canadian experts in accordance with International Mining
standards.
The lesser-known activity of the company is its lead
and zinc mining. Dedeman possesses, in total, 26 lead
and zinc licences in Turkey. These are around Kayseri,
Nigde and Balikesir regions. Delikkaya – Yahyalı/Kayseri
lead and zinc mine restarted its production in 2012 after
being shut down due to the global crisis in 2008. The
lead-rich ore extracted from this mine is being
processed at Çadırkaya flotation plant near Yahyalı. Zinc
oxide ore is being exported directly. Tekneli AS, a joint
venture with Cinkom, also plans to start production in
the same region.
Following positive drilling results at Balya, Balikesir,
the company has taken the
decision to develop an
underground mine and construct
a lead and zinc flotation plant of
200t/d capacity at the same
location by the end of 2012.
Dedeman estimates there
is more than 5Mt of
sulphide ore here,
and aims to
establish and
develop
actual
reserves in
the shortest
possible time to
design the ultimate
flotation plant in this
licence. Among the company’s international projects,
the Rehova copper deposit in Albania has been
suspended since 2011; the project is undergoing
reassessment.
Recently, the company began to implement the
appropriate Corporate Governance principles. These are
basically same as those adopted by the OECD, as well as
by the Istanbul Stock Exchange. The company
management guide covering all aspects of the business
has been issued to that effect. The operations of the
company have been certified with ISO 9000 Quality
Management, along with ISO 14001 Environmental Management, and OHSAS 18001 Health & Safety Standards
by TÜV Thüringen. The organisation is also equipped
with an ERP (Enterprise Resource Planning) system.
With around 700 employees, Dedeman Mining
continues to grow in Turkey, as well as in the
international mining field. The adventure that started
in the heart of Anatolia, by Mr Kemal Dedeman,
still continues its founder’s mission: ‘To create wealth
for the times
ahead’.
CONTACT
Dedeman Madencilik San.ve Tic.A.Ş. /
Head Office Address:
Yıldız Posta Cad. No: 52 Kat: 11 Esentepe 34340
İSTANBUL / TÜRKİYE
Tel: +90(212) 337 29 72
Fax: +90(212) 288 48 49
E-mail: [email protected]
www.dedemanmining.com
Dedeman_company_profile.indd 22
04/05/2012 10:16
Photo: Bloomberg News
Focus – Turkey
addition, there is an indicated resource of 64Mlb of
copper, 141Mlb of lead and 340Mlb of zinc. The resource
estimates by SRK Consulting demonstrate that both
Çorak and Taç are amenable to open-pit mining.
Less than 20% of the 100km2 Red Mountain (Kizildag)
project has been drilled and Mediterranean will continue
to focus on targets in this area. Although these projects
are close to the Çoruh River, their location is not
considered an issue from a mining perspective, although
the Yusufeli dam, if built, could affect future development.
Mediterranean Resources is also exploring at the
nearby Çeltik and Çevreli properties. Exploration drilling
at Çeltik has confirmed a significant new discovery, with
multiple intercepts from surface to 31m. One intercept
of 18.4m at 6.51g/t Au and 0.9% Cu confirms the
potential of this discovery.
Teck Madencilik has a joint venture with Pilot Gold
Inc (in which Teck owns 60% and Pilot 40%) at Halilağa,
a copper-gold porphyry deposit in northwestern Turkey.
The project has an indicated resource of 1.7Moz gold
at an average grade of 0.31g/t Au, and 1,100Mlb of
copper at an average grade of 0.30% Cu.
Drilling at Halilağa focused on defining further
resources at the Kestane zone, where copper-gold
porphyry mineralisation extends over a strike length of
1,200m and a width of up to 850m, with mineralised
intercepts of over 600m. Drilling has intersected a
higher-grade copper-gold zone starting at surface with
19 intersections assaying an average of 0.8% Cu and
0.6g/t Au over intervals of 12 to 60m.
Teck Madencilik is also funding exploration and
development at Hasançelebi under the terms of a
joint-venture agreement with Stratex.
Chesser Resources Ltd is exploring for gold and base
metals in Turkey. The firm is conducting an intensive
exploration programme on its Kestanelik epithermal gold
project in western Turkey close to the Dardanelles.
The company is also pursuing exploration at its
Karaayi property, a porphyry-style stockwork system
with copper-gold mineralisation. At the Sisorta project
in northeastern Turkey, Chesser had defined a
303,000oz JORC gold resource (with 91,000oz indicated
and 212,000oz inferred). The property has recently been
optioned by Chesser (51% stake) and its partner on the
project, Eurasian Minerals Inc (49% stake), to Çolakoğlu
Ticari Yatirim, a Turkish company with developing
interests in gold mining.
According to the option, Çolakoğlu will make an
upfront payment equivalent to 100oz of gold and
undertake a minimum of US$500,000 of exploration in
the first year. After this time, Çolakoğlu may exercise its
option to purchase the property following payment of
7,900oz of gold, or its cash equivalent. In addition, both
Chesser and Eurasia will receive a 2.5% net smelter return
royalty for any production from the property.
Valhalla Resources Ltd has interests in Romania and
Turkey. Its Sarp project is in northern Turkey close to the
Bulgarian border. The deposit comprises Cu-Mo
porphyry, Cu-Au skarn and epithermal Au-Ag targets.
The company has invested US$2.4 million in exploration
and drilling to date. Further geological mapping,
structural and alteration mapping, geophysics, model
development and drilling are planned this year.
Frontline Gold Corp recently began a diamonddrilling programme of up to 3,000m to test a number of
epithermal gold targets on its Menderes project in
western Turkey. The drilling is focusing on extending
the Kokarpinar vein, a known gold-bearing epithermal
vein system, which is one of the main structures
containing gold mineralisation on the Efemcukuru
property of Eldorado Gold.
Empire Mining Corp is focused on the Bursa
copper-gold project in western Turkey. A discovery hole
drilled at the Demirtepe target intersected copper-goldsilver mineralisation including 2.02% Cu, 0.96g/t Au and
21.64g/t Ag over 47.35m from 112.2m to 159.55m. A
drilling programme at Demirtepe has been expanded
and is focused on defining continuity within the skarn
style of mineralisation identified to date.
Global Resources Corp focused on exploration of the
Aktarma, Yunt Dag and Ispir projects. A drilling
programme comprising eight initial holes on the
Aktarma project in western Turkey returned best results
of 0.4m at 23.6g/t Au and 4m at 1.14g/t Au, with
anomalous gold present in seven of the holes. A
follow-up drilling programme is being planned.
Turkish Mining grows
“The
introduction
of various
tax incentive
schemes
for major
investments
will also act
as a driver
for capitalintensive
mining
projects”
The positive trends witnessed during the last few years
in Turkish mining are exemplified by the rapid
expansion of its gold sector. From this is flowing an
increasing international awareness of the resource
potential of Turkey and a better perception of the ease
of bringing mining projects on stream.
The appetite for increased foreign investment in
mining is being encouraged by government and a
well-structured legal framework. The introduction of tax
incentive schemes for major investments will also act as a
driver for capital-intensive mining projects.
The parallel trend exhibited by domestic construction
firms entering the mining space has also intensified in
the last few years. It would not be surprising to see some
of these firms transforming into regionally significant
mining companies in the years ahead.
Indeed, the expansionist trends of Turkey, echoed
recently the book The Next 100 Years: A Forecast for the 21st
Century by George Friedman, could well be driven by the
resources sector in general and by the exceptional skills
and financial clout of Turkish companies in particular.
With the macro-economic forces of China on the one
hand and a stagnant Europe on the other, Turkey and its
resources sector stands to become a significant regional
player, able to leverage its balanced relations with both
East and West.
Kerim Sener has a PhD in geology and is managing director of Ariana Resources plc, a gold
exploration and development company focused on Turkey. www.arianaresources.com
Eldorardo’s Efemçukuru project
26 Mining Journal May 11, 2012
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10/05/2012 09:16