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Fall 2015 | Vol 5 | Number 9 | www.miningturkeymag.com
Mining & Earth Sciences Magazine
by ISSN: 2146-9423
Turkey: At The Cross-Roads
Gold Metallogeny of Turkey – A Quantitative Assessment
The Largest of Europe:Tüprag Kışladağ Gold Mine
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“The Golden Brand of Turksh Mnng Industry”
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2Fall 2015
contents4.....6.....
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FROM THE EDITOR TURKISH MINING SECTOR NEWS INTELLIGENT DESIGN - Sandvik CULMINATION OF 29 YEARS OF EXPERIENCE AND KNOWLEDGE ACCUMULATION... - Engeotek TURKEY: AT THE CROSS-ROADS - Dr. Kerim Şener NEW UNDERGROUND DRILL RIGS FROM BARKOM GROUP - Barkom ZENİT MADENCİLİK - Zenit Madencilik DAMA ENGINEERING - Dama Engineering THE LARGEST OF EUROPE: TÜPRAG KIŞLADAĞ GOLD MINE ARDEF EXPANDED ITS GLOBAL FOOTPRINT BY PARTNERSHIP AGREEMENT WITH RPM - Ardef WEIR MINERALS TURKEY - Weir MineralsGOLD METALLOGENY OF TURKEY – A QUANTITATIVE
ASSESSMENT - Özcan Yiğit ATİLLA MAKİNA - Atilla MakinaBEING A PIONEER GOLD REFINERY IN TURKEY - Nadir Metal Refinery GOLD MINING IN TURKEY - M. Ümit Akdur / Dr. Muhterem Köse ADJARA HYDRO RACES AHEAD - Atlas CopcoKOZA, TURKEY’S “GOLD” COMPANY - Koza Altın ARIANA RESOURCES - Ariana ResourceEFFECT OF THE PRIME MINISTRY’S CIRCULAR 2012/15 ON MINING LAW - KGEC Law Firm
ADVERTS INDEX EVENTS LIST
Cover Photo
The Kışladağ Gold Mine is an open-pitoperation which belongs to TüpragMetal Madencilik San ve Tic. A.Ş. is awholly owned Turkish subsidiary of theCanadian-based mining firm EldoradoGold. The Kışladağ mine site is locatedon the administrative boundary be-tween the Ulubey and Eşme districts of
Uşak province. The site is approximate-ly 180 kilometres east of the provinceof İzmir and about 30 kilometres tothe southwest of the provincial seat ofUşak, in the Aegean Region. Kışladağ isthe largest gold mine of Europe basedon annual gold production.
F a l l 2 0 1 5 | V o l 5 | N u m b e r 9 | w w w
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M i n i n g & E a r t h S c i e n c e s M a g a z i n e
b y
I S S N : 2 1 4
6 - 9 4 2 3
T h e L a r g e s t o
f E u r o p e :
T ü p r a g K ı ş l a d
a ğ G o l d M i n e
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4Fall 2015
Gold has occupied an important position in human culture more than 6000 years. Ancient civilizations used gold for several
purposes in their lives, and we still use gold to meet our needs in the modern age. Although fossil studies showed that natural
gold was found in caves, and it was probably used by Palaeolithic Men in 40,000 BC, the first gold was smelted by ancient Egyp-
tian goldsmiths in about 3600 BC. Egyptian pharaohs and temple priest used gold as relic metal for adornment, meanwhile the
exchange of Egypt was barley instead of gold.
The more value gold gained, the wider geography it started to be used in by people. The “Gold of Troy” a.k.a. “Priam’s Treasure”
treasure hoard, excavated in Turkey and dating to the era 2450 -2600 BC.
During archaeological studies, a large amount of gold artefacts was found in Mesopotamia region, which was located between
the Tigris (Dicle in Turkish) and Euphrates (Fırat in Turkish) Valleys had no native golds.
Another archaeological site, Alacahöyük where the capital city Hattusa of the Hittite Empire was situated (2500 BC) is located
in central Turkey. In this archaeological site, Hittite kings were found buried with their own golds. The gold was obtained from
all other civilizations, and it was mixed and smelted into a melting pot.
The first use of gold as money claimed in Kingdom of Lydia which was located in western part of today’s Turkey in 700 BC. King
of Lydia, Alyattes developed the gold refining technology, and then the first stamped gold coins were produced in capital city
Sardis and used in trade by Lydian citizens. First Lydian gold coins were made of electrum (naturally occurring alloy of gold and
silver) lumps which were found in mountain streams of Lydia. King Croesus, son of Alyattes set the standards for coins to 98%
gold, and stamped it with the seal of king.
After Persian occupation on Lydia, Perisans brought the wealth of Egypt in addition to their own gold supply, but used the
Lydian gold smelting and refining technology. Persians exploited the alluvial golds, which were obtained from Arabian shore,
meanwhile Dardanelles of Lampsacus (Located in western Turkey, Çanakkale Province) started changing electrum coins into
gold coins to trade with Greeks.
Consequently, the journey of modern gold started the in Anatolia and expanded all over the world as time passes by. Today,
gold is demanded in all around the world for both ancient and modern uses. As it was in the ancient times, Anatolian people
desire gold more than many other nations. According to the statistics of 2013, Turkey is the 4th biggest gold jewellery con-
sumer of all world (175.2 tonnes annually).
As Turkey lies in Tethyan Metallogenic Belt, it has a significant potential to supply this amount of gold demand with its own
resources. Recently the country is the leader gold producer of Europe with 31 tonnes of annual production (in 2014). However,
Turkey has notable unexplored areas which may consist huge gold deposits. In order to do further exploration activities within
these areas, exploration companies should be encouraged with incentives or reasonable legislations. In order to use our gold
potential, all obstacles to gold mining in Turkey must be eliminated for the sake of having an advanced economy.
Anatolia: Where Gold Gained its Value
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6Fall 2015
Pilot Gold Started 20,000 meters Drilling at TV Tower Pilot Gold announced that 20,000 me-
ters of drilling at TV Tower Project start-
ed on 13th of June. Pilot Gold owns the
60% of the project whereas the rest is
owned by Teck Madencilik, a subsidiary
of Teck Resources. The budget is esti-
mated 6 million dollars.
Lennox-King, President and CEO of Pi-
lot Gold expressed his positive feelings
about the discovery of the Valley and
Columbaz porphyries and growth of
the mineralized footprint at the Hilltop
porphyry at TV Tower, and he added;
“We believe these discoveries are only
the first porphyries at TV Tower and we
remain focused on driving district scale
growth through additional discoveries
in this rapidly evolving mineral belt.”
2015 program of company consists of
building on the discovery of the Valley
porphyry, focused on expanding the
footprint of mineralization and testing
high priority step out targets. Pilot Gold
will also continue with property-wide
environmental baseline studies and
comprehensive CSR programs.
June 2015
First Gold is Poured in AltıntepeStratex International Plc announced
that the first gold pour has been
achieved at Altıntepe gold mine.
Altıntepe is owned by a joint venturebetween Stratex (45%) and Bahar Ma-
dencilik (55%), and located in Black Sea
region of Turkey.
The construction at Altıntepe was
completed in October 2015, and the
first gold was poured on 6th of Octo-
ber. The Stage 1 operation, focusing
on exploitation of the Çamlık East
zone, is expected to deliver a mini-
mum of 30,000 oz gold per annum
over 34 months for a total 110,000 ozrecovered gold.
Bob Foster, Stratex Chief Executive,
said: “This is a major milestone for
Stratex as we move into the realms of
being a gold-producer. We would like
to acknowledge the very professional
work delivered by our Partner as they
have overcome the many hurdles that
confront putting any new mine intoproduction. We believe this partner-
ship approach to mine development
and delivering cash flow is an excel-
lent strategic model and especially so
during these difficult times faced by
the mining sector. We look forward to
taking this strategy forward as we fo-
cus on growing our production profile
through leading-edge exploration andappropriate acquisitions.”
November 2015
Construction of Kızıltepe Commenced Ariana Resources announced the com-
mencement of Kızıltepe Sector’s con-
struction on September 2. The con-
struction of Kızıltepe, which is a part
of Red Rabbit project, is being devel-
oped by a partnership between Ariana
Resources and Proccea Construction,
whereas the initial gold production is
expected to take place in H2 2016.
According to the announcement, min-
ing contractor has been assigned to
commence site works in October 2015,
while company has been clearing land
within the permitted areas of the mine
site. Besides, final negotiations on ma-
jor Turkish supplied plant components
are complete and long lead orders have
been placed.
Kerim Şener, Managing Director of Ari-
ana Resources stated, “We are excep-
tionally pleased to report that the con-
struction phase of the 20,000 ounce per
annum Kızıltepe Gold Mine has now
commenced.” Şener also commented,
“Our exploration team is preparing for
a resource development trenching and
drilling programme, which we are cur-
rently expecting to commence in Octo-
ber 2015.”
September 2015
Industrial Production of Turkey Raised 7.2% in August According to Turkish Statistical Institute
(TURKSTAT), industrial production index
values of Turkey raised 7.2% in August
2015 with respect to August 2014 and
2.9% with respect to July 2015. Industri-
al production index is ramped beyond
the expectations in August, whereas the
previous expectations was 1.55%.
Nevertheless, the index shows 3.8% of
drop in August 2015 with respect to July
2015 for mining and quarrying industries.
October 2015
Source: stratexinternational.com
Newswww.miningturkeymag.com
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Mineral Resource Estimation by Mariana Resources
Source: marianaresources.com
Mariana Resources announced the
results of the maiden Mineral Re-
source estimate for the high grade
gold copper Hot Maden Project. TheMineral Resource estimate was pre-
pared by an independent mining
consulting company, RungePincock-
Minarco Limited, and was based on
assay results received for drill holes
up to, and including, HTD‐17 com-
pleted on 25th June and is reported
in accordance with the JORC Code
2012 edition and estimated by a
Competent Person as defined by the
JORC Code. According to the report,the results are as follows:
• Indicated Resource: 4.71 million
tons at 10 grams per ton (“g/t”) gold
and 2.2% copper, for a gold equivalent
grade of 13.4 g/t and a total 2.033 Mil-
lion Oz Gold Equivalent.
• Inferred Resource: 3.65 Mt at 5.5
g/t gold and 1.8% copper, for a gold
equivalent grade of 8.2 g/t and a total
0.968 Million Oz Au Eq.
•
Total Mineral Resource Estimate: 3Million Oz Gold Equivalent at a gold
equivalent grade of 11.2g/t.
CEO of Mariana Resources, Glen Parsons
emphasized the importance of estimat-
ing 3 million oz. Au equivalent within 6
months of post discovery period of Hot
Maden. “The close spaced drilling and
continuity in the mineralized system
allows for approximately two thirds of
the resource to be categorized as Indi-
cated which is a significant upgrade.”said Parsons and added “Further poten-
tial exists to extend the known resource
to both the north and south, as well as
at depth. In addition, the potential for
new discoveries being made along the
highly prospective Hot Maden fault/al-
teration zone remains high.”
August 2015
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8Fall 2015
Alacer Gold announced that Çöpler
Mine has produced its one millionth
ounce of gold on 19 August. World
class Çöpler gold mine which is oper-ated by Anagold Madencilik that is a
joint venture company between Al-
acer Gold and Lidya Madencilik, has
been producing gold since December
2010. Since then, 33.6 million tons of
ore grading at an average of 1.6 grams
per ton has been processed.
Rod Antal, Alacer’s President and Chief
Executive Officer, stated, “Today’s one
millionth ounce represents an impor-
tant accomplishment for the ÇöplerMine and its employees. I am most
proud of the fact that this milestone
was attained while recording almost
7 million man hours worked without a
lost time injury”.
August 2015
1 Millionth Ounce of Gold was Produced in Çöpler Gold Mine
Export Champions of Turkey in Mining Industry was Declared
Metallurgical Results of Valley Porphyry is Announced Pilot Gold announced the metallurgi-
cal results from the Valley Porphyry at
TV Tower. The metallurgical program
was designed to test the amenability
of mineralization to produce gold and
copper concentrates, and according to
the results, up to 40% copper and 84
g/t gold concentrates could be yielded
after flotation process.
Matt Lennox-King, President and CEO
of Pilot Gold stated, Valley porphyry
could potentially be a satellite to our
40% owned Halilağa copper-gold proj-
ect, 15 kilometers to the east.”
Valley porphyry, which was discovered
in 2011 by the company, is neighbor-
ing Halilağa deposit along with Hilltop
porphyry and Columbaz porphyry.
September 2015
Source: alacergold.com.tr
Source: tim.org.tr
Export Champions of 2014 were an-nounced by Turkish Exporters Assem-
bly (TIM) on 21st of June. Top 10 export-
ers among the all exporting companies
of Turkey and the Top 3 sectors among
26 sectors were awarded at the cer-
emony. Eti Maden takes the first place
of exporting champions in mining in-
dustry, whereas Çayeli Bakır İşletmeleri
is ranked 2nd and Ekom Eczacıbaşı is
ranked in 3rd place.
President of TİM, Mehmet Büyükekşi
pointed minimum 5% annual growth
for 2023 target and he added “We
need a strong government which will
carry Turkey to future with a good ac-cordance and flexibility. We expect
permanent success in microeconomic
subjects along with macroeconomicgains from our future government.”
June 2015
Centerra Gold Obtained EIA for Öksüt Centerra Gold received the final approval
of the environmental impact assessment
(EIA) for Öksüt gold project. Öksüt project
is expected to start gold production in
early Q2 – 2017.
Estimated mineral reserves of the project
is 26.1 million tonnes at 1.4 g/t gold con-
taining 1.2 million ounces of gold using a
cut-off grade of 0.3 g/t.
Centerra believes there is exploration
upside on the property as evidenced
by recent drilling which extended the
Guneytepe deposit and has identified
additional oxide material in the Keltepe
NW prospect a kilometre away from the
existing reserve area. Additional drilling is
planned once the necessary drill permits
are approved.
November 2015
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9
Ciner Group Becomes Leader Soda Ash Producer after OCI Resources Acquisition
Anatolia Resources Merges with Uranium ResourcesAnatolia Resources, a uranium explora-
tion and development company hav-
ing exploration operations and hold-
ing licenses within Turkey announcedmerger with Uranium Resources.
Uranium Resources will obtain the
rights of Temrezli Uranium Project in
Turkey, two 800,000 lb pa ISR uranium
processing plants and associated infra-
structure in South Texas and mineral
resource base at the Temrezli Project as
well as some other properties and cash
which are indicated in the articles of
the merger agreement.
“The Merger with Uranium Resourc-es provides an excellent solution
to Anatolia’s current objectives to
advance Temrezli into production as
quickly and efficiently as possible, and
brings with it the possibility of greatlyreducing the upfront capital costs if
we can successfully relocate and utilize
Uranium Resources’ Rosita ISR process-
ing plant in South Texas as currently
expected.” Said CEO of Anatolia Re-
sources Paul Cronin and added; “The
Rosita processing plant had major up-
grades and additions in 2007-2008 be-
fore construction was halted. It is fit for
our Temrezli Project, and has the added
benefit of already being designed andconstructed with the ability to scale up
the production profile from 800,000 lb
U3O
8per annum to 1.6 million lb U
3O
8
per annum with some additional up-
grades, which would accommodatepotential future production from satel-
lite operations that may feed into the
Temrezli central processing plant.”
Mineral resource of high grade Temrezli
Project is reported as:
• 2.008M tons @ 1378 ppm U3O
8for
6.1M lb U3O
8(Measured).
• 2.178 M tons @ 1080 ppm U3O
8for
5.2 M lb U3O
8(Indicated).
• 1.020 M tons @ 888 ppm U3O
8for 2.0
M lb U3O8 (Inferred). June 2015
Mining Export of Turkey Continues DownfallMining export statistics of Turkey for
H1 2015 are announced. The statistics
reveals that export of mining products
declined 9% in the first half of 2015
as against H1 2014. Turkey sold 11.51
billion tonnes of mining product for
$2.36 billion within the first 7 months
of the year.
Processed and block natural stone ex-
port ($1.11 billion) consist the majority
of overall mining export of Turkey. On
the other hand, boron products, chro-
mite, copper and zinc provide some im-
portant revenue to Turkey in H1 2015.
August 2015
Source: etisoda.com
Park Holding A.Ş, a subsidiary of Ciner
Group obtained 75% of OCI Resources
LP interests, which holds 51% of OCI
Wyoming, the leading soda ash pro-
ducer of the world, interests. There-
fore, Ciner Group becomes the new
leader soda ash producer of the worldwith 9% share of world’s total soda ash
production.
According to the definitive agreement,
approximately 73% limited partner inter-
est in OCI Resources, as well as its 2% gen-
eral partner interest and related incentive
distribution rights, are sold to Park Hold-
ing. The transaction is subject to custom-
ary closing conditions and regulatory
approvals and is expected to close by the
end of the third quarter 2015.
“We are really excited about our new
strategic relationship with Ciner Group
and their desire to help us expedite the
growth of our MLP. We think there will
be numerous opportunities to leverage
their expertise to help us grow our cash
flow,” said OCI Resources President and
CEO Kirk Milling.
“Ciner Group is pleased to welcome OCI
Resources to our family of companies.
With its position in markets that are
complementary to ours, OCI Resources
brings solid operational and financial
performance as well as industry-leading
safety performance,” said Turgay Ciner,
Chairman, Ciner Group.
Eti Soda, a subsidiary of Park Holding was
established in 1998 in order to extract,
operate and bring in economy trona
mine reserves in Beypazarı, Ankara. Com-
pany produces approximately 1 million
tons of soda ash annually since 2007.
July 2015
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10Fall 2015
Ariana Resources Designated the Next Gold Targets
Royal Road Looks for Deep Targets
Ariana Resources announced the re-
sults of a follow-up soil and rock-chip
geochemical programs conducted on
the Karakavak and Kepez West pros-pects at the Kızıltepe Sector of the Red
Rabbit Gold Project. Ariana plans to
commence construction of the mine
soon through the latest results.
The summary of the recent results are
as follows:
• Several additional significantly gold-
silver mineralized vein systems identi-
fied at Karakavak.
• Coincident gold (>20ppb Au) and
silver (>150ppb Ag) soil anomalies en-
countered along the full 1,800m strike
length of Kepez West.• Results underpin the broader re-
source potential of the wider Red Rab-
bit Gold Project, which has a current
global JORC resource of 475,000 oz of
gold equivalent.
• Kızıltepe mine construction expect-
ed to commence shortly ahead of first
gold pour in H2 2016 targeting 20,000
oz per annum.
“We are delighted that the additional
exploration work we are undertaking
is continuing to identify new zones of
resource potential.” said Kerim Şener,Ariana Resources Managing Director
and added, “Both Kepez West and Kara-
kavak contain several important drill-
ing targets for the Company, as it grows
its resource base at the Kızıltepe Sector
ahead of first production next year.”
July 2015
Royal Road Minerals announced the
drill results of 4 seperate holes from its
Gömeç gold project in Balıkesir prov-
ince of Western Turkey. The Gömeç
project comprises five contiguous
exploration licenses and is an early-
stage gold exploration project located
in the hinterland of Balıkesir province.
The company conducted two separate
reverse circulation programs in late
2014 and June 2015. After announcing
the first three hole’s drill results in July
2015, Royal Road announced four more
results from recently drilled holes. The
results are:
• GRC-024 10.0m at 1.0 g/t gold.
• GRC-025 14.0m at 1.0 g/t gold.
• GRC-026 22.0m at 1.0 g/t gold; and
10.5 g/t silver.
• GRC-027 52.0m at 1.0 g/t gold; and
10.8 g/t silver.
Drill hole GRC-027 is located 200 meters
away to the east of the broadly north-
west oriented fault zone intersected
in previous drilling” said Tim Coughlin,
Royal Road’s President and CEO, and
added “There is no obvious structure
at surface near GRC-027 which hints at
more than a simple fault control to gold
mineralization at Gömeç and provides
some further encouragement in terms
of size potential.”
August 2015
Pasinex Declared Their New Exploration PropertiesPasinex Resources Ltd. announced the
acquisition of 8 new zinc/lead proper-
ties in Adana province of Turkey. The
properties were acquired by Horzum
A.Ş. which is a joint venture company
between Pasinex Resources and Ak-metal A.Ş. The new properties are locat-
ed relatively close to Horzum’s current
projects namely Pinargozu and Akkaya,
as well as, the historic Horzum zinc
project. According to the announce-
ment, the properties were chosen for
their zinc potential because they have
similar carbonate hosted geology to
existing Horzum projects, and there are
some Turkish governmental approvals
to finalize acquisition.
“We are proceeding to achieve our tar-
get of being the largest zinc producer
company of Turkey conspiratorially. We
expanded our basin works strategically
with acquisition of 8 new properties.
Our partnership is in compliance with
Akmetal A.Ş, and both underground
operations and exploration surveys of
the JV accelerated through the teamwhich consists of local and foreign ex-
perts. Besides, we continue planning
and working to ramp up our produc-
tion capacity. Apart from these, we
have been doing our business by tak-
ing account of workers’ health and
safety at highest levels by using high
technology exploration and mining
equipment in our mines.” stated Soner
Koldaş, Country Director of Pasinex Re-
sources to Mining Turkey Magazine.On the other hand, the company com-
pleted a 4,760 ton (wet weight) lot sale
of high grade zinc material (with a lot
assay of 31.6% Zn) from its Pınargözu
zinc mine in August. Horzum A.Ş previ-
ously announced a 6,453 tons (wet wt.)
sale in December of 2014. Therefore,
company has reached to 11,213 ton
(wet wt.) total sales value.September 2015
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12Fall 2015
Alacer Gold Signed a $250 Million Project Finance Agreement
Minister Alaboyun: Natural Resources Ministry Could be Established
New Discovery at Hot Maden
Alacer Gold signed $250 million senior
secured project finance facility which
was previously announced. Alacer is
financed by a lending syndicate includ-ing BNP Paribas SA, ING Bank A.S. and
Societe Generale Corporate & Invest-
ment Banking with a 7 year term facility.
Rod Antal, President and CEO of Al-
acer stated, “The facility represents yet
another step forward in de-risking theSulfide Project and further strength-
ens Alacer’s balance sheet enabling
increased flexibility to advance growth.
We are extremely pleased to have
closed the agreement on very competi-
tive terms with this lending syndicate.”September 2015
Minister of Energy and Natural Re-
sources Ali Rıza Alaboyun comment-
ed that “Natural Resources Ministry”could be established, and a special law
about coal mining could be introduced
soon. Legislative regulations are pend-
ing because the parliament is closed,
however parliamentary committee for
Soma disaster declared their concerns
to Prime Mininster Ahmet Davutoğlu,said Alaboyun.
Alaboyun emphasized that Security of
Supply for Mining Law should be enact-
ed as well as Coal Mining Law. He stat-
ed that underground mining of Turkey
is not sufficiently known, but General
Directorate of Mineral Research andExploration (MTA) is capable to reveal
the details between 200 – 1000 meters
beneath the ground.
September 2015
The latest drilling results and recently
obtained drill permits for Hot Maden
Project, which is operated by the part-
nership of Mariana Resources and LidyaMadencilik, were announced on 6th
of October. The results of 4 drill holes,
including 3 exploration and 1 resource
extension holes are given as follows:
• HTD – 23 19.9m @ 1.1% Zn, 28.7m
@ 1.8% Zn, and 3m @ 7.6% Zn from
21.1m, 66.5m, and 127.0 m downhole,
respectively.
• HTD – 24: 36.3m @ 21.7 g/t Au +
5.51% Cu from 22.3m downhole. Plus
7.5m @ 2.2% Zn from 97.5m downhole.
• HTD – 25: 25.2m @ 7.3 g/t Au + 0.47%
Cu from 42.8m downhole Including
9.0m @ 17.8 g/t Au + 0.6% Cu (45.0m –
54.0m) Plus 23.5m @ 3.8% Zn and 7.5m
@ 3.9% Zn from 80.5m and 120.5m
downhole, respectively.
• HTD – 26: 15.5m @ 1.5% Zn and 12.5m@ 4.1% Zn from 62.0m and 82.5m down-
hole respectively. Plus 1m @ 3.5 g/t Au +
0.36% Cu from 139.0m downhole.
Glen Parsons, CEO of Mariana Resourc-
es commented, “Encouragingly, as each
new hole in the Au‐Cu zone delivers
further continuity and grade, the size of
the Hot Maden Initial Mineral Resource
continues to expand. We now have
four new mineralized holes outside of
the Initial Resource Area comparable
to those that fall within the resource,
which is very exciting from a resource
growth perspective.
With these new drill permits we can
hopefully continue intersecting the
Au‐Cu zone by stepping out in 50m
sections southwards. Prospectivity ofthis substantial untested area has been
greatly enhanced by the high grade Au
intercept in HTD‐25 announced today,
which is 250m along strike of the Initial
Resource Area. As drilling now advanc-
es to the south, the potential of this
new zone should become apparent.
In parallel with the drilling, detailed
metallurgical testing is planned to de-
fine the optimum processing route for
this ultra high grade ore and will assist
in forming the basis of a Preliminary
Economic Assessment for Hot Maden.”October 2015
Export Champions of Turkey in Mining Industry was Declared Export Champions of 2014 were an-
nounced by Turkish Exporters Assem-
bly (TIM) on 21st of June. Top 10 export-
ers among the all exporting companies
of Turkey and the Top 3 sectors among
26 sectors were awarded at the cer-
emony. Eti Maden takes the first place
of exporting champions in mining in-
dustry, whereas Çayeli Bakır İşletmeleri
is ranked 2nd and Ekom Eczacıbaşı is
ranked in 3rd place.
President of TİM, Mehmet Büyükekşi
pointed minimum 5% annual growth
for 2023 target and he added “We need
a strong government which will carry
Turkey to future with a good accor-
dance and flexibility. We expect per-
manent success in microeconomic sub-
jects along with macroeconomic gains
from our future government.”
June 2015
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Turkish Hard Coal Enterprises Discontinues Production at Kozlu
Eurasian Minerals Regains Akarca Project
Turkish Hard Coal Enterprises (TTK)
discontinues production at Kozlu Di-
rectorate in consequence of Ministry
of Labour and Social Security’s (ÇSGB)audit.
Production at Karadon and Amasra di-
rectorates of TTK were partially ceased
after the authorities of Ministry of La-
bour and Social Security, and TTK was
asked to make up shortages at these
directorates. Therefore, TTK adminis-
tration initiated a tender for hydrogensulphur sensor. TTK requested ÇSGB to
give extra time because the sensor is
not manufactured in Turkey, however
ÇSGB authorities decided to discontin-
ue production at Kozlu by the reason
of hydrogen sulphur sensor absence.
TTK Kozlu directorate, which has
1,200 tonnes daily coal production,is expected to lose 10 – 12 million TL
monthly as a consequence of ceasing
production.
October 2015
Vancouver based company Eurasian
Minerals regained the control of the
Akarca gold-silver project. Eurasianpreviously made an agreement with
Çolakoğlu Ticari Yatırım A.Ş. that com-
prises optionally acquiring 100% sub-
sidiary company of Eurasian Miner-
als, AES Madencilik A.Ş. in June 2013.
However, according to the announce-
ment which was released on 30th of
October, Çolakoğlu decided to foregoexercising the option.
The Akarca project is a Eurasian grass-
roots discovery highlighted by six sep-
arate gold-silver mineralized centers
occurring within a district-scale area.
Exploration completed to date in-
cludes 245 core and reverse circulation
holes totaling about 26,400 meters ofdrilling and property-wide geologic
mapping, geochemical sampling, and
geophysical surveys.
November 2015
First Trial of Ermenek Disaster Commenced The first trial of Ermenek disaster, which
caused 18 death of miners in a private
coal mine, completed on 18th of June.
According to Today’s Zaman, Has Şekerler
Mining Company Business Manager
Yavuz Özsoy was arrested in case of de-
stroying evidence or fleeing the country.
On the other hand, detention of owner of
the coal mine Saffet Uyar, top executive
at the Ermenek Cenne Lignite Coal Ltd.
Abdullah Özbey and a technical supervi-
sor Ali Kurt are extended by the court.
The next trial for the Ermenek disaster
will be held on 7 July 2015.
June 2015
Royal Road Minerals Commenced Drilling at Gömeç Project Royal Road Minerals, a gold and cop-
per focused mineral exploration and
development company, announced
the latest drilling results of Gömeç Gold
Project.
According to the announcement which
was published on 9th of June, drilling
permits had been received and then
the follow-up drilling commenced in
the following week.
The company plans to drill approximate-
ly 3000 meters including combination of
infill holes and step out holes along and
across strike of the previous drilling andexploratory holes on newly identified
and previously undrilled targets.
Gömeç Project, which is located in
Balıkesir province of Turkey, has a gold
mineralization with dominantly low-
sulfidation epithermal in style. The pre-
vious drilling results of Gömeç Project
was reported in 2014 as;
• GRC-014, 76 meters at 1.0g/t (includ-
ing 24 meters at 2.0g/t gold and 18.7g/t
silver).
• GRC-013, 56 meters at 1.0g/t (includ-
ing 22 meters at 2.0g/t gold and 15.6g/t
silver).
• GRC-015, 40 meters at 1.0g/t gold.
July 2015
Source: royalroadminerals.com
Source: haber.sol.org.tr
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Multi-level packageIn addition, Sandvik DD422i offers an
exceptionally wide range of drilling
assistance and automation levels to
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as well as reduce the training load. The
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nies respond to requirements emerging
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Smart drilling for future minesSandvik DD422i boasts powerful au-
tomation capabilities for the planning,
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operations based on the Sandvik In-
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The rig is compliant with teleremote
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AutoMine Monitoring offers real-time
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while AutoMine Process Management
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ning systems.
TECH SPECSPower pack: 2 x 75 kW IE3
Diesel engine: Cummins QSB4.5, 119 kW,
Tier 3 (optionally Tier 4 F)
Transmission: Hydrostatic
Cabin: FOPS and ROPS
Drilling coverage: 10,270 x 6,590 mm
Hole diameter: 43–63 mm
Hole length: Max. 5,270 mm
Rock drill: Sandvik RD525
Height: 3,145 mm
Width: 2,310 mm
Turning radius: 7,000 mm (out), 4,050 mm
(in) with 12’ feed
Operating weight: 26 tonnes
Control system: Sandvik Intelligent
Control Architecture (SICA)
Automation levels: Silver/Gold/Platinum
www.sandvk.com
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16Fall 2015
Culmination of 29 Years of Experienceand Knowledge Accumulation...
ENGEOTEKIn the last 29 years that we have been
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Profilewww.miningturkeymag.com
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18Fall 2015
INTRODUCTIONGold mining and exploration activity in
Turkey has witnessed a substantial and
sustained increase in the last decade,
largely due to the proactive and con-
structive policies of the Turkish Govern-
ment between 2002 and 2012 (Figure
1). Beginning with a single gold mine in2001, the country has now expanded its
industry to encompass nine mines pro-
ducing a combined 31t in 2014 (33.5t:
2013) of gold per annum (Figure 2). This
outstrips the combined gold produc-
tion of neighbouring countries (Arme-
nia, Azerbaijan, Bulgaria, Iran, Georgia
and Greece) by almost three times, de-
spite continuity of similar geology and
prospectivity across this region. Geo-
logically-speaking, Turkey is no more
prospective than its neighbours, so the
distinction from its peers as a producer
has been due to its perceived stability,
robust legal framework, relatively ef-
ficient bureaucracy, and its proactive
mining policy, all of which encourage
foreign investment.
Beyond its neighbours, it is notable
that Turkey is also the largest single
producer of gold in Europe, produc-
ing c.5t more gold per annum than all
other European gold producers com-bined; Finland and Sweden dominate,
producing c.15t between them. In ad-
dition to being relatively expensive to
operate in Europe, the continent also
typically views its mining industry as
an anachronism, a relict of a bygone in-
dustrial age finding itself at odds with
modern environmental concerns. Con-
trast this sentiment with that prevalent
in Turkey, where mining is seen as an
integral part of economic success and
as an industry that operates effectively
and productively under the most strin-
gent of environmental regulations. This
difference in attitude is the principal
reason for the success of the Turkish
gold mining industry in recent years.
However, this increasing trend in goldproduction, while positive, also needs
to be viewed critically from the per-
spective of resource depletion. It is
imperative for the long-term health
of the industry that further explora-
tion is encouraged. Fortunately, there
remains significant potential to make
new discoveries as the country remains
largely under-explored, in comparison
with many other gold producing na-
tions. The clearest indication of this isthe surprising fact that most deposits
discovered to date were outcropping
and located in the proximity of asphalt
roads. It is also notable that foreign
junior companies were responsible for
the majority of these discoveries dur-
ing a market-cycle down-trend in gold
price between 1989 and 1998. The sig-
nificance of foreign investment and the
application of predominantly foreign
risk-capital to the sector cannot be
underestimated, as Turkish investment
culture tends to be risk averse.
MINING INCENTIVES ANDPOLICYIn 2012, the Turkish Government intro-
duced a range of incentive schemes forTurkish industry. Mining was defined
as a strategic high-priority and allo-
cated one of the greatest ranges of in-
centives. Examples of such incentives
include: significant reductions in cor-
porate tax (from a statutory 20%), ex-
emption from VAT and custom duties,
interest payment support and elimina-
tion of employer social security premi-
um contributions. In addition, through
separate tax legislation, gold and silverproducers are able to reclaim VAT from
expenditure incurred through the ex-
ploration and development stages and
for producers there is no limitation on
the repatriation of profits following
taxation in Turkey.
In early 2015, the revised mining law
(number 6592) was passed. The law pri-
marily involved several modifications to
articles within the previous law (num-
ber 3213). A principal effect of the
new law will be to increase ground
turn-over and, over time, this will
Turkey: At The Cross-RoadsCONTACTS
Dr. Kerim Şener
Managing Director, Ariana Resources plc
E-mail: [email protected]
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
1,4
4,3
5,4 5,0 5,0
8,0
10,011,0
14,5
17,0
24,6
29,5
33,5
31,0
Figure 1. Bar chart of Turkish gold production from 2001 to 2014.
Gold Production / Year (Tonnes)
Articlewww.miningturkeymag.com
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reduce the number of areas currently
sterilised to exploration due to under-
utilisation. Under the new law, only
currently producing or relatively near
term development projects are likely
to be retained by licence holders ow-
ing to the enhanced costs associated
with their maintenance. Licence areas
will be auctioned and an effort made
to define licence areas according to
geological continuity of mineralised
features, allowing for larger licences to
become available in the future. A new
State royalty framework has also been
introduced, which scales cleverly ac-cording to the commodity price. An
allowance provided for in the previous
law regarding a 50% reduction in roy-
alty in the event a producer establishes
their own processing facility, has also
been maintained.
The new law will fundamentally change
for the better the way in which both
exploration and mining is undertaken
in the country in the medium to long
term. In the past, large areas of the
country were effectively sterilised to
exploration because licence owners
could hold ground at minimal cost,
undertaking limited work. An increase
in the quality of reporting require-
ments associated with holding explo-
ration licences and the introduction of
minimum expenditure commitments
under previous regulations will also en-
sure better and more serious explora-
tion in the long-term.
The modifications to the mining law
have been viewed generally positively
by the industry. However, the cost
structure associated with maintaining
licences in good standing, particularly
for operating licences, has increased
substantially and the cost of acquiringnew licences is significantly higher than
in the past; it is now expected that com-
petitive auction or licence transfer will
dominate the licence acquisition pro-
cess. This aspect of the new law may
discourage new greenfield-type explo-
ration activity, which relies on fast and
cheap access to ground.
OPERATING MINESThere are currently nine operating gold
mines in Turkey; a figure that both ex-
cludes satellite operations at the Koza
Gold owned Ovacık hub and mines for
which the dominant economic metal is
not gold. While Turkey has experienced
significant growth in the number of
new gold mines entering production, a
few smaller mines have been exhaust-
ed in the past decade. However, the
number of mines opening each year is
currently exceeding the number that
are closing, signaling the strength of
the current advanced project pipeline.
Kışladağ, located in Usak Province and
operated by Eldorado Gold Corpora-
tion, is a gold-bearing porphyry mined
by open-pit with processing via heap
leach. It has been producing at a rateof up to c. 310,000 oz per annum mak-
ing it the largest single producer in
Turkey. In 2015 the output is expected
to be somewhat less, targeting approxi-
mately 240,000 oz, and this is primarily
due to the mining of lower grade (0.7
g/t Au) ore as a result of expansion as-
sociated with a new pit phase. Cash op-
erating costs are consequently higher
this year at up to US$650/oz compared
with previous years where it was closer
to US$450/oz, when ore grades were
closer to 1 g/t Au. The mine entered
production in 2006 and produced its
Figure 2: Map of Turkey showing the distribution of gold mines and major projects by size.
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20Fall 2015
2 millionth ounce of gold during 2014,
with mining expected to continue for
19 years. Measured and Indicated re-
sources stand at 10.4Moz with Proven
and Probable reserves of 8.1Moz mak-
ing Kışladağ one of the largest gold de-
posits in Europe.Çöpler, located in Erzincan Province and
operated by Alacer Gold Corporation
(20% of the project is held by Lidya Ma-
dencilik San. ve Tic. A.S.), like Kışladağ
is a gold-bearing porphyry mined by
open-pit with processing via heap
leach. It has been producing at a rate of
up to c.270,000 oz per annum at a grade
of c.1.6 g/t Au making it the second
largest producer in Turkey. Cash oper-
ating costs are c.US$450-500/oz. Themine entered production in 2010 and
produced its 1 millionth ounce of gold
during 2015, with mining expected to
continue for 25 years. Measured and
Indicated resources stand at 8.2Moz
with Proven and Probable reserves of
3.9Moz (inclusive of sulphide zones).
Alacer is currently working on its ex-
pansion project to increase production
and to integrate fully the sulphide re-
sources in to the mining schedule.
Ovacık, located in İzmir Province and
operated by Koza Gold, initiated op-
erations in 1997 but due to permitting
issues remained on care-and-mainte-
nance until 2001. The mine operated
for some years under the ownership
of Newmont Mining Corp. before be-
ing acquired by Koza Gold in 2005, re-
maining in production ever since. In
addition to Ovacık, the nearby depos-
its of Çukuralan (active), Çoraklıtepe
and Kucukdere (both now exhausted)are/were mined as satellite operations
with ore trucked and processed at the
Ovacık CIL processing plant. Ovacık,
like all of its satellite deposits, is a low-
sulphidation system, containing three
major veins, with only the M and S veins
being mined underground. By 2007, all
open-pit mining had ceased and min-
ing continued through underground
development. The Çukuralan mine is
located 40km to the north of Ovacık,
with open-pit production commenc-
ing in 2010 and underground produc-
tion following in 2011. Production from
the Ovacık hub plant is c.160,000 oz
per annum. Combined Measured and
Indicated resources stand at 2.46Moz
with Proven and Probable reserves of
1.55Moz at the Ovacık hub.
Efemçukuru, located in İzmir Province
and operated by Eldorado Gold Corpo-ration, is an intermediate sulphidation
epithermal gold and base-metal vein
system mined by underground methods
with processing via gravity and flotation
concentration. It has been producing
at a rate of up to c.100,000 oz per an-
num, usually at high grades of c.8 g/t Au.
Cash operating costs are in the range of
US$550-600/oz. The mine entered pro-
duction in 2011 and is expected to be
mined for 11 years. Measured and In-dicated resources stand at 1.4Moz with
Proven and Probable reserves of 1.0Moz.
Himmetdede, located in Kayseri Province
and operated by Koza Gold, is located
on a thrust-fault hosted style of low-
sulphidation epithermal system and is
mined by open-pit with processing via
heap leach. It is the first gold mine to
have been discovered and developed
entirely by Koza personnel and entered
production in January 2015. While
Koza has had extensive experience op-
erating CIL gold mines in Turkey, this is
their first heap-leach operation. Koza is
planning to produce 100,000 oz per an-
num from oxide ore at a mining grade
of c.0.6 g/t Au. Measured and Indicated
resources stand at 0.93Moz with Proven
and Probable reserves of 0.62Moz.
Kaymaz, located in Eskişehir Province
and operated by Koza Gold, is located on
a listwaenite-hosted vein system and is
mined by open-pit with processing viaCIL. It has the capacity to produce at a
rate of c.110,000 oz per annum, typically
at high grades of c.5 g/t Au. The project
was commissioned in 2011 though pro-
duction has been interrupted on occa-
sion due to permitting issues, though
since early 2015 operations have re-
commenced. Measured and Indicated
resources stand at 0.46Moz with Proven
and Probable reserves of 0.44Moz.
A number of smaller producers such
as Bolkardağ (Gümüştaş Madencilik
ve Ticaret A.S.) and Midi (Yıldızlar
SSS Holding) make up the remaining
production, with some by-product
gold the result of mining Cu-Zn ore at
First Quantum Minerals Ltd Cayeli op-
eration near Rize and from the placer
operations owned by Pomza Export
Madencilik San. ve Tic. A.S. near Salihli.
DEVELOPMENT PROJECTSThere are a number of advanced de-
velopment projects in the country that
are at or nearing construction. These
projects will contribute to the next
wave of production and could see to-
tal Turkish gold output edge up over
its previous annual record of 33.5t,
which was set in 2013.
Red Rabbit, located across Balıkesir
and Kutahya provinces, is being devel-oped in 50:50 JV by Ariana Resources
plc and Proccea Construction Co. is in
construction. By H2 2016 the JV com-
pany, Zenit Madencilik San. ve Tic. A.S.
expects to have conducted its first
gold pour at its initial Kızıltepe mine,
with steady-state production of ap-
proximately 20,000 oz gold equivalent
per annum achieved shortly thereaf-
ter. The current mine plan involves
open-pit mining and CIL process-
ing over eight years at Kızıltepe (for
c.150,000 oz Au), with the potential to
expand this once additional resources
are identified within satellite deposits.
The mine will employ approximately
100 people. It is the intention of the
partners to develop its second mine
as a heap-leach operation at Tavsan in
the coming years, in order to achieve
a combined production rate of ap-
proximately 50,000 oz per annum.
Net proceeds will be distributed 51%Ariana, 49% Proccea once a US$33 mil-
lion development finance facility has
been repaid to Turkiye Finans Katilim
Bankasi A.S.
Altıntepe, located in Ordu Province, is
being developed in a 55:45 JV by Bahar
Madencilik San. ve Tic. Ltd and Stratex
International plc, respectively. By Q4
2015 the JV company, Altıntepe Maden-
cilik San. ve Tic. Ltd. expects to have con-
ducted its first gold pour, with steady-
state production of approximately
30,000 oz gold per annum. The current
mine plan involves open-pit mining
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22Fall 2015
Dağı approximately 18 months after
that at Kirazlı. Both mines will operate
via open-pit and heap-leach. At Kirazlı
an average grade of 0.75g/t Au and 11.8
g/t Ag and at Ağı Dağı 0.55g/t Au and
3.3 g/t Ag. Kirazlı will have a five year
mine life producing at a rate of 99,000 ozAu and 601,000 oz Ag per annum, and
Ağı Dağı a seven year life producing at
a rate of 143,000 oz Au and 271,000 oz
Ag per annum. Cash operating costs are
expected to be low and in the region of
US$500 per oz for Kirazlı and US$570 for
Ağı Dağı. At Kirazlı, Measured and Indi-
cated resources stand at 0.76Moz Au
and 9.20Moz Ag, with Inferred resources
of 0.11Moz Au and 1.64Moz Ag. At Ağı
Dağı, Measured and Indicated resourcesstand at 1.69Moz Au and 11.85Moz Ag,
with Inferred resources of 0.25Moz Au
and 1.53Moz Ag.
Öksüt, is located in Kayseri Province and
owned by Centerra Gold, is a high-sul-
phidation epithermal system. The de-
posit was discovered in 2007 by Stratex
International plc. Centerra completed
an earn-in to 70% of the project in 2012
and then purchased the remaining 30%
of the project in 2013 from Stratex for
US$20 million in cash plus a royalty
of 1% NSR (capped at US$20 million).
Öksüt contains Probable reserves of
1.2Moz. Average annual production
will be 112,000 oz over eight years. The
mining grade will be approximately 1.4
g/t Au, and cash operating costs will be
in the region of US$490 per oz.
Kestanelik, located in Çanakkale Prov-
ince and owned by Tümad Madencilik
A.S. (a subsidiary of Nurol Holding Inc.) is
a low-sulphidation epithermal system.The project was acquired from ASX-
listed Chesser Resources in late 2014
for US$40 million in cash. The deposit
contains a resource of 0.75Moz gold
and 0.73Moz silver. Prior to selling the
project Chesser had been in the process
of completing a pre-feasibility study fol-
lowing a positive scoping study result
that demonstrated potential to mine
the deposit at a rate of 63,000 oz Au per
year over six years. Tümad are currently
in the process of progressing the proj-
ect to feasibility stage.
Yenipazar, is located in Sivas Province,
owned by Aldridge Minerals Inc. is a
polymetallic VMS system containing
Au, Ag, Cu, Pb and Zn. Aldridge itself
is 30% owned by ANT Holding A.S.,
which is a diversified Turkish conglom-
erate specialising in the energy and
trade sectors. In terms of revenue split,the project will produce 55% precious
metals and 45% base metals, produc-
ing gold at an average annual rate of
54,000 oz over a twelve-year mine life.
At present, freehold land acquisitions
are underway and the company is pur-
suing project financing alternatives.
Once finance arrangements and pre-
construction planning has been com-
pleted Aldridge expects construction
to take 24 months.İnlice, located in Konya Province and
owned by Esan Eczacıbaşı was acquired
from NTF İnşaat Tic. Ltd. and Stratex In-
ternational plc for US$10 million in cash
in 2013. Like many development proj-
ects this appears to have been affected
by substantial delays in the granting of
requisite forestry permits. Typically for
a high-sulphidation epithermal system
generally poor leach recovery of gold is
recorded for the sulphide zone, so the
economic reserve is limited to 60,000
oz Au in the oxide material only. NTF
and Stratex had completed a heap-
leach feasibility study for the project
based on two to four year mine life pro-
ducing at a grade of c.2.3 g/t Au.
Taç and Çorak, located in Artvin Prov-
ince, had been held by Mediterranean
Resources Ltd and was bought by Cen-
giz Kaya for US$4.6 million in March
2015 via the sale of all outstanding
shares in Akdeniz Madencilik A.S.(Mediterranean Turkish subsidiary). In
2011, Mediterranean had published
a Preliminary Economic Assessment
for the project, considering produc-
tion of c.95,000 oz per annum over
c.7 years from two separate open pits.
The resources are substantially larger
and stand at c.1.9Moz at a grade just
under 1 g/t Au with potential for by-
product Cu, Ag, Pb and Zn. The proj-
ect has been plagued by the Yusufeli
dam development programme, which
formally commenced in early 2013.
This could leave the higher-value Taç
property partly underwater.
Kubaşlar, Mollakara and Söğüt are all
owned by Koza Gold and are at various
stages of development. While Kubaşlar
is likely to be developed as a satellite of
the Ovacık Hub, Söğüt would need to
be developed as a stand-alone mine.Likewise with Mollakara, in Agri Prov-
ince, though it appears highly unlikely
that Koza would be in a position to de-
velop the deposit due to the difficulties
associated with operating securely in
far eastern Turkey at the present time.
TREND IN EXPLORATIONPROJECTSA large number of foreign companies
have been responsible for much of thegold exploration in Turkey during the
last few decades, as they have had ac-
cess to the sort of risk-capital that has
not been available in Turkey. The Turk-
ish Gold Miners Association estimates
c.US$ 700 million has been spent on
exploration by foreign companies in
the past 25 years. Since a peak was
reached in 2012-13, the number of for-
eign companies with active exploration
projects has decreased somewhat and
this is partly due to the reduction of ex-
ploration budgets globally. The current
group of gold exploration and develop-
ment companies includes: Alacer Gold,
Alamos Gold, Aldridge Minerals, Ariana
Resources, Centerra Gold, Eldorado
Gold, Eurasian Minerals, Frontline Gold,
Mariana Resources, Nuinsco Resources,
Pilot Gold, Stratex International, Teck
Resources, Glencore and Zenith Miner-
als. Current projects of note are shown
in Table 1.While Turkish companies have proven
themselves as adept performers in the
sector and have done well with the
discoveries made possible by foreign
capital, they tend not to be as willing
to spend the often-considerable funds
required for exploration. It is apparent
that Turkish enterprise does not have the
same outlook on exploration risk as com-
panies that secure their funding from
international stock markets (notably the
AIM, ASX and TSX). It is therefore essen-
tial for the long-term health of the Turk-
ish gold sector to foster an environment
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24Fall 2015
that continues to encourage exploration
spending by foreign companies.
TREND IN LOCAL OPERATORSAs a corollary of the above trend for
foreign junior explorers, a pronounced
acquisitions strategy has emerged
amongst Turkish conglomerates in
the last five years in particular. This
trend was initiated primarily follow-
ing the successful partnership of the
Calik Group with what is now Alacer
Gold, and also in part due to the home-
grown success of Koza Gold. Since
then many other Turkish conglomer-
ates or holding companies, typically
with backgrounds in construction,
have entered the fray and have com-
menced a rampant acquisitions spreeof advanced gold projects. Such ac-
quisitions have taken place typically
for cash and at decent valuations, plac-
ing the average value per resource
ounce of Turkish gold projects at a
healthy US$54 (though valuations up
to US$168 per ounce are achieved for
Reserves). This quid pro quo has been
beneficial for the Turkish companies
wanting to develop mines and for the
junior explorers, which need to capital-
ise on their discoveries to sustain their
business model. As a result of these
acquisitions, there are perhaps twenty
Turkish companies that are now in-
volved in gold projects at varied stages
of development (Table 2).
INTREPID TURKSNot all Turkish mining companies have
felt themselves restricted by nationalborders. Indeed, in 2012 an article in
Mining Journal (Turkey: Constructing
the Future) predicted that some Turk-
ish companies would start looking
at projects more globally. In the few
years since, Koza Gold, MNG Group
and TAHE International Mining Inc.
among some others, have taken the
lead on overseas gold projects. It will
be encouraging to see if these home-
grown Turkish gold miners see successin the international arena. There is ev-
ery reason to believe that they will be
successful, especially given the reach
Turkish construction firms already
have throughout Africa, the Middle
East and Central Asia.
Koza Gold has signed exploration joint
venture agreements with Lonmin plc,
IMC Exploration (both in Ireland) and
Greenore Gold plc (in Scotland). Koza
also established a company in the UK
capitalised at £60 million to develop
its overseas interests. It remains active
and on the look out for new acquisi-
tions and joint venture opportunities.
In early 2015, the MNG Group bought
the Balogo gold project, in Burkina Faso
for US$10 million in cash from ASX-
listed Golden Rim Resources, involving
certain staged payments including US$
3 million on commercial production
and a 1% NSR. The Balogo project has
an Inferred resource of 850,000t, grad-ing 6.8 g/t Au for 185 000 oz Au.
TAHE International Mining Inc. was in-
volved in the discovery of a 0.46Moz
Abu Sara gold mine in Sudan. In 2012,
the company finished construction of
its processing plant and producing its
first gold in early 2013. Abu Sara was
initially producing at a rate of 10,000
ounces of gold per year at a grade of
about 3 g/t Au but gold production
was increased to 25,000 oz per annum.
Further expansion plans could see
the project producing up to 100,000
oz per annum in the event that the
Project Company Deposit Style Stage
Berta Glencore (64%)/Nuinsco(36%)
Porphyry Cu-Au Exploration
Dursunbey Polimetal (50%)/Alacer(50%)
Low-sulphidation epither-mal gold base-metal
Resource
Gömeç Oremine (100%) Low-sulphidation epith-ermal
Exploration
Halilağa Pilot Gold (40%)/Teck (60%) High-sulphidation PEA
Himmetdede South Impact Replacement epithermal Exploration
Hot Maden Lidya (70%)/Mariana (30%) Intermediate sulphidationepithermal
Resource
Karaayı Pilot Gold (40%)/Teck (60%) High-sulphidation Exploration
Kavaklıtepe Zenith Minerals Ltd optionfrom Teck Resources Ltd
Low-sulphidation epith-ermal
Exploration
Salınbaş Eldorado (51%)/Ariana(49%)
Replacement epithermal& porphyry Cu-Au-Mo (atArdala)
Resource
Sisorta Eurasian Minerals High-sulphidation epi-thermal
Resource
TV Tower Pilot Gold (40%)/Teck (60%) High-sulphidation epi-thermal
Resource
Table 1: Active exploration gold exploration and resource development projects in Turkey. Provided in
alphabetical order by project name.
Turkish
Company
Part ner Projec t(s)
Anadolu Export n/a Karaağaç
ANT Holding(30% shareholder inAldridge)
Aldridge Minerals Yenipazar
Bahar Madenilik(55%)
Stratex International(45%)
Altıntepe
Çolakoglu TicariYatırım (option)
Eurasian Minerals Akarca
Esan Eczacıbaşı n/a Şahinli, Serçeler,İnlice
Lodos Maden Muratdere
Lidya Madencilik(80%)
Alacer Gold (20%) İvrindi,Sarıçayıryayla,Cevizlidere
Lidya Madencilik
(50%)
Alacer Gold (50%) Karakartal,
DursunbeyLidya Madencilik(20%)
Alacer Gold (80%) Çöpler
Lidya Madencilik(70%)
Mariana Resources(30%)
Hot Maden
Oremine (n/a) (n/a) Gömeç
Özaltın Eti Bakır A.S.(royalty)
Cerattepe
Polimetal (50%) Alacer (50%) Dursunbey
ProcceaConstruction Co.(50%)
Ariana (50%) Red Rabbit(Kızıltepe andTavşan)
Santral Madencilik n/a Taç/Çorak
Tümad Madencilik n/a Kestanelik
Yıldızlar SSSHolding
n/a Midi
Table 2: Examples of Turkish companies with gold
projects showing their partners (if any) and the name
of the projects in which they are interested. Provided
in alphabetical order by Turkish Company name.
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expected resource additions are re-
alised through further drill-testing.
RECENT DEVELOPMENTS ANDCHALLENGESIn the light of the above analysis, the
reader would be forgiven for believ-ing all is generally rosy in the Turkish
gold mining sector. However, in recent
years, the view of Turkey has shifted
from that of an emerging-market dar-
ling to one viewed more cautiously by
the increasingly discerning exploration
investment world. Simplistically, this
shift in sentiment is apparent from the
number of foreign exploration compa-
nies represented in Turkey. This peaked
in 2012-13, with 24 companies incur-ring record exploration expenditure,
compared with the current number of
16. While this change is at least partly
due to the tougher environment for
the mining sector globally with de-
creased commodity prices, it is also a
result of the conditions uniquely af-
fecting the Turkish mining industry in
recent times. It is also notable that the
majority of departees were Australian,
which is significant in that Australian
junior explorers are typically more risk-
sensitive than their Canadian or British
counterparts. Therefore, the presence
or otherwise of Australian explorers is
usually a good barometer for explora-
tion investment conditions in any giv-
en country.
Specific challenges from the perspec-
tive of foreign investors are:
1. Political developments: Political un-certainty following the 7 June 2015 elec-
tions and the failure of the political par-
ties to establish a majority government.
Anagold - Çöpler open pit operation
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26Fall 2015
It would appear that this uncertainty will
continue until new elections on the 1 No-
vember 2015 at the very least.
2. Security issues: A greater numberof security threats across the country,
particularly in the south-east, which are
reflective of increased regional insta-
bility. It would appear that SE Turkey,
although highly prospective, will again
miss out on sufficient exploration in the
medium term.
3. Permitting delays: Stultifying con-ditions imposed by the Prime Minis-
terial Decree of 16 June 2012 which
resulted in decision-making for land
access permits by relevant government
departments (e.g. forestry) the affair of
the Prime Ministry.
4. Bureaucratic uncertainties: Rap-idly changing legislation has resulted in
periodic uncertainty and confusion for
both the bureaucracy and the mining
sector. The mining law has been modi-
fied three times in just over a decade,
while environmental legislation and re-
porting requirements are also far from
static.
5. Access to ground: The small num-ber of recent government licence
auctions limit the ability of exploration
companies to access ground quickly
and easily. In addition to this, the geo-
logical survey (MTA) as been placed in a
directly competitive situation with the
industry and has been granted a pre-
emptive right on licences.
Due to perceived risk factors, Turkey is
now ranked more poorly than it was
in the recent past; slipping from 29th
place in 2013 to 78th place in 2014 (out
of 122) in the Fraser Institute Annual
Survey of Mining Companies. Conse-
quently it has become increasingly dif-
ficult to attract foreign exploration and
development capital to the country. It
is worth noting that the current Fraser
Institute ranking positions Turkey be-
tween Eritrea (77th) and Mozambique
(79th), which should be taken as seri-
ous indictment of government actions
in recent times. It is also worth noting
the specific comment made by the Fra-ser Institute concerning Turkey:
“There is extreme difficulty getting any
environmental and other permits/licens-
es from the government due to the poli-
tics of the Erdogan administration.”
It has been demonstrated that capital
flows preferentially to those locations
that provide the greatest security and
competitive advantage. Although Tur-
key made significant adjustments to
ensure it became a focus for foreign
investment in the recent past, through
the introduction of liberal and pro-for-
eign investment policies, current devel-
opments are causing a marked nega-
tive effect on the perception of Turkey
as a solid investment jurisdiction. This
is witnessed explicitly in recent cross-
sector greenfield investment figures,
which countrywide were previously in
the range of US$8-10 billion per annumbefore dropping to US$4.6 billion in
2014. With continued political uncer-
tainty and regional risk factors becom-
ing more pronounced in the eyes of in-
ternational investors, it is probable that
foreign investments in the country will
continue to fall.
For any country, it takes a long time for
confidence to be built, particularly for
an industry sensitive to long-lead times.
Turkey was already known as a coun-try that involved greater than average
lead times to bring gold discoveries to
production; 17 years on average (com-
pared with a 10 year global average).
This is attributable directly to the dif-
ficulties associated with the navigation
of bureaucratic hurdles in the shifting
political landscape prior to 2002. Since
then Turkey has done a great deal to
build a better and more stable reputa-
tion, though recent developments now
put this at risk.
The slight drop in gold production
that Turkey witnessed between 2013
and 2014 may reflect the impact of
this changing environment for invest-
ment. While two data points are hardly
a trend, it is probably more than coin-
cidence that the drop in output cor-
responds to the same period in which
permitting issues started to put brakes
on the industry and at a time when
there were temporary government-im-posed suspensions of mining activities
at the operations of Koza Gold. This ob-
servation needs to be tempered in the
knowledge that other factors have also
been in play, notably the sharp fall in
the US dollar gold price, which meant
that producers have naturally shifted
to mining higher grade ore (which may
not be there to mine!).
Compounding the situation for the gold
mining sector overall are the specific cir-
cumstances of Koza Gold. Over the past
decade, Koza transformed itself from a
single mine producer to a Turkey-wide
Ariana Resources - Kepez West prospect
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Turkey, Ankara Ofice
Address: 1314.Cadde (Eski 8. Cadde)1329. Sokak (Eski 72. Sokak)No: 12/5 Öveçler-Ankara, Turkey Tel: +90 (546) 646 00 06
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Turkey
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operator with up to four mines produc-
ing at any one time. Taking on the old
Normandy/Newmont mines at Ovacık
and Mastra, it transformed the outlook
for the Turkish gold industry by creat-
ing a truly home-grown gold mining
enterprise. Listing on the IstanbulStock Exchange in 2010 following an
IPO raise of US$436 million, Koza’s suc-
cess resulted in several other Turkish
conglomerates taking an interest in the
sector, with several now demonstrably
emulating its development. It is espe-
cially unfortunate, that in recent times
the Koza group of companies appears
to have been singled out by the gov-
ernment as part of a broader political
gambit. Confidence in the Turkish goldindustry will be further eroded if the
Koza group of companies remains a po-
litical target, for while Koza is a Turkish
company, it is approximately 25% for-
eign-owned, and foreign capital has a
propensity for being frightened easily.
From the perspective of foreign inves-
tors, current uncertainties in Turkey
are having a particular effect on the
availability of funding for exploration.
In addition, recent changes to mining
legislation, although largely encourag-
ing, have been hampered by a delay
in publication of the associated regula-
tions. Furthermore, permitting on anygovernment land (e.g. forestry) has
been problematic since the Prime Min-
isterial Decree was issued. What was
initially considered by observers to be a
temporary measure, lasting perhaps six
months, is still in force over three years
later. This issue alone has been respon-
sible for considerable loss of confidence
in the Turkish mining industry and, giv-
en the scale of its negative impact, it is a
mystery why it remains in force.It is remarkable that the Turkish gold
mining industry has proved as resilient
as it has in the face of such challenges.
The low cost of production that Turk-
ish mines have been able to maintain
is certainly a reason for this. Unit costs
for both exploration and mining activi-
ties are relatively low by international
standards, with several of the world’s
lowest cost producers located in the
country. The encouraging range of in-
vestment incentives for mining com-
panies has also helped promote the
industry.
Despite these recent developments, itis important to emphasize that Turkey
will remain at the forefront of gold pro-
duction in Europe for the foreseeable
future. In only a decade, it has trans-
formed itself as a potential investment
destination for gold mining and explo-
ration. In contrast with the policies of
its neighbours, Turkey has taken sig-
nificant strides to create a positive en-
vironment for investment in the sector.
This has clearly paid off and it demon-strates the absolute imperative of sta-
bility, rule of law, efficient and honest
bureaucracy and sensible mining poli-
cies for exploration and mining invest-
ment decision-making by international
companies. Turkey would do well to
ensure it retains its track record in this
respect so that it maintains its position
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28Fall 2015
as a premier destination for mining
companies globally.
IMPORTANCE OF EXPLORATIONIn many ways the producing gold mines
of today represent the low-hanging
fruit of the Turkish gold mining sector,as foreign companies largely discov-
ered these deposits about 20 years ago
during an earlier wave of exploration.
If the industry is not provided with the
opportunities to continue exploration
through supportive policies and swift
permitting, the gold mines of tomorrow
will not be discovered and the Turkish
gold industry could wither on the vine.
Exploration in Turkey is unfortunately
stifled because of the continued diffi-culties of obtaining exploration licenc-
es and permits cost-effectively and
due to the infrequency of government
auctions. Following the introduction
of the Prime Ministerial Decree, these
difficulties have applied even for ex-
ploration-stage projects, upon which
delays and uncertainties are unten-
able for most explorers. Consequently
some companies have been revising
their position on Turkey and diversi-
fying portfolios elsewhere, driven by
recent difficulties with licence acquisi-
tion and permitting.
As a result, the outlook for the Turk-
ish gold mining industry will continue
to see production from existing op-
erations and from the development of
several advanced projects now owned
by Turkish companies. However, gold
exploration is decreasing dramatically
in part due to circumstances across the
sector globally but also exacerbated bycertain decisions that have been made
by the Turkish Government in recent
times. It is important for the govern-
ment to recognise that exploration is
what drives the industry in the long-
term and it is essential that the country
adopt explicit policies that enhance
the success rate of exploration. At the
very least, it is essential for mining and
exploration to be exempted from the
Prime Ministerial Decree to ensure the
long-term health of the industry. This
would enable companies to commit to
spending on exploration once more,
without excessive delays and uncer-
tainty, and encourage the develop-
ment of new mines.
Beyond that, and this may be wishful-
thinking, the government could also
permit all geoscientific data held by
the geological survey (MTA) and licence
data held by the mines department (MI-
GEM) to be made publically available
online and at no cost to the end user. All
relevant historic exploration and mining
data should be digitally captured from
reports and made available through
the same system, which would ensure
licence owners do not need to repeat
the same exploration undertaken in the
past. There is evidence to show that this
approach fosters an environment that
contributes significantly to long-term
exploration success. It is a model thathas worked exceptionally well for coun-
tries like Australia, which notably is the
world’s largest producer of gold outside
of China. Turkey could and should emu-
late the Australian model.
CONCLUSIONSThe Turkish gold industry lives or dies ac-
cording to the macro-economic trends
in the sector, perceived investment sta-
bility of Tu