Fall 2015 | Vol 5 | Number 9 | www.miningturkeymag.com

Mining & Earth Sciences Magazine

by ISSN: 2146-9423

Turkey: At The Cross-RoadsGold Metallogeny of Turkey – A Quantitative Assessment

The Largest of Europe:Tüprag Kışladağ Gold Mine

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Cover PhotoThe Kışladağ Gold Mine is an open-pit operation which belongs to Tüprag Metal Madencilik San ve Tic. A.Ş. is a wholly owned Turkish subsidiary of the Canadian-based mining firm Eldorado Gold. The Kışladağ mine site is located on the administrative boundary be-tween the Ulubey and Eşme districts of

Uşak province. The site is approximate-ly 180 kilometres east of the province of İzmir and about 30 kilometres to the southwest of the provincial seat of Uşak, in the Aegean Region. Kışladağ is the largest gold mine of Europe based on annual gold production.

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

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 TowerPilot 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 venture between 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 oz recovered 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 into production. 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 and appropriate acquisitions.”

November 2015

Construction of Kızıltepe CommencedAriana 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 AugustAccording 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

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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. The Mineral 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: 3 Million 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

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 Çöpler Mine 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 AnnouncedPilot 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 macroeconomic gains from our future government.”

June 2015

Centerra Gold Obtained EIA for ÖksütCenterra 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

Fall 20159

Ciner Group Becomes Leader Soda Ash Producer afterOCI 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 announced merger 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 greatly reducing 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 and constructed with the ability to scale up

the production profile from 800,000 lb U3O8 per annum to 1.6 million lb U3O8

per annum with some additional up-grades, which would accommodate potential 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 U3O8 for 6.1M lb U3O8 (Measured).• 2.178 M tons @ 1080 ppm U3O8 for 5.2 M lb U3O8 (Indicated).• 1.020 M tons @ 888 ppm U3O8 for 2.0 M lb U3O8 (Inferred).

June 2015

Mining Export of Turkey Continues Downfall Mining 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 world with 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

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 team which 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

Fall 201511

Mariana Resources Receives Pleasing Drilling Results at Hot MadenMariana Resources published anoth-er report on 23rd of June regarding on-going drilling operations at Hot Maden. The company announced that they have received the assays for two drill holes. Assays reveal the continuity of a very high grade Au‐Cu core within the broader, significantly mineralized Au‐Cu zone, and with mineralization remaining open to the south as well as both up dip and down dip.According to the report:• Drill hole HTD‐13, the step back hole designed to test the down‐dip exten-sion to the high grade Au‐Cu mineral-ization intersected in HTD‐05, intersect-ed 109.9 m @ 11.9 g/t Au and 1.13 % Cu from 259.1m,•Bonanza grade interval of 12.9m

@ 89.6 g/t Au and 1.7% Cu from 259.1m,

•Between 211m‐223m @ 3.6% Zinc (Zn) and between 233m‐236m @ 7.4% Zn.

• Drill hole HTD‐12, the step forward hole designed to test the up‐dip exten-sion to the Au‐Cu mineralization inter-sected in hole HTD‐11, intersected 38m @ 3.0 g/t Au and 1.74% Cu from 227.0m,

•Between 235m‐240m @ 7.5 g/t Au and 2.1% Cu and between 253m‐255m @ 17.5g/t Au and 5.2% Cu,

•Between 148.8m‐175.6m @ 1.6% Zn and between 191m‐195m @ 1.3% Zn.

•Between 37m‐45m @ 2.2 g/t Au and 0.23% Cu, between 70.7m‐88.0m @ 1.05 g/t Au and 0.31% Cu, between 104m‐114m @ 1.29 g/t Au and 0.85% Cu, and between 116m‐119.5m @ 1.96 g/t Au and 0.74% Cu.

Glen Parsons, CEO of Mariana Resourc-es points out the continuity of high grade Au-Cu mineralized zone on com-pany’s focus area and very high grade Au-Cu core. Parson stated; “Future drill-ing will continue to work on defining the limits of the Au‐Cu mineralization, especially close to surface (up dip) but also at depth (down dip) and towards the south.” and added “Hole 15 has now been completed. Holes 16 and 17 are still underway and I look forward to up-dating the market accordingly.”On the other hand, the previous drill re-sults for Hot Maden was announced as given below:• HTD‐10 intersected 100.2 meters (m) @ 5.6 grams per ton (g/t) Au + 1.3

percent (%) Cu from 81.8m; including 43m @ 11.7 g/t Au + 2.2% Cu from 98.7m. Additional intercepts of 47m @ 0.82% Zn (23m‐70m) immediately to the west of the Au‐Cu zone; 44m @ 0.7% Zn (195m‐238m) and 40m @ 0.56% Zn (264m‐284m) immediately to the east of the Au‐Cu zone.• HTD‐11 intersected 107.7m @ 4.2 g/t Au + 0.9% Cu from 255.3m; including 14.2m @ 27.0 g/t Au + 0.94% Cu ad-ditional intercepts of 11m @ 1.99% Zn (147m‐158m) and 18.5m @ 1.17% Zn (183.5m‐202m) immediately to the east of the Au‐Cu zone. • Drilling to date indicates a corridor of higher Au grades (>10 g/t Au) may be correlated (from north to south) from the sections with holes HTD‐04, HTD‐10, HTD‐05, and HTD‐11:•HTD‐04 33.4m @ 18.3 g/t Au &

3.3% Cu•HTD‐05 13.0m @ 88.0 g/t Au &

2.5% Cu•HTD‐10 43.0m @ 11.7 g/t Au & 2.2

% Cu•HTD‐11 14.2m @ 27.0 g/t Au &

0.9% CuJune 2015

Trustee panel is Appointed to Companies of Koza İpek HoldingTrustee panel is appointed to Koza İpek Holding and 22 companies of the hold-ing by the order of Ankara 5th Criminal Court of Peace on October 27. The court appointed the trustee panel with allega-

tions of “promoting and financing terror”.Koza İpek Holding comprises 22 com-panies including prospecting and de-velopment companies. Koza Altın, İpek Doğal Enerji and Koza Anadolu Metal

companies are traded at the İstanbul Exchange. Koza Altın İşletmeleri is the first Turkish gold producing company in Turkey.

October 2015

Odaş Enerji Takes Over Suda MadenA Turkish energy company, Odaş En-erji keeps investing in mining indus-try. The company acquired the stakes of Suda Maden A.Ş after the compa-ny’s recent investments in coal and gold mining industries. The acquisi-tion was made for USD 1 million on 28th of October. Suda Maden holds 2 exploration and 2 mining licenses in Murat Mountain

region of Kütahya – Uşak provinces. Odaş plans to decide managing plan of Suda’s antimony mine and pro-cessing plant after the reserve es-timation for expansion area is com-pleted. Odaş, on the other hand, takes over the Suda’s another available license, particularly the Karaağaç Gold Mine announced to the public through

the Material Disclosure of January 29, 2015, which takes place at a distance of only 5 kilometers to the Uğurluca Licensing Site that seems to have gold reserves, and it could be economically evaluated in conjunction with the Karaağaç License.

November 2015

12Fall 2015

Alacer Gold Signed a $250 Million Project Finance Agreement

Minister Alaboyun: Natural Resources MinistryCould 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 the Sulfide 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 and Exploration (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 Lidya Madencilik, 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 of this 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 DeclaredExport 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

Fall 201513

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 hydrogen sulphur 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. Eurasian previously 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 forego exercising 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 of drilling and property-wide geologic mapping, geochemical sampling, and geophysical surveys.

November 2015

First Trial of Ermenek Disaster CommencedThe 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 ProjectRoyal 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 and exploratory 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

14Fall 2015

Intelligent Design

Sandvik Mining has launched Sandvik DD422i, the first of its Next Genera-tion underground hard rock drill rigs, with a strong emphasis on the human-machine interface. The completely redesigned drill offers top-level per-formance in safety and ergonomics for operators, increased productivity at a lower cost and wide-ranging automa-tion options to carry the mining opera-tion far into the future. Development drilling is the key to un-locking an underground mine’s ore, and the new Sandvik DD422i drill rig offers a wide range of new features to improve excavation of these tunnels in hard rock mines.

TrendsetterSandvik DD422i is the first release in the company’s upcoming generation of advanced underground drill rigs. These Next Generation jumbos respond to fu-ture trends in mining: operators must comply with increasingly challenging safety and environmental require-ments, while mine managers need more efficient cost control and must be able to provide new operators with ad-

vanced on-board drilling assistance in typically remote mining locations.Four key elements make Sandvik DD422i a unique new rig that will raise the industry standard to a new level: a new drilling and boom control system, better cabin ergonomics, an improved carrier, and wide-ranging drilling assis-tance and automation options.

Better speed and service life The rig’s drilling and boom control system for the first time introduces torque-based drilling control in the Sandvik mining jumbo fleet. Accord-ing to test results, the optimized torque control significantly reduces jamming of the drilling tools and helps opera-tors not only to gain better service life for their tools but also to reduce the throughput time in face drilling. The improved control system also helps to increase the speed and accuracy of the boom movements. Another key feature of Sandvik DD422i is the modern ergo-nomic cabin. The entirely new design improves visibility during both drilling and tramming, thanks to lower and wider boom support and larger win-

dows. The windows and the steel struc-tures of the cabin frame include special acoustic materials that significantly re-duce noise levels. Dust levels have also been optimized through careful design and comprehensive simulations. All the controls for drilling and tramming are ergonomically located and freely adjustable by operators according to personal preferences.

Carrier evolutionThe third major feature of Sandvik DD422i is the improved carrier based on the latest available technology.These new solutions include a Tier 4 F engine option for reduced emissions, hydrostatic transmission for better tram-ming control as well as comprehensive diagnostics, service points accessible at ground level, and light yet durable cov-ers to make the maintenance as easy as possible. The multi-voltage electric sys-tem is a novelty that allows relocation of the drill rig from one electrical system to another with minimal changes. A special current reducer unit is an option that can decrease the current draw by up to 20 percent.

Profilewww.miningturkeymag.com

Fall 201515

Multi-level packageIn addition, Sandvik DD422i offers an exceptionally wide range of drilling assistance and automation levels to improve productivity and lower costs as well as reduce the training load. The Silver level features the basic measure-ments of rock drilling, including drill-ing depth and feed angle. The Gold level has additional capabilities for on-board visualization of the drill plan as well as the market-leading iSure plan-ning, reporting and optimization soft-ware. The Platinum level maximizes the automatic face drilling capabilities of the rig.Platinum, the highest automation level, also includes a new, semiautomatic fea-ture combining both manual and au-tomatic drilling functions. The project progressed smoothly, and the first pro-totype drill rig was unveiled in front of customers in September 2013. From the very beginning, the goal was to build a drill rig that could help mining compa-nies respond to requirements emerging in both the medium and long term.

Smart drilling for future minesSandvik DD422i boasts powerful au-tomation capabilities for the planning, measuring and follow-up of drilling operations based on the Sandvik In-telligent Control Architecture (SICA),

which provides commonality with oth-er Sandvik equipment.The rig is compliant with teleremote control and can be integrated with the AutoMine Drilling system for au-tonomous drilling operations and thus reduced risk to personnel, better accu-racy and higher productivity.AutoMine Monitoring offers real-time data collection for efficient fleet man-agement and predictive maintenance, while AutoMine Process Management keeps shift supervisors up to date on rig availability, utilization, condition and output and enables optimization of the mining operations. Furthermore, the Iredes v1.0 interface provides com-patibility with third-party mine plan-ning systems.

TECH SPECS Power 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.sandvik.com

16Fall 2015

Culmination of 29 Years of Experience and Knowledge Accumulation...

ENGEOTEKIn the last 29 years that we have been operational, with the help of our spe-cialized staff, we have provided every service in manner that is accurate, time-ly and well beyond the expectations of our customers and as such displayed exceptional performance in acquiring our experience in the field of building insulations covering an area of more than 24,000,000 m² as well as waste-solution storage and dam site applica-tions implemented on an area in excess of 10,000,000 m².

FOR YOU, OUR VALUEDCUSTOMERS;For purposes of ensuring that the project we have undertaken is suc-cessfully accomplished and has results benefiting you, we carry our work well aware of the importance of CORRECT DIAGNOSIS, CORRECT PRODUCT AND

CORRECT APPLICATION components of the job involved. In all the work we perform, we primarily act in awareness of our environment as well as the peo-ple we serve and as such we follow the products that are in possession of the latest technology in line with the needs of the market and develop our product range as well as our services continu-ously in line with your needs. In each and every stage, from project prepara-tion to the handover of the job to the customer, we provide services without any concession from quality and free of any deficiencies.We solve problems that may seem unsolvable in building insulation and environment with the extensive site ex-perience and knowledge that we have acquired in these fields. In doing so, we also endeavor to comply with the appli-cable standards.Products: HDPE-LLDPE Geomembrane,

Leak Location Geomembrane, Geosyn-thetic Clay Liner, Non Woven-Woven Geotextile, Drainage Net and Compos-ite, Erosion and Discharge Mat, Geogrid and Soil Reinforcement Material, As-phalt Grid, HDPE and PVC Drainage Pipe, Gabion.Applications: Heap Leach Area, Land-fills, Mining Hazardous - Nonhazard-ous Waste Storage Areas, Solution Storage Areas, Tunnel, Ponds, Water and Wastewater Treatment, Irrigation Canals, Oil Tank Applications, Aqua-culture, Artificial Ponds, Embankment and Soil Reinforcement, Retaining Structure, Canal and Drainage Ap-plication, Erosion Control, HDPE-PVC Pipe Fitting and Applications.

www.engeotek.com

Profilewww.miningturkeymag.com

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 in 2001, 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 gold production, 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 is the 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 for Turkish 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 silver producers 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: a.k.sener@arianaresources.com

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1,4

4,35,4 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

Fall 201519

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 acquiring new 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 rate of 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.

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. The mine 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 via CIL. 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

and heap-leach processing over three years (for c.110,000 oz Au), with the potential to expand this production to perhaps 8 years once satellite deposits are developed. The mine will employ approximately 100 people. Bahar will recover its development costs from 80% of net free cash flow; thereafter net proceeds will be distributed 55% Bahar, 45% Stratex. The company is awaiting the outcome of certain legal challenges relating to the original Envi-ronmental Impact Assessment though does not expect these to inhibit the advance of the project to production in the coming months.Cerattepe, located in Artvin Province, is being developed by Özaltın İnşaat Tic. ve San. A.S. under a royalty agreement with Eti Bakır A.S. (a Cengiz Holding company) primarily as an underground copper mine though with significant potential for by-product gold. The project was previously owned and advanced to feasibility by Inmet Min-ing, though the mining licences were

eventually cancelled following several overlapping legal challenges which culminated in 2008. The project was then tendered by the Turkish Govern-ment in January 2012 and Özaltın se-cured the project in auction for 97.6 million TL, on the condition that they produce 500,000 tonnes of ore and 10,000 tonnes of blister copper per an-num within three years of the auction. The planned development has been thwarted in recent times by environ-mental and local pressure groups (with the EIA annulled and then re-issued), though there must also be significant counter-pressure from the government to meet the original production dead-line specified at auction. Bakırtepe, located in Sivas Province, is being developed by Koc Group-owned Demir Export A.S. The project will be mined over five years via open-pit with processing by heap-leach. Construc-tion is underway and it is expected that the project will enter production before the end of 2015.

ADVANCED PROJECTSAdvanced projects include those that have reached pre-feasibility or feasibil-ity stages, though are not yet sufficient-ly progressed to the point of construc-tion. Some of the projects outlined below have been held up by permitting uncertainties or delays, while others are advancing without significant difficulty. Whether a project experiences signifi-cant permitting issues appears largely a function of where it is located in Tur-key. Deposits located in the Çanakkale area typically experience greater delays than some other areas.Kirazlı and Ağı Dağı, both located in Çanakkale Province and owned by Alamos Gold Inc. are high-sulphida-tion epithermal systems. The projects have suffered from permitting issues in recent years. These appear to have been largely solved when the Turkish High Court reinstated its EIA for Kirazlı in June 2015. Kirazlı is expected to be developed as the next mine, with pro-duction due to commence from Ağı

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 oz Au 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 resources stand 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 the gold 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

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 spree of 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 national borders. 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 success in 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 sulphidation epithermal

Resource

Karaayı Pilot Gold (40%)/Teck (60%) High-sulphidation Exploration

Kavaklıtepe Zenith Minerals Ltd option from Teck Resources Ltd

Low-sulphidation epith-ermal

Exploration

Salınbaş Eldorado (51%)/Ariana (49%)

Replacement epithermal & porphyry Cu-Au-Mo (at Ardala)

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.

TurkishCompany

Partner Project(s)

Anadolu Export n/a Karaağaç

ANT Holding (30% shareholder in Aldridge)

Aldridge Minerals Yenipazar

Bahar Madenilik (55%)

Stratex International (45%)

Altıntepe

Çolakoglu Ticari Yatırım (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, Dursunbey

Lidya 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 and Tavşan)

Santral Madencilik n/a Taç/Çorak

Tümad Madencilik n/a Kestanelik

Yıldızlar SSS Holding

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.

expected resource additions are re-alised through further drill-testing.

RECENT DEVELOPMENTS AND CHALLENGESIn 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

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 number of 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 annum before 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

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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 Istanbul Stock 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 gold industry 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 any government 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, it is 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

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 by certain 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 that has 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 Turkey and the willingness of primarily foreign investors to fund ex-ploration and development programs over decades. Therefore, a supportive

and well-structured environment for foreign investment is essential for the health of the industry in the long-term. Furthermore, the ingredients are pres-ent for Turkey to promote a transfor-mational model for international explo-ration and mining development both within and outside the country. Foreign companies must continue to be encour-aged to make new discoveries, secure in the knowledge they may partner their projects at fair value with capital-rich and entrepreneurial Turkish companies that may go on to fund their develop-ment as mines. Turkey has always been at the cross-roads of Europe. Recent developments in the region serve to highlight its strategic significance and emphasise the importance Turkey places on pro-actively shaping its own future and its sphere of influence across the Balkans, Central Asia, Middle East and North Af-rica. The gold mining sector represents a small but highly significant part of this future and establishes the fundamental collateral upon which any new geopo-litical architecture may be erected. The Turkish gold industry must continue to be nurtured and encouraged to excel not just within Turkey but also, via an adventurous, motivated and well-capi-talised home-grown vanguard, poten-tially on a global stage.

Tüprag - Efemçukuru Gold Project

30Fall 2015

New Underground Drill Rigs From Barkom Group

Barkom Group was founded in 1987 at Ankara,Turkey to serve the drilling market as a better alternative to the ex-isting companies. Even from the early stages, the company strived to manu-facture highest quality equipment, and satisfy its customers’ needs within the shortest time possible. To achieve this goal, Barkom Group uses the best raw material available and its quality man-agement system has been assessed and registered as complying with the ISO 9001:2008 requirements, proving the standardization and quality of its products. The company also improved its product range by becoming the au-thorized distributor of Fordia (Diamond Tools), Reflex (Borehole Surveying In-struments), Hanjin D&B (Diamond Core Drill Rigs & Mud Pumps), AMC (Drill Fluid Additives), Jet Lube (Thread Com-pounds), Gonar (DTH & Rock Drilling

Tools), which are world’s leading com-panies in their respective fields.From the beginning, Barkom Group also focused its interest on innovations and R&D to provide better solutions to its customers. The company is the hold-er of various patents and utility models and its trademark has been registered by WIPO (World Intellectual Property Organization) at numerous countries. Barkom Group’s innovative nature and the quality of its products piqued the interest of customers from more than 40 countries in 4 continents.Barkom Group has the largest product range about diamond core drilling in Turkey. The company has relocated to a new factory that has more than 5000 m² production, storage and office area at 2012.Barkom Group has doubled its produc-tion line in a two year period to respond to customers’ needs. The company also built a new laboratory which is capable of tensile strength, surface and micro-

vickers hardness tests and chemi-cal analysis. This enabled the company to ex-pand its product range and start-ed to manufac-ture drill rigs for diamond core drilling.BDU 400x is specifically de-signed for under-ground diamond core drilling. Its modular struc-ture enables it to fit narrow and confined areas of underground galleries. Its pow-erful electric en-gine empowers

Bosch Rexroth Hydraulic Pumps and Motors to ensure reliability and per-formance of the rig. High rotation and torque output of the machine enables faster and deeper drilling capacity. Its flexible design allows the mast to move freely on its foundation to left and right of the rig. Mast complex can rotate 360° on this base as well. A hydraulic cylinder enables vertical, angled and horizontal drilling. Finally the last gimbal allows another 360° rotation to scan all direc-tions in the tunnel without moving the machine. Its control unit is separate from the machine to ensure the safety and comfort of the operator.BDU 600 is designed to improve the performance of BDU 400x as well as adding new features to it. One of the major differences is the diesel engine and track system added to the rig. Diesel engine empowers another drau-lic pump which operates the track sys-tem. With this addition, the mobility of the rig increased greatly. Automati-cally guided and hydraulically powered wireline drum enables fast and regu-lated operation. Rotation unit’s and foot clamp’s jaws are operated hydrau-lically to ensure firm grip and power transformation. A mud pump and a driver seat is installed to the rig to ease transportation and maneuvering of the rig. Control panel can be installed to the rig or used separately to depend-ing on the user’s preferences. The mast can move freely in this model as well. Electrical engine and hydraulic systems are upgraded to drill deeper bore holes.Barkom Group invites you to enjoy the privileges of being one of its customers.

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32Fall 2015

Zenit Madencilik was established in July 2010 as a joint venture (JV) be-tween Galata Madencilik, which is an operating subsidiary of AIM-listed Ariana Resources plc in Turkey, and a Turkish construction company, Proc-cea Construction. The JV encompass-es the Red Rabbit Gold Project, which is an advanced gold project located in the Balıkesir province of western Turkey. The project has completed its

Definitive Feasibility and Environmen-tal Impact Studies and construction of the gold mine is currently underway. The company expects to be in full pro-duction in H2 2016 at a rate of 20,000 oz Gold per annum. The current mine life is 8 years based on current resources. This is expected to increase over time and as a result the tailings storage facility has been constructed with a 15 year life. JORC

reserves at the project currently stand at 1.1M tonnes for 140,000oz Gold proven and probable.Through links with Proccea Construc-tion Co., Zenit Madencilik brings a weatlh of gold mine design, engineer-ing and construction expertise to the Red Rabbit gold project.

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Fall 201533

Local and global expertise in miner-als exploration, mine development & minerals processing. We manage exploration projects and conduct resource estimations under the guidance of internationally ac-cepted standards (JORC, 43-101); con-duct mine planning, scheduling, and pit optimization; scoping, pre-feasibil-ity and feasibility studies; EPCM work and facilitate metallurgical test works DAMA celebrated its 10th year of in-

corporation in June 2015. Proudly speaking, we have performed numer-ous exploration works and resource modeling, underground and surface mine designs, mineral processing plant designs, mine and processing plant auditing, valuation, scoping, pre-feasibility and feasibility studies, and turn-key EPC/EPCM/EPCC activities for the commodities such as gold, Silver, Copper-Lead-Zinc, Chromium, Coal, Fluorite, Iron ore, Manganese, Magne-site for number of major national and international companies. DAMA has networking with interna-tional community of engineering com-panies and experts. Thanks to our es-teemed clients, solution-partners and our dedicated team of engineers and support staff, we are now enjoying internationally recognized reputation

and able to undertake major mining and processing projects. DAMA also has been innovative by establishing the DAPT (DAMA Aerial Prospection Team) department two years ago. High quality data is gen-erated via UAV’s for orthophotos, 3D models and point clouds to use for mapping, exploration design and mine planning. Engineering solutions such as slope stability monitoring, in-field ore and waste measurements are also successfully done with accuracy required.

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34Fall 2015

The Largest of Europe: Tüprag Kışladağ Gold Mine

Whereas the fact that weather was generous like a spring day caused us to enjoy our trip more even though we are at the end of October, it led us to experience a more productive mine tour. Information that we obtained from Ahu Sayın, Public Relations Official and Geo-logical Engineer of Kışladağ Gold Mine, and the things that we have seen in the mine showed us what a huge and professional organization where we are and we have witnessed also how the mining activity at Kışladağ is carried out with a perfect management mentality gathering many different disciplines. Tüprag Metal Madencilik San ve Tic. A.Ş, a subsidiary of Canadian-based mining firm Eldorado Gold Corporation which has carried out R&D activities since 1986 are seen to have carried out more than 600 explorations for the past 29 years under exploration license.

The firm has taken Kışladağ Gold Mine first in 2006 that we learned that it took its name from Kışla Mountain located in the region and is the greatest gold mine now in Europe in terms of annual production and then Efemçukuru Gold Mine in 2011 into operation. Kışladağ mineralization is made up of “porphyry type” gold and sulphite quartz veins and crosscut veins devel-oped based on intrusive units. Silver is available as a side product beside gold, and Tüprag produces silver as a side product as well as gold. It has come to our notice that a trace of cop-per is available in mineralization but copper production is not carried out on this site.

HISTORY OF GOLD PRODUCTION Giant trucks which are extremely re-markable with their extraordinary dimensions and load capacity of 150

In the previous days we got a chance to visit Uşak – Kışladağ Gold Mine that we have planned to visit as Mining Türkiye Magazine Team for a long time and which is one of the greatest firms in our country and operated by TÜPRAG Metal Mining Industry and Trade Corp. While visiting this important mine we observed closely how a qualified min-ing business administration should be carried out. Destination of our trip that we have started from Ankara was Kışladağ Gold Mine located within the administrative borders of Ulubey and Eşme districts in Uşak province and approximately 55 km away from the city center in order to see Kışladağ open pit more closely that we have seen and been unable to hide our admiration to by watching it from thousands meter height during our air travels to Aegean Area as a “curi-ous miner”.

Introductionwww.miningturkeymag.com

Fall 201535

a solution pond and transferred to the carbon adsorption desorption recovery (ADR) plant for gold processing.The solution that floats through the heap enables the dissolution of gold and silver, and the gold-laden solu-tion undergoes a standard enrichment process, which involves carbon adsorp-tion, pressure stripping, electrolysis and smelting/refining. After all these

processes, the final product is obtained as doré gold bars.Because of the silver and copper con-tents, gold obtained as a final product in the operation is not called as “gold bullion” but “doré gold bar”. Kışladağ doré gold is purified in the refinery lo-cated in Istanbul and then sold in Istan-bul Stock Exchange and makes a contri-bution to national economy so.

and 250 tons in Kışladağ, as a conven-tional open pit where drilling, blast-ing, loading and carrying methods are used are of further importance since they take place at the initial point of production process. As mentioning briefly about the trip of ore-bearing rock from open pit to pour-ing doré gold, ore that is obtained from loosened soil as a result of blasting is initially loaded to trucks. Then, the ore is subjected to three-stage crushing operation in order to take the gold in-side by heap leach process. Ore-bearing rock flakes formed to desired sizes in the existing crushing-screening plant which is capable of processing 12.5 tons of ores per year are taken to conveyor bands and then moved to heap leaching area. Neutral solution is pumped to heap leaching area where the ore heap generated, and the floated solution that contains gold and silver creates metal-cyanide complex. The gold-bearing solution is collected via a series of drainage pipes situated on the bottom of the heap leach area and then pumped to

36Fall 2015

HUMAN BEINGS AND ENVIRON-MENT COME FIRST, MINING FOLLOWS…Ahu Sayın tells us that they have a motto that they have applied without making concessions about it since the foundation of Tüprag Metal Madencilik “Human beings and environment come first, mining follows “During our visit we got the chance to see the adaptation of this motto to life with naked eyes. We have learned that approximately 1200 people are employed including contractor com-

panies recently but most impressively 80% of employment is constituted by the people from neighboring villages, districts and throughout Uşak. The fact that trucks which have a load ca-pacity of 150 and 250 tons and is val-ued at 2-3 million dollars are entrust-ed to the citizens living in the village after a 6-month training and that they drives those giant trucks constitute another indicator of the confidence with locals.Operation paying a great attention to labor and worker health targets a continuous development for the mat-ter involved by rendering trainings to its personnel with certain intervals. Information and understanding lev-els of the personnel who are stated to have gained auto control and OHS habits in their social lives outside of mine have reached absolutely an ex-ample level. We see that firm stating at every op-portunity in every platform that real owners of this earth locals in the vi-cinity and citizens from Uşak contin-ues to make its claim to be a great

family with locals through the social responsibility projects carried out for the matter concerned. When we learned that large and small social responsibility projects costing totally about 12 million dollars from the supply of potable water to villages and neighborhoods to asphalting of the roads, from the foundation of hemo-dialysis center to provision and dona-tion of mobile health care vehicle and with respect to training, infrastructure, health etc. are carried out up to now and that it brought an additional edu-cation building to Usak University and a basic education building with 48 class-rooms to its center in Usak, our admira-tion to the firm rises up more.

ENVIRONMENTALLY FRIENDLY MININGTüprag and Kışladag Gold Mine is a producer which may be shown envi-ronmentally as an example with its on-going mining facilities. The firm imple-menting the precautions taken on the protection of environment ultra sensi-tively is further subjected to the audit

GENERAL INFORMATIONABOUT THE PROJECTTotal Quantity of Ore to be Extracted: 535 Million TonsLife of mine: 17 YearsAverage Grade: Approximately 0.66 gr/ton GoldAnnual ore production: 35 Million tonsInvestment amount: Approximately USD 650 MillionEmployment: Approximately 1200

38Fall 2015

twice in a month and results are shared with community. To take necessary precautions by de-termining possible effects on environ-ment, humans and all creatures, air, water and earth at the stage of project and later, to take and implement neces-sary precautions against these effects in accordance with national and inter-national standards and to ensure that everybody live in a healthy and sustain-able environment by making regular controls and measurements related to environment and human health and sharing them with relevant institution, organization and the people in the re-gion constitute the essential principle of the firm’s environmental responsibil-ity understanding. On the other hand, we take information about the green houses which drew out attention and is located next to mining site. Every year average 20,000 forestry seeds are spread and every year at least 10,000 to 15,000 saplings are grown by certified personnel by receiving sup-port from experts when required in ac-cordance with relevant legislations in the green houses where seedlings are grown towards forestation and green-ing of mine area and territory. Ahu Sayın, Public Relations Official of Kışladağ Gold Mine stated that 10,000 forest saplings are donated to Eşme Municipality within this scope in 2015

through Public Relations Department and that pine saplings are distributed free one for each employee in Kışladağ Gold Mine that they may plant wher-ever they want at the event organized within the scope of Environment and Forestry Week in March, 2015. Further-more she stated further that seedlings may be given free to the ones from the neighboring villages and personnel that may plant them in their vicinities.

CONCLUSIONKışladağ Gold Mine is one of the larg-est mines of our country. Furthermore it is the largest gold mine in Europe… It is a distinguished operation in terms

of occupational safety, occupational health, employee rights, environ-mental sensitivity and many miscel-laneous subjects. Kışladağ Gold Mine where 2.3 million ounces (approx. 72 tons) of gold have been poured, has also provided a con-siderable added value to national econ-omy since it is put into operation.According to Environmental Impact Assessment Positive Certificate (“EIA”) received in 2011, annual production ca-pacity is targeted to be increased from 12.5 million tons to 35 million tons (be-tween 2015 and 2028). Economic life of mine is estimated to be 17 years. Later on, the activities are planned to be completed and a transition to rehabili-tation process is planned. Considering current situation since contributions to be made to national economy with planned capacity in-crease display the importance of min-ing sector, it makes us happier. Follow-ing our visit to Kışladağ Gold Mine we left such a great mining organization with a great admiration.

We would like to thank again Ahu Sayın, Kışladağ Gold Mine Public Re-lations Official and Görkem Gürses, TÜPRAG Metal Mining Industry and Trade Corp. PR Specialist and all em-ployees of Tüprag for their friendly approaches.

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Mining Turkey Opens a Windowto the World for Turkish Mining Industry

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42Fall 2015

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44Fall 2015

Gold Metallogeny of Turkey – A Quantitative Assessment

CONTACTS

Özcan Yiğit

SEG Fellow, received his PhD from Colorado School of

Mines, has worked for many major mining/exploration

companies and is currently professor of Economic

Geology at Çanakkale Onsekiz Mart University, Turkey.

E-mail: ozcanyigit@hotmail.com

Fig. 2

224781112

2542

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0 50 100 150 200 250 300

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Manganese-Hosted AuCarlin Type

Iron Oxide Cu-AuCarbonate Replacement

PlacerSkarn

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PorphyryEpithermal

Number of Gold Deposits and Prospects

Inasmuch as Turkey is a major gold producer on the doorstep of Europe, annual gold production reached more than 1 Moz in 2013 and continues to increase. Changes in the mining law in mid 80’s were a significant milestone, allowing foreign direct investment for mining, while a second milestone was the initiation of full production in Tur-key’s first gold mine in 2001, Ovacık. Modern gold exploration by multi-national companies started after the changes in the mining law. Encourag-ing results of gold exploration and mining efforts mainly in last decades have revealed the gold exploration and mining potential of the coun-try. Gold endowment of the country has increased more than 2.5 times in

the last decade. Now there are many active gold mines in the country, e.g., Kışladağ, Çöpler, Efemçukuru, Ovacık, Çukuralan, Mastra, Kaymaz, Himmet-dede, Bolkardağ, Sart and Midi. There are many ongoing feasibility and de-velopment gold projects, e.g., Molla-kara, Öksüt, Yenipazar, Ağı Dağı, Kirazlı, Kızıltepe, and Altıntepe. Turkey is well-equipped to become one of the major gold producers of the future.Gold metallogeny of Turkey forms one of the most prolific sectors in the Tethy-an Metallogenic Belt (TMB). This quanti-tative assessment of the gold metallog-eny of Turkey is based on the author’s proprietary Geographic Information System (GIS) dataset containing 540 gold deposits and prospects at the time of evaluation, which is a subset of the author’s Turkish Mineral Deposit Data-base (TMDD). The gold data set consists of any deposits or prospects containing gold regardless of the nature of the gold occurrences in the system from gold-only to gold-rich base metal sys-tems with by product gold.Gold deposits and prospects in Turkey are mainly clustered in three different

areas; namely northwest Anatolia (in-cluding the Biga Peninsula), northeast Anatolia, and east central Anatolia (Fig. 1). The lack of gold deposits and pros-pects in the other areas of the country may not be due to unfavorable geolog-ic settings, but insufficient exploration activity. The majority of the gold de-posits and prospects are, in the order of decreasing abundance, epithermal, porphyry, volcanic-associated mas-sive sulfides (VMS), orogenic gold, and skarn systems. These five major de-posit types form more than 91% of the known gold deposits and prospects and dominate the gold metallogeny of the country (Fig. 2). Other gold deposit and/or prospect types include placer, carbonate replacement, iron oxide Cu-Au, Carlin type, manganese-hosted Au, distal-disseminated Au-Ag, and de-tachment-fault related Au (Fig. 1).Though there are 540 gold deposits and prospects in the database, out of these only 120, corresponding to 22%, have current calculated gold reserve and/or resources, containing a total of 72.5 Moz Au [2256 tonnes] (Fig. 3). In terms of these deposits and prospects with

Figure 2. Histogram showing frequency distribution of the known deposit and prospect types (n=540).

Articlewww.miningturkeymag.com

Fall 201545

Fig.

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46Fall 2015

calculated gold reserve and/or resourc-es, the most important economically are porphyry, epithermal, VMS includ-ing Kuroko and Cyprus styles as well as metamorphosed, Carlin type and oro-genic gold deposits including meso-thermal and listwanite-hosted systems. These deposit types, in the order of de-creasing reserve and/or resource, con-tain more than 99% of all known gold endowment of the country (Fig. 4A and B). Only two deposit types, porphyry and epithermal contain almost 80% of the gold endowment of Turkey.Out of this total gold endowment, gold reserves of the country are currently 23.5 Moz Au [729 tonnes] constitut-ing 32% of the total gold resources, of which 16.4 Moz Au [510 tonnes] are contained in five deposits, each with more than 1 Moz gold reserves. Out of these 120 deposits and prospects, just 37 contain significant gold reserve and/or resources [defined as equal to or more than 0.32 Moz or 10 tonnes Au], and contain 92% of the total gold en-dowment of the country (Fig. 5A and B).Only 17 of the gold deposits and pros-pects in Turkey contain more than 1 Moz gold as a reserve and/or resource, which are, in the order of decreasing gold content, Kışladağ, Çöpler, Molla-kara, Halilağa, Çukuralan, Efemçukuru, Hot Maden, Konak, Ağı Dağı, Yenipa-zar, Akbastepe, Cevizlidere, Öksüt, Ko-rudanlik, Cerattepe, Taç, and Turplu. These deposits with 1 Moz or more are labeled in Figure 3.Kışladağ porphyry gold deposit with more than 10 Moz Au [311 tonnes] reserves and Çöpler porphyry/epith-ermal gold deposit with more than 4 Moz Au [128 tonnes] reserves are the two largest gold deposits in Turkey at the moment. Only these two oxi-dized intrusion-related gold deposits, Çöpler and Kışladağ, can be classified respectively as world-class [defined as equal to or more than 3.2 Moz or 100 tonnes Au] and giant [defined as equal to or more than 9.6 Moz or 300 tonnes Au] gold deposits in global standards. Unfortunately or fortunately perhaps, there have been no super-giant gold deposits found in the country yet.

Fig.

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Fall 201547

Modern gold exploration with limited expenditures has shown that large ar-eas in Turkey are still underexplored, es-pecially outside of the known districts. While a few new districts have been generated, the exploration maturity of Turkey suggests that the country has potential to generate new prospects or districts through reconnaissance explo-ration in greenfield areas. It should be kept in mind that there are gold ounces remaining to be found in incompletely delineated deposits and/or prospects in brownfield areas as well.

REFERENCE:•For further discussion and details of the gold metallogeny of Turkey see;•Yigit, O., 2006, Gold in Turkey — a missing link in Tethyan metallogeny, Ore Geology Reviews, v.28, p.147-179.•Yigit, O., 2009, Mineral deposits of Tur-key in relation to Tethyan Metallogeny: implications for future mineral explora-tion, Economic Geology, v.104, p.19-51.•Yigit, O., 2012, Discovered and undis-covered gold endowment of Turkey: a quantitative mineral resource assess-ment using GIS and rank statistical analysis, Mineralium Deposita, v.47, p.521-534.

•

Fig. 4

0.007

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Orogenic Au

Carlin Type

VMS

Epithermal

Porphyry

Total Gold in Moz

A

B

1

1

2

4

4

5

8

17

19

59

0 10 20 30 40 50 60 70

Detachment-Fault Related

Iron Oxide Cu-Au

Skarn

Placer

Carlin Type

Carbonate Replacement

Orogenic Au

VMS

Porphyry

Epithermal

Number of Gold Deposits and Prospects

Fig. 4

0.007

0.009

0.116

0.118

0.337

1.240

5.761

7.567

23.017

34.369

0 5 10 15 20 25 30 35 40

Detachment-Fault Related

Skarn

Placer

Iron Oxide Cu-Au

Carbonate Replacement

Orogenic Au

Carlin Type

VMS

Epithermal

Porphyry

Total Gold in Moz

A

B

1

1

2

4

4

5

8

17

19

59

0 10 20 30 40 50 60 70

Detachment-Fault Related

Iron Oxide Cu-Au

Skarn

Placer

Carlin Type

Carbonate Replacement

Orogenic Au

VMS

Porphyry

Epithermal

Number of Gold Deposits and Prospects

Fig. 5

0.74

5.62

6.57

20.89

33.16

0 5 10 15 20 25 30 35 40

Orogenic Au

Carlin Type

VMS

Epithermal

Porphyry

Total Gold in Moz

B

A

1

2

5

9

20

0 5 10 15 20 25

Orogenic Au

Carlin Type

VMS

Porphyry

Epithermal

Number of Gold Deposits

Fig. 5

0.74

5.62

6.57

20.89

33.16

0 5 10 15 20 25 30 35 40

Orogenic Au

Carlin Type

VMS

Epithermal

Porphyry

Total Gold in Moz

B

A

1

2

5

9

20

0 5 10 15 20 25

Orogenic Au

Carlin Type

VMS

Porphyry

Epithermal

Number of Gold Deposits

Fig. 4A. Histogram showing frequency of the gold deposit types with calculated reserve and/or resources,

B. their contained gold endowment (n=120).

Fig. 5A. Histogram showing frequency of the significant [>0.32 Moz or 10 tonnes Au] gold deposit types, B. their contained gold endowment (n=37).

Artvin - Yusufeli, Taç Project

48Fall 2015

Atilla Makina

Since our establishment in 1976, we have gained strength based on the ex-periences in many fields. We brought the respect today that we have for our past with endavour and patience. We’ve added our love we feel for our business to our materials in all the work with faith in the future. We are aware that success is hidden in what we have done so far and we will do; the trust in the quality of what we do, economic return and in timely realization of the planned.With this philosophy, we extend the services we offer to our customers, from the construction to steel construc-tion, from manufacturing technological equipment to the pressure vessel man-ufacturing, from building, roof and wall coating to insulation works, from mate-rial transfer conveyors to tank, hoppers, the cyclone manufacturing and assem-bly, from piping to the instrumentation, from electrical and automation works to commissioning tasks, from plumb-ing to air conditioning and ventilation works, from the preparation of engi-neering projects to documentation and the training of the operating personnel.We have given value to the respect of

human and human labor which is the most important component of sustain-able success. We consider this value as the most important value of our oc-cupational health and safety practices and in the future while continuing to develop our company, we will continue to consider this value as the most im-portant value.Our company has developed referenc-es with many successful facilities com-pleted in the construction of turnkey industrial plants in the mining sector, both in our country and abroad as well as gold, copper, nickel, boron, magne-sium and other mining areas and has added value to the economies where it belongs. In the same area, as well as sta-tionary conveyors, mobile conveyor for sufficient capacity in the ore-laying op-erations (grasshopper, radial stacker), regenerative furnaces, stripping col-umn, carbon filters, heat exchangers, rotary furnaces, smelting furnaces, and similar designs of manufacturing spe-cific equipment, manufacturing, instal-lation and commissioning are the main business activities of our company.Steel manufacturing of all the project

under our company’s undertaking are manufactured with computer-con-trolled, with benches of superior tech-nology and skilled personnel in our factories. We have ISO 9001 Quality Management System, ISO 14001 Envi-ronmental Management System and OHSAS 18001 Occupational Health and Safety, ASME and ASME S, AD 2000, DIN 18800-7, EN 1090-1 and EN 1090-2 certificates. In Turkey, with our two separate production plants in İzmit and with 1 production factory in Samsun, we have reached 32,000 tons of annual production of structural steel manufac-turing capacity. Other than our three factories, this year with a new factory in Baku, Azerbaijan, we increased our production capacity with 12,000 tons of structural steel manufacturing and we launched it in 2014.We have offices Azerbaijan, Morocco and Libya abroad. But most important-ly, no matter where you are, our com-pany is at the nearest location for you with its existing strength and experi-ence in all your domestic and foreign industrial projects.

www.atilla.com.tr

Profilewww.miningturkeymag.com

ENDÜSTRİYEL PROJELERİNİZDE ÇÖZÜM ORTAĞINIZ

▶www.atilla.com.tr | info@atilla.com.tr

Ceyhun Atuf Kansu Cad. No:100 Ata Plaza Kat:4Balgat 06520 ANKARA - TÜRKİYE

Merkez / Headquarters:

T: +90 312 473 22 33 | F: +90 312 473 26 55

YOUR Reliable PARTNER IN INDUSTRIAL PROJECTSENDÜSTRİYEL PROJELERİNİZDE ÇÖZÜM ORTAĞINIZ

▶www.atilla.com.tr | info@atilla.com.tr

Ceyhun Atuf Kansu Cad. No:100 Ata Plaza Kat:4Balgat 06520 ANKARA - TÜRKİYE

Merkez / Headquarters:

T: +90 312 473 22 33 | F: +90 312 473 26 55

YOUR Reliable PARTNER IN INDUSTRIAL PROJECTSENDÜSTRİYEL PROJELERİNİZDE ÇÖZÜM ORTAĞINIZ

▶www.atilla.com.tr | info@atilla.com.tr

Ceyhun Atuf Kansu Cad. No:100 Ata Plaza Kat:4Balgat 06520 ANKARA - TÜRKİYE

Merkez / Headquarters:

T: +90 312 473 22 33 | F: +90 312 473 26 55

YOUR Reliable PARTNER IN INDUSTRIAL PROJECTSENDÜSTRİYEL PROJELERİNİZDE ÇÖZÜM ORTAĞINIZ

▶www.atilla.com.tr | info@atilla.com.tr

Ceyhun Atuf Kansu Cad. No:100 Ata Plaza Kat:4Balgat 06520 ANKARA - TÜRKİYE

Merkez / Headquarters:

T: +90 312 473 22 33 | F: +90 312 473 26 55

YOUR Reliable PARTNER IN INDUSTRIAL PROJECTS

50Fall 2015

Being a Pioneer Gold Refinery in Turkey

Could you give us a brief information about the company’s background and services?Our company was established in 1967. We used to recycle jewellery dross within an area of 150 m2 with 2 person-nel. We began trading precious metals in the Grand Bazaar in 1985 by estab-lishing Nadir Trading. We were trading gold and silver in a small shop in the Grand Bazaar. Increasing demands led us to found the first gold refinery of Tur-key in 1996. 3 years later, a partnership agreement with the German company Degussa Allgemeine was signed in ex-change for technology “know-how” and thereby Nadir Allgemeine Ind.Trade.Co.Ltd was established. Later on, we acquired the rest of the company and completed our investments, and then Nadir Metal Rafineri San. ve Tic. Ltd was established. Today, we have ap-proximately 130 employees just the in refinery and 300 employees in total.In addition to refining, dross, waste re-cycling and laboratory services, we pro-duce and trade precious metals (gold, sil-ver, platinum, palladium, and rhodium). Moreover, we produce “Nadir Metal” and NadirGold branded gram bars, coins in gold, silver and platinum and as well as exclusive collections. Accreditations on İstanbul Exchange (BİST) in 2008, Dubai

Gold & Commodities Exchange (DMCC) in 2009 and The London Bullion Market Association (LBMA) in gold and silver in 2011 accelerated our business devel-opment. Trading with foreign countries increased when jewellery sector was de-veloped and export of Turkish jewellers reached to significant levels. We opened branches in Dubai and then in Italy.Could you tell us your import and export values for 2014, and what are your expectations for 2015?Annual refining capacity of our factory is recently 125 tonnes for gold and 300 tonnes for silver. In the short term, we do not have any plan to change this. Export value of 2014 was approximate-ly USD 150 million. By considering the recent developments in the sector, we expect that this value is more likely to reach about USD 200 million.Which sectors do you work with?Mainly we are working for mining and jewellery sectors. We purify gold/silver dore bars that comes from mining com-panies, and scrap gold and silvers that are obtained by jewelleries all around Turkey through our offices in the Grand Bazaar and also from European countries. We are able to analyse, refine, deliver the physi-cal product to our clients within 24 hours. Occasionally we process industrial wastes that contain precious metals. Could you inform us what other prod-ucts do you have besides gold?We refine and commerce silver in ad-dition to gold. Moreover, we produce rhodium sulphate which is an impor-tant compound for plating sector and used in jewellery.What are your target markets, and do you have any business plan in these countries?We are majorly working for domestic market. European countries consist our secondary market. We obtain gold and silver from these countries, and we

sell our own brand “Nadir” gram bars to them. International trends show that precious metal market tends towards east from west. In this context, we fo-cus on our business in Middle Eastern and Far Eastern countries, because we believe that the importance of these markets will increase more.We know that you are leading in spe-cific fields in Turkey. Could you talk about them?As a matter of fact, being a part of this sector and growing in parallel with it helped us to be pioneer in some fields. We are the first and only refinery which has accreditation of LBMA (London Bul-lion Market Association). Besides, we are the first producers of 99.99% grade silver with electrolytic method in Turkey. We are the only ones who uses PVC packaging system on gram bars that is not opened without breaking it. There-fore, our clients make sure the originality of “Nadir” branded gold and silver bars. Rhodium plating, which consists the final stage of gold and silver jewellery processing, becomes more important nowadays. As being pioneer on this content, we produce Rhodium plat-ing chemicals in our facility and put on market with “Nadir Rhodium” brand.Another subject that we have given importance for two years is complying the Guidance for “Responsible Supply Chains of Gold” which was established by The Organisation for Economic Co-operation and Development (OECD) and accepted by LBMA. We carry out works to raise awareness of jewellery and mining sectors and precious met-als market players in this context. We do support the conferences organized by OECD and BIST and organize train-ings as Nadir Metal Refinery. We believe that this subject will attract all parts of precious metal sector in a short while.

www.nadirmetal.com.tr

Nadir Metal Refinery glitters with its innovations and initiations in gold refining industry of Turkey. Mining Turkey Magazine made an interview with Nadir Tütüncü, the President of Nadir Metal Refinery, to learn what lies behind this success.

Interviewwww.miningturkeymag.com

Nadir Tütüncü

52Fall 2015

Gold Mining in Turkey

Could you tell us about the history of gold mining in Turkey? Ümit Akdur: Turkey started to attract attention of foreign mining companies following an amendment made to the mining law in 1985. Approximately 20 foreign mining companies started gold prospecting in Turkey in the following few years. Local mining companies were not enthusiastic about investing in exploration activities. Exploration companies spent large amounts for several years they also made use of the data that MTA (Mineral Research & Exploration General Directorate) had put together for years. Although there were several significant findings, the first gold mine was constructed in Ber-gama, Ovacık region in 2001. Majority of our present reserves are based on the works of that period.In 1990’s, after licencing authorities were deliberately misled by a cer-tain group spreading around nega-tive false information about use of cyanide. This resulted in some licence revocations in that period. Mining li-cences and environmental permits (EIA) of Bergama - Ovacık, Küçükdere and Kaymaz projects were cancelled

by the courts. Fortunately, both per-mitting authorities and judiciary real-ized the fact that gold mining is an or-dinary industrial and mining activity in the course of time. Initial gold production was 1.4 tonnes in 2001, this amount increased to 33.5 tonnes at the end of 2013. We were expecting approximately 50 tonnes of gold production in 2015, how-ever gold production dropped to 31 tonnes in 2014. The 2015 production is foreseen to remain below the target level. What would you say about the prog-ress of gold mining in Turkey?All of the gold mines in Turkey are be-ing operated according to the highest world standards. That is not our saying, a few years ago, delegates of European Mining Association (EUROMINES), vis-iting Turkey, commented that these mines are among the best mines that they have seen so far, in terms of tech-nical and environmental standards.Gold mining companies are aware of the fact that any single negligence in techni-cal, environmental and health and safe-ty matters will create a massive negative image that is very difficult to reverse.

Do you think we were able to use our entire gold producing potential?Turkey is a large scale gold importing country. According to the data ob-tained from İstanbul Gold Exchange which was established in 1995, Turkey has imported 3200 tonnes of gold be-tween 1995 and 2015, in other words 150 tonnes of gold per year, and paid approximately US$7 billion annually. We are aiming at full import substitu-tion by producing more gold in Turkey. Gold is the fourth largest imported commodity of Turkey following petro-leum, natural gas and iron-ore/steel. Our gold production is not sufficient to meet our gold demand now. However, we consider that we can even export gold as well as supplying for our local demand. Unfortunately, our problem is not being able fully explore the re-source that we believe that we have.One of the main reasons for not being able to use our potential seems to be lack of exploration. Total of the drill-ing that has been carried out in Turkey in the last 75 years, is identical to the drilling made in only one (1) year in Canada. In other words, less than $200 million is spent annually for exploration work in Turkey, whereas $ 3 – 4 billion is spent annually in Canada for explora-tion purposes.In this case, what do you think should be done?The weakest aspect of mining sector in Turkey is exploration. Therefore, explo-ration needs to be promoted by special incentive measures, in order to reach satisfactory levels. Obtaining timely permits from the au-thorities for mining activities is crucial for the mining industry. We believe that this problem can easily be solved by a good coordination with the permitting authorities which will result to the bene-

We found a chance to make an interview with M. Ümit Akdur, President of Mining Sector Presidents’ Council and Dr. Muhterem Köse, Coordinator of Turkish Gold Miners Association. In this interview, we tried to find the answers of all questions about gold mining industry in Turkey.

Interviewwww.miningturkeymag.com

Ümit Akdur

Fall 201553

fit of both the government and the min-ers. If we ever succeed, we can expect a boom in the Turkish mining industry. What are your efforts towards solving these problems?The “Council” has an important position in Turkey. In fact, we were able to get in one on one dialogue with some of the relevant ministries especially with the Ministry of Energy and Natural Resourc-es during the course of drafting a new legislation. We are promoting our rela-tions with Ministry of Forestry and Water Affairs and Ministry of Environment and Urbanization. Therefore, when we make a proposal or a comment, the authori-ties tend to take it into consideration, knowing that the consequences of this request will be to the benefit of both pri-vate sector and the government. This is so important for the proper representa-tion of mining sector. Just to give an example, the new min-ing law has enabled a much secure tenure, which has been a big issue for mining companies for a long time.. Could you tell us the advantages about gold mining industry in Turkey?The greatest advantage for foreign inves-tors is that Turkey has a large underex-ploited potential and many world class exploration geologists, mining engi-neers and other staff. Quite a number of them gained their experience in the gold mining companies. Turkish drilling com-panies are serving all around the globe now. Some of the international assaying laboratories are operating in Turkey.Moreover, it is possible to find energy, paved road and a residential area at a distance of maximum 20 – 30 km away from the exploration or mining areas. Additionally, the weather condition in a large portion of Turkey provides for workable mine sites even in winter. What do you suggest to the compa-nies and individuals who would like to invest in gold mining in Turkey?If the companies, planning to invest in Turkey, has an international experi-ence, they would probably know that they should not just concentrate on technical aspects of their investment , but they must consider PR/GR require-ments and get in touch with many

people as they can, such as district gov-ernor, mayor, village headman and lo-cal residents well before commencing exploration activities and explain their projects and assure them for a world class mining activity in terms of techni-cal, environmental and health & safety terms. If PR/GR relations are not well planned or started in the right time, it may not serve the purpose at all, and no matter how strong finance or tech-nical infrastructure the company has, does not make any change at all. We have learned by experienced that human relations is the most important step to begin mining. Some companies did not understand the importance of human relations during the first years of their activities in Turkey. The results were destructive. Although current situation is better than the past years, we must be cautious about it. Poten-tial investor companies should know sensitivities of the Turkish people very well. If these companies would like to do human relations, these works should be carried on in assistance with experi-enced local staff. Another option is mak-ing a joint venture with a local company which has the right standards.

Which projects do you expect to com-mence production in the short term?Muhterem Köse: We have some ad-vanced gold projects. One of them is the Altıntepe gold Project that belongs to a joint venture between Stratex and Bahar Madencilik. According to the an-nouncements, this project is expected to begin production in this year. Fur-thermore, Öksüt project of Centerra

Gold is planned to start development works in early 2016, and the produc-tion is more likely to start in 2017. Ari-ana Resources started the construction of Kızıltepe project, the production is expected to begin in 2017. Finally, an-other gold project which is owned by Tümad Madencilik is also an advanced project in Turkey. .

MINING SECTOR PRESIDENTS’ COUNCILThe council is established to trouble-shoot and create solutions for mining industry in order to facilitate mining in Turkey and recover maximum amount of underground resources in Turkey. Council aims to be part of the study group together with the government during the preparatory work of the mining related legislation. Helping to resolve the individual problems of member associations and companies, representing Turkish mining commu-nity at the international organizations and collaborating with them to devel-op mining industry in Turkey. The vision of the council is prospect-ing, mining and rehabilitating the mined areas in Turkey within the in-ternational health and safety, envi-ronmental and technical standards.

TURKISH GOLD MINERSAS-SOCIATION“Our mission is to assist in the sustain-able development of mining opera-tions within Turkey whilst maintaining a socially responsible approach to the environment and the communities in which we operate”.Vision of the association is to enable the discovery and development of world class gold resources in Turkey, in cooperation with the legislators, the media, academia and the finance community. TGMA aims to help inter-national and local mining operators, developers and explorers establish healthy operations within our country. The association works in accordance with the State’s laws and permissions and according to national and interna-tional environmental standards.

Muhterem Köse

54Fall 2015

Adjara Hydro Races AheadThe Autonomous Republic of Adjara, in the south-west corner of Georgia, is vir-tually unknown outside of the region. Next year, however, a new energy proj-ect will place it firmly ‘on the map’.Bordered by The Black Sea to the east-and Turkey to the south, this small but independent enclave will host the open-ing of the new Shuakhevi hydro power plant – the largest private investment ever in renewable energy in Georgia.The project, which will cost an esti-mated USD 400 million, has been tak-ing shape in the Adjarian highlands since 2013 and has been made possible through an international cooperation.Funding has been provided by global-investors and the company in charge is a joint venture with India’s Tata Power and Norway’s Clean Energy Invest as majority partners.The 185 MW Shuakhevi powerhouse will produce 450 gigawatt hours of electricity annually. Georgia says it will reduce greenhouse gas emissions by more than 200 000 tonnes per year and pave the way for regional trade and development.Shuakhevi is a BOT (Build-Operate- Transfer) project and a run-of-the river scheme, involving the construction of two dams and three diversion tunnels with a total length of about 40 km.

Reason for optimismTurkish contractor, Age İnşaat ve Ticaret A.Ş. (Age Construction and Trade Inc.) admits that it is a race against time to meet the completion date, but the feel-ing on the ground is optimistic.One of the reasons for this, explains Sezai Azizoğlu, the company’s Techni-cal Coordinator, is the choice of load-ing equipment that is enabling the muck from the tunnels to be removed easily and quickly. This is thanks to the company’s Atlas Copco Häggloader units that are designed to remove waste rock with their built-in conveyor belts and deposit it directly into dumps trucks at the rear.

This method of continuous loading wasintroduced here about one year ago and is said to have considerably speed-ed up the whole tunneling process.“I first saw the Häggloader in an ad-vertisement and I immediately felt that it would solve our problems,” says Azizoğlu. “It’s a nice machine, simple and effective and faster than the conven-tional loaders that we were using before.“According to the specifications, the capacity of the Häggloader is 3.5 cubic meters per minute, but here the opera-tors often reach four cubic meters per minute, which is very good.”Ömer Kuleyinoğlu, Tunneling Works Manager, adds: “We were investigating how to work faster, more effectively and more economically and we decid-ed that the Häggloader could meet all of our needs.”

No need for nichesThe electrical system means there is no carbon monoxide emission and even when the diesel power system is used, the emissions are substantially less than a conventional loader. In addition, a lot of money is being saved as it is not necessary to create turning niches in the tunnel.“We have fewer people in the tunnel, the capacities of the loading operation has increased and the whole operation is faster,” says Kuleyinoğlu. “So in terms of logistics, these machines have many advantages.”Today, both the Häggloader 7HR-B and the bigger Häggloader 10HR-B are in operation. Project Manager Nazım Kurdoğlu says he was aware of the Häg-gloader’s reputation for efficiency and felt convinced that they would speed up the operation. But he adds that the best results will be achieved if the whole system is designed according to the Häggloader’s operating principles. Ömer Tiryaki, Equipment Superinten-dent at one of the four construction sites, confirmed that the Häggloader loads twice as fast as the previous

loading method, especially in locations where the faces are further from the loading bays.Most of the faces are advanced at the rate of 1.50 –2 km per month and more than one third of the tunnels have now been completed.Engineer Mete Han Erçelik explains that the company made the switch to Häg-gloader when the distance from some faces to the dumping bays had reached about 4.5 km. “At that point, we knew we had to make some improvements,” he said.Almost 40 blastholes are drilled in the tunnel faces using the V-cut technique but the amount of water coming into the tunnel has been higher than ex-pected. This excess water has been problematic due to the presence of electricity cables inside the tunnel as well as electric discharge pumps.In spite of this, Erçelik points out that the water conditions have not affected the performance of the Häggloader. Anoth-er advantage is a water spraying system which helps to reduce the amount of dust in the air, and less dust also means that it is easier to reposition the drill rig for each new round which saves time.The Häggloader can be equipped with dual digging arms or a digging bucket. According to Daniel Sandström, Prod-uct Manager at Atlas Copco, continu-ous loading in tunneling projects of this type involving long tunnels is “the best method by far” compared to con-ventional loaders.He continues: “Apart from being more energy efficient, Häggloader minimiz-es the waiting time for dump trucks. Besides, there are huge savings to be made through not having to create turning niches, not to mention lower costs for ventilation systems, diesel fuel and wear and tear on tires.”

www.atlascopco.com

Profilewww.miningturkeymag.com

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CM

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56Fall 2015

Koza, Turkey’s “Gold” Company

Prioritizing social development, Koza continues to add value to our economy by bringing out our wealth laid beneath the soil and carrying out activities with full compliance to the environment.

Koza Gold aims to carry out transparent and durable gold mining by employing the best available high environmen-tal standards and establishing mutual trust with the local people, and respect-ing their values and in doing so, to in-tegrate economical and social develop-ment with protection of environment from the very first day it has started to operate. Koza has significantly added value to Turkish economy. Koza is a ma-jor and important gold producer in Tur-key with Ovacık, Mastra, Kaymaz, Çuku-ralan and Himmetdede Operations and Söğüt Project and other projects that will be developed in future. Having proven itself worldwide in last ten years by developing its production, resourc-es and reserves, Koza Gold Operations

has been rapidly increasing its capital, number of workforce and operations since it has started its activities.

Koza has added yet another success in its sector in 2014 with stability works over the years and reserves and total resourc-es generated by know-how.

Total resources and reserves for Koza Gold Operations Company, which was audited by SRK Consulting USA, an international institution, and by tak-ing into consideration of international JORC standards were announced on 31.12.2014.

The results of analyses showed that our measured, indicated, inferred resources have reached to 13.4 million ounces and reserves to 4.2 million ounces as of 31.12.2014.

At the end of 2013, Koza Gold’s re-sources were 13.3 million ounces

and reserves were 3.5 million ounces. When taking into the consideration of 317.000 ounces of production in 2014, annual increase rate of our reserves is taken as 28%.

Due to permitting regulations, issued by the Prime Ministry’s Office on the use of public land, which came into force in June 2012, not enough drill-ing opportunities existed to transform resource and reserve zones into mea-sured and indicated categories. Fur-thermore, resources and reserve grade values went up head to head affected by changes in gold prices in 2014. In spite of this negative environment, our geology and exploration teams contin-ued their efforts to increase resources and reserves figures and once again achieved successful results.

Koza’s Seal AbroadKoza Gold Operations’ successful proj-ects are being crowned by the activities

Kaymaz Gold Mine

Profilewww.miningturkeymag.com

Fall 201557

abroad. Koza Ltd, an abroad subsidiary of Koza Gold Operations, which com-menced its activities in 2014 stepped into gold mining sector in Ireland, Scot-land and England with joint venture projects formed with the companies abroad as well as the exploration licens-es obtained through its own efforts. Koza Ltd aims to achieve worldwide success as being the first Turkish com-pany which is awarded licenses abroad. Through signing an Option Agreement, London-based Koza Ltd, an affiliate of our Company was granted a right by the Public Authority (Crown Estate) to ex-plore gold and silver on a license area of 250 km2 in the United Kingdom (North-ern Ireland). Exploration right is valid for a period of six years and if the explora-tion activities prove to be successful and ore found to be operable; Koza Ltd will hold the right to operate mine.

Koza Gold Operations: A Leader in Quality and Success Implementing International Qual-ity, Environment, Occupational Health and Safety standards at Ovacık Gold Mine, and undertaking the principles of “Continuous Improvement”, Koza Gold Operations Inc., was awarded with ISO 9001:Quality, ISO 14001:Environment, and OHSAS 18001:Occupational Health and Safety Certificates. Furthermore, it has been pursuing activities in its other operations and projects to comply with high quality understanding and Integrat-ed Management System requirements.Awarded with the Certificate of Success by the Chamber of Industry of Aegean Region (EBSO) and having secured a

place in top three each year for realiz-ing highest investment, highest export and highest employment in the Indus-trial Trade Groups of Mining Extraction categories, Koza Gold Operations Inc. is now placed 12th on the list of “100 Major Companies” by EBSO for the year of 2014. Koza Gold was also awarded “Environment Incentive Award” by EBSO in 2008. Koza Gold has reached to the finals amongst 29 companies in 2011 Peryon Human Resources Awards, which is the most reputable Human Management awards in Turkey.

For the year ended 2014, Koza paid 113 million 576 thousand TL and ranked 25th place on the list of corporate com-panies paying the most in taxes in Tur-key. Koza is 6th on the list of Turkey’s

industrial establishments that pay most taxes. In the category of private enter-prises, it is 4th most taxpayer industrial institution. Jumping up 55 steps on the list, Koza has paid over 132 million TL including state right for the gold pro-duced and as for the use of equity capi-tal, it ranks 14 in first 100.

Besides, implementing technologies and paying taxes, Koza is regarded to hold an important place in world’s gold mining and in 2014, Istanbul Chamber of Commerce declared that Koza was 99th on list of Turkey’s 500 major Indus-trial establishments and in the category of private sector, it ranked 93rd.

www.kozaaltin.com.tr

Himmetdede Gold Mine

58Fall 2015

Ariana Resources

Ariana Resources is a leading explora-tion, development and production com-pany operating in Turkey.  The Company is focused on the discovery of sizeable mineral systems, primarily in the West-ern Anatolian Volcanic and Extensional (WAVE) Province in western Turkey. This province hosts the largest operating gold mines in Turkey and remains highly prospective for new porphyry and epi-thermal deposit discoveries.Within this province Ariana has one ad-vanced development project (Red Rab-bit Project) and a further two advanced exploration projects (Ivrindi and Demir-ci). The region surrounding the projects is named the WAVE Project Area. The Red Rabbit Gold Project is a joint ven-ture between Proccea and Galata Ma-dencilik (Ariana’s operating subsidiary

in Turkey), through Zenit Madencilik an incorporated joint stock company.  Mine construction is currently under-way and production is expected in H2 2016. The Company expects a produc-tion rate of 21,000 oz Au equiv. per year during first 5 years of operation. The life of mine is currently at 8 years based on current resource base, but this can be increased through further resource expansion. Cash costs for the project are $600 per ounce with a JORC reserve of 1.19Mt for 145,000 oz Au equivalent (JORC Proven and Probable). The in pit grade is 3.1 g/t gold and 39.8 g/t silver. A US$33m credit agreement with Tur-kiye Finans Katilim Bankasi A.S provides project capital through to production. The current project economics are based only on the Kızıltepe Sector of

the project. The Tavsan Sector repre-sents immediate resource upside (ca-pacity for additional 30,000 oz p.a. pro-duction). With only 6% of the total vein system (and total resource) defined through drill testing, there is signifi-cant potential to expand the resource through further exploration and devel-opment. Ariana envisages an aggre-gate resource of 1Moz of gold is achiev-able within the Red Rabbit Project Area and our strategy is designed to build on our existing resource base via explora-tion and future acquisitions.In parallel to our resource development and exploration strategy in western Turkey, Ariana has joint ventured its exploration portfolio in northeastern Turkey to Eldorado Gold. Reconnais-sance exploration in eastern Turkey for large porphyry copper-gold and related deposits resulted in the discovery and subsequent acquisition of the Artvin Project in 2007. Over the life of the JV approximately US$8m has been spent by Eldorado Gold Corporation on ex-ploration of the project area. Eldorado Gold maintains management control of the project.In 2013 following extensive resource drilling, Ariana announced a maiden resource of 1.09 million oz gold equiv-alent (JORC Inferred and Indicated) at the Ardala-Salınbaş prospect. A scop-ing study completed in Q2 2015 indi-cates that a mine can be established with a life of 10 years. It is expected the mine can achieve a production rate of 50,000 oz Gold per annum with an average in pit grade of 2.0g/t Gold and 10.2 g/t Silver. In addition to these projects Ariana Resources has a strategic investment in Royal Road Minerals   (Jersey-based TSX-listed).

www.arianaresources.com

Profilewww.miningturkeymag.com

T: +44 (0)207 407 3616info@arianaresources.com

Ariana Resources PLCBridge House,

London Bridge, London, SE1 9QR

First Gold Production H2 2016

Kiziltepe Gold Mine Construction Underway

Significant Resource Growth PPotential Across Projects

Low Exploration & Mining Costs

Significant Regional Gold Potential

www.arianaresources.com

60Fall 2015

The Circular numbered 2012/15 pub-lished in the Official Gazette on 16 April 2012 (“Circular”) stipulates “with respect to immovable properties owned by or subject to disposal by public insti-tutions and organizations (excluding Municipalities and special provincial ad-ministrations) or companies where fifty percent of its shares are held by public institutions and organizations, any acts of disposal such as sale, rent, easement, barter, assignment, transfer etc. of such immovable properties either to public institutions and organizations, founda-tions, associations or companies of such entities or any natural or legal persons shall be subject to prior approval shall from the Prime Ministry.”Pursuant to the Circular with regards to state owned immovable property the Prime Ministry’s approval must be ob-tained prior to any kind of transaction which is to the benefit of third parties. Despite the Circular being very brief its scope and application is extensive. Its scope is so extensive that transactions that are subject to approval do not only apply to those that benefit natural persons butalso apply to disposals that are beneficial to public organizations. Virtually, all state owned immovable property before the “bird even leaves the nest” shall be subject to prior approval from the Prime Ministry. In practice as public officials are not prepared to bear any responsibility they have applied the Circular strictly and to the letter, so that it has surpassed its real objective and no flexibility has been allowed in its application.To say that the mining industry is the sector most severely affected by the

Circular would not be wrong. Admin-istrations dealing with licence and for-rest clearance applications request the Prime Ministry’s opinion and despite a response not being received for months, most of the responses espe-cially regarding licence applications are concluded with a negative opinion without any reasoning or grounds. Al-though most of the time the relevant administration rejects the applications on the basis of the Prime Ministry’s opinion, the opinion of the Prime Min-istry is concealed from the applicant. These long and uncertain processes causing ambiguity have discouraged in-vestment in the mining sector which is a sector that attracts large investments. In this respect, when one considers the sector’s contribution to the country’s economy, the real scope of damage and potential damage can be appreciated. During the first years of the Circular’s implementation the mining sector tried to negotiate the annulment of the Cir-cular but in spite of all efforts as a result of the negative outcome many cases regarding application of the Circular are being resolved through judicial means and referred to court.Application of the Circular, in other words licence and forest clearance ap-plications that are rejected on the basis of the Circular are clearly unlawful. In accordance with the fundamental legal principle of the hierarchy of norms; it not possible for a circular which is the low-est legal norm to take precedence over a vested right that has been granted by law which is the highest legal norm. Therefore, rejection of applications that have satisfied all criteria stipulated un-der law is undoubtedly unlawful. The crucial point here is that the application must be in compliance with the law.In the event the aforementioned events are experienced the following judicial action should be taken; upon

rejection of the application made to the administration or being consid-ered to have been rejected due to the administration’s failure to finalise an application in time. Legal action in the administrative courts must be initiated within sixty days of service of notice of the administration’s decision to reject the application or its failure to finalise an application in time amounting to a rejection. If the application is not made in time the right to initiate such action shall be lost. Two of the administration’s acts can be subject to judicial action and put forward in the same lawsuit petition. The first act is the Prime Min-istry’s negative opinion, the second is the administration’s rejection based on the Prime Ministry’s opinion. Initiating the legal action as an application for a Stay of Execution is most beneficial and the main crux of the case should be that it is not possible for the Circular which is the lowest legal norm to take precedence over a vested right that has been granted by law which is the high-est legal norm.A precedent decision for Stay of Execu-tion rendered as a result of the above mentioned legal process demonstrates the Circular is unlawful;APPLICANT FOR A STAY OF EXECUTION (CLAIMANT): ……………..ATTORNEY: ATT. ERHAN EGEMEN - Nida Kule Göztepe K: 23 Kadıköy / İSTANBULOPPOSING PARTY (DEFENDANT) : 1- ENERJİ VE TABİİ KAYNAKLAR BAKANLIĞI ATTORNEY : ATT. NURNİGAR SİPAHİOĞLU - Centre/ANKARA2- PRIME MINISTRY ATTORNEY: ATT. GÜLTEN BOSTANSUMMARY OF CLAIM: With regards to the rejection of the application……numbered made by the Claimant com-pany, for a II (b) Group mining explora-tion licence for ER: .... , .... , .... numbered mining sites located within the bound-aries of ..... Province, ..... District and the

Effect of the Prime Ministry’s Circular 2012/15 on Mining Law with Respect toPrecedent Decision for Stay of Execution

CONTACTS KGEC Law Firm

E-mail: info@kgechukuk.com

Website: www.kgeclaw.com

Articlewww.miningturkeymag.com

Fall 201561

Prime Ministry’s finding ...... dated and ...... numbered which was the basis of the rejection, an application for an-nulment and a stay of execution has been requested as all legal conditions were satisfied and all documents were complete, therefore it was unlawful to use the Circular of the Prime Ministry as grounds and the aforementioned Circular is unlawful as it restricts provi-sions vested in law.SUMMARY OF DEFENSE: Pursuant to the Prime Ministry Circular No. 2012/15 and dated 15/06/2012 the Prime Min-istry’s approval must be obtained for applications, the information and documentation related to the Claim-ant’s application was sent to the Prime Ministry and the response ...... dated and ...... numbered was negative as in its opinion, which is the subject of these proceedings, that the Claimants application for a Mining Licence was not considered suitable, therefore the rejection is legal and the Claimant’s ap-plication for annulment and stay of ex-ecution should be dismissed.IN THE NAME OF THE TURKISH NATION Before ……. Administrative Court:The claim has been initiated by the Claimant company as an application for annulment and stay of execution with regards to the rejection of the Claimant company’s application for a II (b) explo-ration licence for ER: …. , …. , …. num-bered mining sites located within the boundaries of .... Province, ...... District and the Prime Ministry’s finding dated ...... and numbered ...... which was the basis of the rejection.Article 27 sub-section 2 of the Adminis-trative Hearing Procedural Law No 2577 states; if implementation of the admin-istrative process will result in difficult to remedy or irreparable damages and the administrative process is explicitly unlawful, after hearing the defendant’s defence or after the time to submit a defence has expired, the Constitution-al Court or Administrative Court may decide to grant a stay of execution by stating its grounds and in its decision to grant a stay of execution it is obliged to detail the reasons why the process is explicitly unlawful and in the event that

the process is implemented the difficult to remedy or irreparable damages the Claimant will suffer.Pursuant to the aforementioned Article to grant a stay of execution; implemen-tation of the administrative process must result in difficult to remedy or ir-reparable damages and the administra-tive process must be explicitly unlawful and both these conditions should oc-cur at the same time. Additionally, in the event of deciding to grant a stay of execution, in its grounds the court is obliged to detail the reasons why the process is explicitly unlawful and the difficult to remedy or irreparable dam-ages that will be suffered.In this respect; firstly why the process is explicitly unlawful and if implemented what the difficult to remedy or irrepa-rable damages will be should be de-termined, after which, whether these conditions exist at the same time must be determined.With respect to the contention that dated ...... and numbered ...... process, which is the subject matter of these proceedings, is explicitly unlawful;As per Article 16 sub-section 1 of the Mining Law No. 3213 titled “initial applıcatıon and lıcensıng”; II (b) Group mines shall be explored under an ex-ploration license, and as per sub-sec-tion 5; the application for an explora-tion license for II (b) Group mines not exceeding 100 hectares shall be made

to the General Directorate, as per sub-section 7; applications shall be made directly or online to the General Direc-torate for sites that are limited by deter-mined points based on the coordinates of 1/25.000 scaled topographical map, the applicant shall be informed of the available portion of the requested site on the date of application and the li-cence shall be granted within 2 months provided that a mining exploration project is submitted which includes the preliminary assessment report and fi-nancial sufficiency required for carrying out exploration and provided the fee and security deposit have been paid. In the event that fee and security de-posit is not paid and these documents are not complete, the sites will become available to other applicants.As per Article 5 sub-section 1 of the Regulation on Mining Activities Per-mission titled “Fundamental principles regarding permission”; procedures and principles to be applied for permis-sion required for mining exploration and production will be governed by this Regulation, as per sub-section 2; ministries and public institutions and organizations shall execute their duties and authority to issue approvals and grant extensions for mining activities and shall conclude licence applications according to the provisions of the laws and this Regulation and unless regulat-ed by laws, international treaties or this

62Fall 2015

Regulation, shall not carry out duties based on matters that are within other administrations jurisdiction, author-ity or responsibility, as per sub-section 3; except as set forth under provisions this Regulation and relevant provisions of other laws, ministries and public in-stitutions and organizations shall not obstruct mining operations and shall not place restrictions that exceed those in this Regulation in regulations it shall issue, sub-section 1 of Article 7 titled “Exploration Activities” regulates that except for permission required under the Law and Regulation mining explo-ration activities are not subject to per-mission required under the scope of other legislation; and Article 16, details the documentation required during the application to be made to the General Directorate for exploration activities.As per sub-section 3 of Article 8 of Regulation on the Practice of Mining Activities titled “General Application” an application shall be made to the General Directorate for a II (b) Group mining exploration license, as per Ar-ticle 9 titled “Assessment of applica-tions for an exploration license/certifi-cate”; an application for an exploration license/certificate maybe carried out by payment of licence request fee (in An-nex Form-2) providing an undertaking

(sample provided in Annex Form-2) and submitting a petition in 3 copies direct-ly to the General Directorate or online using the application form available on the General Directorate’s website, as per sub-section 2; the site applied for, shall be assessed in consideration of ex-isting rights attached to it, the result of the application shall be announced on the General Directorate’s notice board and website within 2 months of the day after the application is submitted and the applicant shall not separately be notified in writing.The Prime Ministry’s Circular numbered 2012/15 published in the Official Ga-zette on 16/06/2012 sets forth “with re-spect to immovable properties owned by or subject to disposal by public in-stitutions and organizations (excluding Municipalities and special provincial administrations) or companies where fifty percent of its shares are held by public institutions and organizations, any acts of disposal such as sale, rent, easement, barter, assignment, transfer etc. of such immovable properties ei-ther to public institutions and organiza-tions, foundations, associations or com-panies of such entities or any natural or legal persons shall be subject to prior approval shall from the Prime Ministry.”Upon reviewing the file; the Company’s

authorized representative applied for a II (b) Group mining (Marble) explora-tion licence for ER: …. , …. , …. num-bered mining sites located within the boundaries of .... Province, .... District, following this it was requested that in the event there was no documentation or information missing the Defendant Administration issue the licence, in its response dated ...... and numbered ...... it was notified that although there was no record of documentation or infor-mation missing the application had been rejected as in the Prime Ministry’s opinion within the scope of the Circular numbered 2012/15 the application was unsuitable and as a result these pro-ceedings were initiated.With reference to the above mentioned statutory provisions, it is understood that II (b) Group mines can only be explored under an exploration licence and that for a licence an application must be made to the General Director-ate of Mining Affairs, the administra-tion to which the application is made, in consideration of existing rights at-tached to the site applied for shall an-nounce the result of the application on the General Directorate’s notice board and website. Additionally, pursuant to Article 7 of the Regulation on Permis-sion for Mining Activities, except for permission required under the Law and Regulation permission to conduct mining exploration activities cannot be subject to permission required under the scope of any other legislation.This dispute is as a result of the Defen-dant administration requesting permis-sion from the Prime Ministry to grant the Claimant company’s application for a II (b) group mining exploration licence and the application being deemed un-suitable within the scope of the Prime Ministry’s Circular numbered 2012/15.To resolve this dispute, whether an application for a mining exploration li-cence should be considered within the scope of the Prime Ministry’s Circular needs to be determined.Pursuant to Article 124 of the Constitu-tion the Prime Ministry, the ministries, and public corporate bodies may issue regulations in order to ensure imple-

Balıkesir - Balya Lead and Zinc Mine

Fall 201563

mentation of laws and by-laws relating to their jurisdiction, provided they are not contrary to these laws and by-laws.As stated in doctrine (GÖZLER, Ke-mal. İdare Hukuku, C.I, Ekin Kitabevi Yayınları, pgs.1124-1145, Bursa 2003; GÖZÜBÜYÜK, A. Şeref, TAN, Turgut, İdare Hukuku C.I, Turhan Kitabevi, pgs.124-146, Ankara 2010; SEVGİLİ GENCAY, Fat-ma Didem. Adsız Düzenleyici İşlemlerin Normlar Hiyerarşisindeki Yeri, AÜHFD, S.63, pgs.397-417.), aside from issuing regulations and by-laws related to their jurisdiction public administrations may also issue statutory instruments such as communiqués and circulars. However, there is no hierarchy of norms relation-ship between these instruments. The most prominent aspect of this hierarchy is that a statutory instrument cannot be amended or annulled by an instrument that is at a lower level.The meaning of the hierarchy of norms is that all norms are listed in a hierar-chy and connected to one another. A natural result of this is that a lower level norm cannot contain provisions that breach a higher level norm. In other words, regulatory acts of a lower norm, unless allowed by the higher norm can-not restrict use of rights provided by a higher norm. Therefore, it is not possi-ble for the written response based on a statutory instrument issued as a “direc-tive” which compared to a regulation has the characteristic of a lower level norm to amend or annul provisions regulated under law or by regulation.In some situations, it is possible that mat-ters are governed in general by a regu-lation which has the characteristic of a higher level norm and the details of such matters are regulated by a lower norm. In such situations, whether the administra-tion authorized to issue instruments for matters regulated in general under the higher norm has used its discretion be-yond the limits determined by the high-er norm is subject to legal review. Hence, pursuant to Article 7 sub-section 4 of the Administrative Hearing Procedural Law No 2577 the fact that a statutory instru-ment has not been annulled does not af-fect the annulment of the act based on such regulatory instrument.

When legal review is conducted, inde-pendent to the literal meaning of text of the higher norm the purpose of the text should be interpreted and wheth-er a right has been restricted or not should be determined.In the matter at hand, with reference to the provisions of the above mentioned Law and Regulation, upon application for an mining exploration licence, the defendant administration once it has de-termined that all documents have been submitted should draw its conclusion in consideration of existing rights attached to the site applied for; there is no addi-tional requirement for the permission of the Prime Ministry to be sought.Therefore, with reference to the provi-sions of the above mentioned Law and Regulation, despite the fact that it reg-ulates that upon application for an min-ing exploration licence, in the event all documents have been submitted, the General Directorate of Mining Affairs should draw its conclusion in consider-ation of existing rights attached to the site applied for, it has been noted that in breach of the hierarchy of norms, the Prime Ministry’s Circular numbered 2012/15 regulates that the Prime Minis-try’s permission must be obtained.In this situation; an application has been made for an exploration licence with the documents detailed in the regulation, although the General Direc-torate of Mining Affairs should draw its conclusion in light of the provisions of the Mining Law numbered 3213 and the above mentioned Regulation, the rejection of the Claimant’s application which is the subject of these proceed-ings is found to be unlawful as it was based on the grounds that the Prime Ministry Economic Social and Cultural Affairs within the scope of the Prime Ministry’s Circular numbered 2012/15 found the application to be unsuitable.With regards to implementation of the administrative act, which is the subject matter of these proceedings, resulting in difficult to remedy or irreparable damages;In the event that judicial protection is applied for against the administrative act through administrative courts, the

judgement regarding the merits of the case should be enforceable and prevent individuals from suffering damages, thereby where the request to annul the administrative act with a view to pre-vent its implementation, by means of a stay of execution even though the legal standing of the administrative act re-mains, its implementation is suspended.In this respect, with reference to the reasoning stated above the adminis-trative act which is the subject of the proceedings and has been determined to be unlawful, from the perspective of the Claimant company it must be ac-cepted that it will result in difficult to remedy or irreparable damages as it shall result in the Claimant company’s commercial activities and processes being delayed and such delay will re-sult in a violation of its rights.For the above stated reasons; in the event the administrative act which is the subject of the proceedings which is clearly unlawful is implemented will result in difficult to remedy damages, pursuant to Article 27 of Law No. 2577 it was unanimously decided to grant a stay of execution without deposit of any security, and in accordance with sub-section 6 of the same Article, the right to object to this finding is available by applying to Eskişehir District Adminis-trative Courts within (7) days of service.”The judgement of the Administrative Court provided the legal grounds for its findings and provides a precedent. However, despite the Administrative Court’s favorable finding the ultimate solution would be annulment of the Circular as the above mentioned judi-cial route costs the investor on average 6 months of its time.

Source: jollofnews.com

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November 25 - 26 Africa Mining Summit, İstanbul, africaminingsum-

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December 9 - 10 10th China Gold & Precious Metals Summit, Shangai -

China, chinagoldsummit.com

December 9 - 11 Drilling Symposium, Ankara, jmo.org.tr

January 21 - 23 Expo Geothermal, Ankara, powernextfair.com

February 22 - 24 SIMFE 2016, Khartoum - Sudan, sudansummit.com

April 11 - 15 69th Geology Congress of Turkey, Ankara, www.jmo.org.tr/

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March 23 - 26 Marble 2016, İzmir, marble.izfas.com.tr

May 4 - 6 7th Geochemical Symposium, Antalya, jeokimya.ankara.edu.tr

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May 23 - 25 2Expo Mongolia, Ulanbataar - Mongolia,

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June 1 - 5 Ankomak, 21st International Construction Machines Fair,

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September 23 - 28 SEG 2016 - Tethyan Tectonics and Metallogeny,

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November 24 - 27 Tüyap Mining Mining, Tunneling, Machinery Equip-

ments and Heavy Duty Vehicles Fair, İstanbul, madenturkiyefuari.com

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