mining turkey issue9 fall 2015

8/20/2019 Mining Turkey Issue9 Fall 2015

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

Mining & Earth Sciences Magazine

by ISSN: 2146-9423

Turkey: At The Cross-Roads

Gold Metallogeny of Turkey – A Quantitative Assessment

The Largest of Europe:Tüprag Kışladağ Gold Mine


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2Fall 2015

contents4.....6.....

14.....16.....

18.....30.....32.....33.....34.....40.....

42.....44.....

48.....50.....52.....54.....56.....58.....60.....

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Mining Turkey is published biannually byMayeb Madencilik ve Yer Bilimleri Basım YayınDağıtım Ltd. (Yayın Sahibi)A. Öveçler Mah. 1335. Sk. Vadi Köşk Apt. No: 6/8Çankaya / ANKARA / TURKEYPhone : +90 (312) 482 18 60 • Fax : +90 (312) 482 18 [email protected] • www.miningturkeymag.com

Editor - International RelationsHazal [email protected] Editor (Sorumlu Yazı İşleri Müd.)O. Çağım Tuğ

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Prof. Hakan BenzerProf. İlkay KuşcuProf. M. Emin CandansayarProf. Talip GüngörAssoc. Prof. Ali SarıışıkAssoc. Prof. Hakan BaşarırAssoc. Prof. Melih GenişAssoc. Prof. Melih İpharAssoc. Prof. Niyazi BilimAssoc. Prof. Nuray DemirelAssoc. Prof. Özcan YiğitAdvertising [email protected] Subscription [email protected]şak Matbaacılık ve Tanıtım Hiz. Ltd. Şti. Macun Mah.Anadolu Bulv. No: 5/15 Yenimahalle - ANKARA

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FROM THE EDITOR TURKISH MINING SECTOR NEWS INTELLIGENT DESIGN - Sandvik CULMINATION OF 29 YEARS OF EXPERIENCE AND KNOWLEDGE ACCUMULATION... - Engeotek TURKEY: AT THE CROSS-ROADS - Dr. Kerim Şener NEW UNDERGROUND DRILL RIGS FROM BARKOM GROUP - Barkom ZENİT MADENCİLİK - Zenit Madencilik DAMA ENGINEERING - Dama Engineering THE LARGEST OF EUROPE: TÜPRAG KIŞLADAĞ GOLD MINE ARDEF EXPANDED ITS GLOBAL FOOTPRINT BY PARTNERSHIP AGREEMENT WITH RPM - Ardef WEIR MINERALS TURKEY - Weir MineralsGOLD METALLOGENY OF TURKEY – A QUANTITATIVE

ASSESSMENT - Özcan Yiğit ATİLLA MAKİNA - Atilla MakinaBEING A PIONEER GOLD REFINERY IN TURKEY - Nadir Metal Refinery GOLD MINING IN TURKEY - M. Ümit Akdur / Dr. Muhterem Köse ADJARA HYDRO RACES AHEAD - Atlas CopcoKOZA, TURKEY’S “GOLD” COMPANY - Koza Altın ARIANA RESOURCES - Ariana ResourceEFFECT OF THE PRIME MINISTRY’S CIRCULAR 2012/15 ON MINING LAW - KGEC Law Firm

ADVERTS INDEX EVENTS LIST

Cover Photo

The Kışladağ Gold Mine is an open-pitoperation which belongs to TüpragMetal Madencilik San ve Tic. A.Ş. is awholly owned Turkish subsidiary of theCanadian-based mining firm EldoradoGold. The Kışladağ mine site is locatedon the administrative boundary be-tween the Ulubey and Eşme districts of

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

F a l l 2 0 1 5 | V o l 5 | N u m b e r 9 | w w w

. m i n i n g t

u r k e y m a

g. c o m

M i n i n g & E a r t h S c i e n c e s M a g a z i n e

b y

I S S N : 2 1 4

6 - 9 4 2 3

T h e L a r g e s t o

f E u r o p e :

T ü p r a g K ı ş l a d

a ğ G o l d M i n e


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4Fall 2015

Gold has occupied an important position in human culture more than 6000 years. Ancient civilizations used gold for several

purposes in their lives, and we still use gold to meet our needs in the modern age. Although fossil studies showed that natural

gold was found in caves, and it was probably used by Palaeolithic Men in 40,000 BC, the first gold was smelted by ancient Egyp-

tian goldsmiths in about 3600 BC. Egyptian pharaohs and temple priest used gold as relic metal for adornment, meanwhile the

exchange of Egypt was barley instead of gold.

The more value gold gained, the wider geography it started to be used in by people. The “Gold of Troy” a.k.a. “Priam’s Treasure”

treasure hoard, excavated in Turkey and dating to the era 2450 -2600 BC.

During archaeological studies, a large amount of gold artefacts was found in Mesopotamia region, which was located between

the Tigris (Dicle in Turkish) and Euphrates (Fırat in Turkish) Valleys had no native golds.

Another archaeological site, Alacahöyük where the capital city Hattusa of the Hittite Empire was situated (2500 BC) is located

in central Turkey. In this archaeological site, Hittite kings were found buried with their own golds. The gold was obtained from

all other civilizations, and it was mixed and smelted into a melting pot.

The first use of gold as money claimed in Kingdom of Lydia which was located in western part of today’s Turkey in 700 BC. King

of Lydia, Alyattes developed the gold refining technology, and then the first stamped gold coins were produced in capital city

Sardis and used in trade by Lydian citizens. First Lydian gold coins were made of electrum (naturally occurring alloy of gold and

silver) lumps which were found in mountain streams of Lydia. King Croesus, son of Alyattes set the standards for coins to 98%

gold, and stamped it with the seal of king.

After Persian occupation on Lydia, Perisans brought the wealth of Egypt in addition to their own gold supply, but used the

Lydian gold smelting and refining technology. Persians exploited the alluvial golds, which were obtained from Arabian shore,

meanwhile Dardanelles of Lampsacus (Located in western Turkey, Çanakkale Province) started changing electrum coins into

gold coins to trade with Greeks.

Consequently, the journey of modern gold started the in Anatolia and expanded all over the world as time passes by. Today,

gold is demanded in all around the world for both ancient and modern uses. As it was in the ancient times, Anatolian people

desire gold more than many other nations. According to the statistics of 2013, Turkey is the 4th biggest gold jewellery con-

sumer of all world (175.2 tonnes annually).

As Turkey lies in Tethyan Metallogenic Belt, it has a significant potential to supply this amount of gold demand with its own

resources. Recently the country is the leader gold producer of Europe with 31 tonnes of annual production (in 2014). However,

Turkey has notable unexplored areas which may consist huge gold deposits. In order to do further exploration activities within

these areas, exploration companies should be encouraged with incentives or reasonable legislations. In order to use our gold

potential, all obstacles to gold mining in Turkey must be eliminated for the sake of having an advanced economy.

Anatolia: Where Gold Gained its Value

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Hazal Birses | [email protected]

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6Fall 2015

Pilot Gold Started 20,000 meters Drilling at TV Tower Pilot Gold announced that 20,000 me-

ters of drilling at TV Tower Project start-

ed on 13th of June. Pilot Gold owns the

60% of the project whereas the rest is

owned by Teck Madencilik, a subsidiary

of Teck Resources. The budget is esti-

mated 6 million dollars.

Lennox-King, President and CEO of Pi-

lot Gold expressed his positive feelings

about the discovery of the Valley and

Columbaz porphyries and growth of

the mineralized footprint at the Hilltop

porphyry at TV Tower, and he added;

“We believe these discoveries are only

the first porphyries at TV Tower and we

remain focused on driving district scale

growth through additional discoveries

in this rapidly evolving mineral belt.”

2015 program of company consists of

building on the discovery of the Valley

porphyry, focused on expanding the

footprint of mineralization and testing

high priority step out targets. Pilot Gold

will also continue with property-wide

environmental baseline studies and

comprehensive CSR programs.

June 2015

First Gold is Poured in AltıntepeStratex International Plc announced

that the first gold pour has been

achieved at Altıntepe gold mine.

Altıntepe is owned by a joint venturebetween Stratex (45%) and Bahar Ma-

dencilik (55%), and located in Black Sea

region of Turkey.

The construction at Altıntepe was

completed in October 2015, and the

first gold was poured on 6th of Octo-

ber. The Stage 1 operation, focusing

on exploitation of the Çamlık East

zone, is expected to deliver a mini-

mum of 30,000 oz gold per annum

over 34 months for a total 110,000 ozrecovered gold.

Bob Foster, Stratex Chief Executive,

said: “This is a major milestone for

Stratex as we move into the realms of

being a gold-producer. We would like

to acknowledge the very professional

work delivered by our Partner as they

have overcome the many hurdles that

confront putting any new mine intoproduction. We believe this partner-

ship approach to mine development

and delivering cash flow is an excel-

lent strategic model and especially so

during these difficult times faced by

the mining sector. We look forward to

taking this strategy forward as we fo-

cus on growing our production profile

through leading-edge exploration andappropriate acquisitions.”

November 2015

Construction of Kızıltepe Commenced Ariana Resources announced the com-

mencement of Kızıltepe Sector’s con-

struction on September 2. The con-

struction of Kızıltepe, which is a part

of Red Rabbit project, is being devel-

oped by a partnership between Ariana

Resources and Proccea Construction,

whereas the initial gold production is

expected to take place in H2 2016.

According to the announcement, min-

ing contractor has been assigned to

commence site works in October 2015,

while company has been clearing land

within the permitted areas of the mine

site. Besides, final negotiations on ma-

jor Turkish supplied plant components

are complete and long lead orders have

been placed.

Kerim Şener, Managing Director of Ari-

ana Resources stated, “We are excep-

tionally pleased to report that the con-

struction phase of the 20,000 ounce per

annum Kızıltepe Gold Mine has now

commenced.” Şener also commented,

“Our exploration team is preparing for

a resource development trenching and

drilling programme, which we are cur-

rently expecting to commence in Octo-

ber 2015.”

September 2015

Industrial Production of Turkey Raised 7.2% in August According to Turkish Statistical Institute

(TURKSTAT), industrial production index

values of Turkey raised 7.2% in August

2015 with respect to August 2014 and

2.9% with respect to July 2015. Industri-

al production index is ramped beyond

the expectations in August, whereas the

previous expectations was 1.55%.

Nevertheless, the index shows 3.8% of

drop in August 2015 with respect to July

2015 for mining and quarrying industries.

October 2015

Source: stratexinternational.com

Newswww.miningturkeymag.com


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As the gold mining industry

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Mineral Resource Estimation by Mariana Resources

Source: marianaresources.com

Mariana Resources announced the

results of the maiden Mineral Re-

source estimate for the high grade

gold copper Hot Maden Project. TheMineral Resource estimate was pre-

pared by an independent mining

consulting company, RungePincock-

Minarco Limited, and was based on

assay results received for drill holes

up to, and including, HTD‐17 com-

pleted on 25th June and is reported

in accordance with the JORC Code

2012 edition and estimated by a

Competent Person as defined by the

JORC Code. According to the report,the results are as follows:

• Indicated Resource: 4.71 million

tons at 10 grams per ton (“g/t”) gold

and 2.2% copper, for a gold equivalent

grade of 13.4 g/t and a total 2.033 Mil-

lion Oz Gold Equivalent.

• Inferred Resource: 3.65 Mt at 5.5

g/t gold and 1.8% copper, for a gold

equivalent grade of 8.2 g/t and a total

0.968 Million Oz Au Eq.

•

Total Mineral Resource Estimate: 3Million Oz Gold Equivalent at a gold

equivalent grade of 11.2g/t.

CEO of Mariana Resources, Glen Parsons

emphasized the importance of estimat-

ing 3 million oz. Au equivalent within 6

months of post discovery period of Hot

Maden. “The close spaced drilling and

continuity in the mineralized system

allows for approximately two thirds of

the resource to be categorized as Indi-

cated which is a significant upgrade.”said Parsons and added “Further poten-

tial exists to extend the known resource

to both the north and south, as well as

at depth. In addition, the potential for

new discoveries being made along the

highly prospective Hot Maden fault/al-

teration zone remains high.”

August 2015


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8Fall 2015

Alacer Gold announced that Çöpler

Mine has produced its one millionth

ounce of gold on 19 August. World

class Çöpler gold mine which is oper-ated by Anagold Madencilik that is a

joint venture company between Al-

acer Gold and Lidya Madencilik, has

been producing gold since December

2010. Since then, 33.6 million tons of

ore grading at an average of 1.6 grams

per ton has been processed.

Rod Antal, Alacer’s President and Chief

Executive Officer, stated, “Today’s one

millionth ounce represents an impor-

tant accomplishment for the ÇöplerMine and its employees. I am most

proud of the fact that this milestone

was attained while recording almost

7 million man hours worked without a

lost time injury”.

August 2015

1 Millionth Ounce of Gold was Produced in Çöpler Gold Mine

Export Champions of Turkey in Mining Industry was Declared

Metallurgical Results of Valley Porphyry is Announced Pilot Gold announced the metallurgi-

cal results from the Valley Porphyry at

TV Tower. The metallurgical program

was designed to test the amenability

of mineralization to produce gold and

copper concentrates, and according to

the results, up to 40% copper and 84

g/t gold concentrates could be yielded

after flotation process.

Matt Lennox-King, President and CEO

of Pilot Gold stated, Valley porphyry

could potentially be a satellite to our

40% owned Halilağa copper-gold proj-

ect, 15 kilometers to the east.”

Valley porphyry, which was discovered

in 2011 by the company, is neighbor-

ing Halilağa deposit along with Hilltop

porphyry and Columbaz porphyry.

September 2015

Source: alacergold.com.tr

Source: tim.org.tr

Export Champions of 2014 were an-nounced by Turkish Exporters Assem-

bly (TIM) on 21st of June. Top 10 export-

ers among the all exporting companies

of Turkey and the Top 3 sectors among

26 sectors were awarded at the cer-

emony. Eti Maden takes the first place

of exporting champions in mining in-

dustry, whereas Çayeli Bakır İşletmeleri

is ranked 2nd and Ekom Eczacıbaşı is

ranked in 3rd place.

President of TİM, Mehmet Büyükekşi

pointed minimum 5% annual growth

for 2023 target and he added “We

need a strong government which will

carry Turkey to future with a good ac-cordance and flexibility. We expect

permanent success in microeconomic

subjects along with macroeconomicgains from our future government.”

June 2015

Centerra Gold Obtained EIA for Öksüt Centerra Gold received the final approval

of the environmental impact assessment

(EIA) for Öksüt gold project. Öksüt project

is expected to start gold production in

early Q2 – 2017.

Estimated mineral reserves of the project

is 26.1 million tonnes at 1.4 g/t gold con-

taining 1.2 million ounces of gold using a

cut-off grade of 0.3 g/t.

Centerra believes there is exploration

upside on the property as evidenced

by recent drilling which extended the

Guneytepe deposit and has identified

additional oxide material in the Keltepe

NW prospect a kilometre away from the

existing reserve area. Additional drilling is

planned once the necessary drill permits

are approved.

November 2015


11/68Fall 2015

9

Ciner Group Becomes Leader Soda Ash Producer after OCI Resources Acquisition

Anatolia Resources Merges with Uranium ResourcesAnatolia Resources, a uranium explora-

tion and development company hav-

ing exploration operations and hold-

ing licenses within Turkey announcedmerger with Uranium Resources.

Uranium Resources will obtain the

rights of Temrezli Uranium Project in

Turkey, two 800,000 lb pa ISR uranium

processing plants and associated infra-

structure in South Texas and mineral

resource base at the Temrezli Project as

well as some other properties and cash

which are indicated in the articles of

the merger agreement.

“The Merger with Uranium Resourc-es provides an excellent solution

to Anatolia’s current objectives to

advance Temrezli into production as

quickly and efficiently as possible, and

brings with it the possibility of greatlyreducing the upfront capital costs if

we can successfully relocate and utilize

Uranium Resources’ Rosita ISR process-

ing plant in South Texas as currently

expected.” Said CEO of Anatolia Re-

sources Paul Cronin and added; “The

Rosita processing plant had major up-

grades and additions in 2007-2008 be-

fore construction was halted. It is fit for

our Temrezli Project, and has the added

benefit of already being designed andconstructed with the ability to scale up

the production profile from 800,000 lb

U3O

8per annum to 1.6 million lb U

3O

8

per annum with some additional up-

grades, which would accommodatepotential future production from satel-

lite operations that may feed into the

Temrezli central processing plant.”

Mineral resource of high grade Temrezli

Project is reported as:

• 2.008M tons @ 1378 ppm U3O

8for

6.1M lb U3O

8(Measured).

• 2.178 M tons @ 1080 ppm U3O

8for

5.2 M lb U3O

8(Indicated).

• 1.020 M tons @ 888 ppm U3O

8for 2.0

M lb U3O8 (Inferred). June 2015

Mining Export of Turkey Continues DownfallMining export statistics of Turkey for

H1 2015 are announced. The statistics

reveals that export of mining products

declined 9% in the first half of 2015

as against H1 2014. Turkey sold 11.51

billion tonnes of mining product for

$2.36 billion within the first 7 months

of the year.

Processed and block natural stone ex-

port ($1.11 billion) consist the majority

of overall mining export of Turkey. On

the other hand, boron products, chro-

mite, copper and zinc provide some im-

portant revenue to Turkey in H1 2015.

August 2015

Source: etisoda.com

Park Holding A.Ş, a subsidiary of Ciner

Group obtained 75% of OCI Resources

LP interests, which holds 51% of OCI

Wyoming, the leading soda ash pro-

ducer of the world, interests. There-

fore, Ciner Group becomes the new

leader soda ash producer of the worldwith 9% share of world’s total soda ash

production.

According to the definitive agreement,

approximately 73% limited partner inter-

est in OCI Resources, as well as its 2% gen-

eral partner interest and related incentive

distribution rights, are sold to Park Hold-

ing. The transaction is subject to custom-

ary closing conditions and regulatory

approvals and is expected to close by the

end of the third quarter 2015.

“We are really excited about our new

strategic relationship with Ciner Group

and their desire to help us expedite the

growth of our MLP. We think there will

be numerous opportunities to leverage

their expertise to help us grow our cash

flow,” said OCI Resources President and

CEO Kirk Milling.

“Ciner Group is pleased to welcome OCI

Resources to our family of companies.

With its position in markets that are

complementary to ours, OCI Resources

brings solid operational and financial

performance as well as industry-leading

safety performance,” said Turgay Ciner,

Chairman, Ciner Group.

Eti Soda, a subsidiary of Park Holding was

established in 1998 in order to extract,

operate and bring in economy trona

mine reserves in Beypazarı, Ankara. Com-

pany produces approximately 1 million

tons of soda ash annually since 2007.

July 2015


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10Fall 2015

Ariana Resources Designated the Next Gold Targets

Royal Road Looks for Deep Targets

Ariana Resources announced the re-

sults of a follow-up soil and rock-chip

geochemical programs conducted on

the Karakavak and Kepez West pros-pects at the Kızıltepe Sector of the Red

Rabbit Gold Project. Ariana plans to

commence construction of the mine

soon through the latest results.

The summary of the recent results are

as follows:

• Several additional significantly gold-

silver mineralized vein systems identi-

fied at Karakavak.

• Coincident gold (>20ppb Au) and

silver (>150ppb Ag) soil anomalies en-

countered along the full 1,800m strike

length of Kepez West.• Results underpin the broader re-

source potential of the wider Red Rab-

bit Gold Project, which has a current

global JORC resource of 475,000 oz of

gold equivalent.

• Kızıltepe mine construction expect-

ed to commence shortly ahead of first

gold pour in H2 2016 targeting 20,000

oz per annum.

“We are delighted that the additional

exploration work we are undertaking

is continuing to identify new zones of

resource potential.” said Kerim Şener,Ariana Resources Managing Director

and added, “Both Kepez West and Kara-

kavak contain several important drill-

ing targets for the Company, as it grows

its resource base at the Kızıltepe Sector

ahead of first production next year.”

July 2015

Royal Road Minerals announced the

drill results of 4 seperate holes from its

Gömeç gold project in Balıkesir prov-

ince of Western Turkey. The Gömeç

project comprises five contiguous

exploration licenses and is an early-

stage gold exploration project located

in the hinterland of Balıkesir province.

The company conducted two separate

reverse circulation programs in late

2014 and June 2015. After announcing

the first three hole’s drill results in July

2015, Royal Road announced four more

results from recently drilled holes. The

results are:

• GRC-024 10.0m at 1.0 g/t gold.

• GRC-025 14.0m at 1.0 g/t gold.

• GRC-026 22.0m at 1.0 g/t gold; and

10.5 g/t silver.

• GRC-027 52.0m at 1.0 g/t gold; and

10.8 g/t silver.

Drill hole GRC-027 is located 200 meters

away to the east of the broadly north-

west oriented fault zone intersected

in previous drilling” said Tim Coughlin,

Royal Road’s President and CEO, and

added “There is no obvious structure

at surface near GRC-027 which hints at

more than a simple fault control to gold

mineralization at Gömeç and provides

some further encouragement in terms

of size potential.”

August 2015

Pasinex Declared Their New Exploration PropertiesPasinex Resources Ltd. announced the

acquisition of 8 new zinc/lead proper-

ties in Adana province of Turkey. The

properties were acquired by Horzum

A.Ş. which is a joint venture company

between Pasinex Resources and Ak-metal A.Ş. The new properties are locat-

ed relatively close to Horzum’s current

projects namely Pinargozu and Akkaya,

as well as, the historic Horzum zinc

project. According to the announce-

ment, the properties were chosen for

their zinc potential because they have

similar carbonate hosted geology to

existing Horzum projects, and there are

some Turkish governmental approvals

to finalize acquisition.

“We are proceeding to achieve our tar-

get of being the largest zinc producer

company of Turkey conspiratorially. We

expanded our basin works strategically

with acquisition of 8 new properties.

Our partnership is in compliance with

Akmetal A.Ş, and both underground

operations and exploration surveys of

the JV accelerated through the teamwhich consists of local and foreign ex-

perts. Besides, we continue planning

and working to ramp up our produc-

tion capacity. Apart from these, we

have been doing our business by tak-

ing account of workers’ health and

safety at highest levels by using high

technology exploration and mining

equipment in our mines.” stated Soner

Koldaş, Country Director of Pasinex Re-

sources to Mining Turkey Magazine.On the other hand, the company com-

pleted a 4,760 ton (wet weight) lot sale

of high grade zinc material (with a lot

assay of 31.6% Zn) from its Pınargözu

zinc mine in August. Horzum A.Ş previ-

ously announced a 6,453 tons (wet wt.)

sale in December of 2014. Therefore,

company has reached to 11,213 ton

(wet wt.) total sales value.September 2015


13/68


14/68

12Fall 2015

Alacer Gold Signed a $250 Million Project Finance Agreement

Minister Alaboyun: Natural Resources Ministry Could be Established

New Discovery at Hot Maden

Alacer Gold signed $250 million senior

secured project finance facility which

was previously announced. Alacer is

financed by a lending syndicate includ-ing BNP Paribas SA, ING Bank A.S. and

Societe Generale Corporate & Invest-

ment Banking with a 7 year term facility.

Rod Antal, President and CEO of Al-

acer stated, “The facility represents yet

another step forward in de-risking theSulfide Project and further strength-

ens Alacer’s balance sheet enabling

increased flexibility to advance growth.

We are extremely pleased to have

closed the agreement on very competi-

tive terms with this lending syndicate.”September 2015

Minister of Energy and Natural Re-

sources Ali Rıza Alaboyun comment-

ed that “Natural Resources Ministry”could be established, and a special law

about coal mining could be introduced

soon. Legislative regulations are pend-

ing because the parliament is closed,

however parliamentary committee for

Soma disaster declared their concerns

to Prime Mininster Ahmet Davutoğlu,said Alaboyun.

Alaboyun emphasized that Security of

Supply for Mining Law should be enact-

ed as well as Coal Mining Law. He stat-

ed that underground mining of Turkey

is not sufficiently known, but General

Directorate of Mineral Research andExploration (MTA) is capable to reveal

the details between 200 – 1000 meters

beneath the ground.

September 2015

The latest drilling results and recently

obtained drill permits for Hot Maden

Project, which is operated by the part-

nership of Mariana Resources and LidyaMadencilik, were announced on 6th

of October. The results of 4 drill holes,

including 3 exploration and 1 resource

extension holes are given as follows:

• HTD – 23 19.9m @ 1.1% Zn, 28.7m

@ 1.8% Zn, and 3m @ 7.6% Zn from

21.1m, 66.5m, and 127.0 m downhole,

respectively.

• HTD – 24: 36.3m @ 21.7 g/t Au +

5.51% Cu from 22.3m downhole. Plus

7.5m @ 2.2% Zn from 97.5m downhole.

• HTD – 25: 25.2m @ 7.3 g/t Au + 0.47%

Cu from 42.8m downhole Including

9.0m @ 17.8 g/t Au + 0.6% Cu (45.0m –

54.0m) Plus 23.5m @ 3.8% Zn and 7.5m

@ 3.9% Zn from 80.5m and 120.5m

downhole, respectively.

• HTD – 26: 15.5m @ 1.5% Zn and 12.5m@ 4.1% Zn from 62.0m and 82.5m down-

hole respectively. Plus 1m @ 3.5 g/t Au +

0.36% Cu from 139.0m downhole.

Glen Parsons, CEO of Mariana Resourc-

es commented, “Encouragingly, as each

new hole in the Au‐Cu zone delivers

further continuity and grade, the size of

the Hot Maden Initial Mineral Resource

continues to expand. We now have

four new mineralized holes outside of

the Initial Resource Area comparable

to those that fall within the resource,

which is very exciting from a resource

growth perspective.

With these new drill permits we can

hopefully continue intersecting the

Au‐Cu zone by stepping out in 50m

sections southwards. Prospectivity ofthis substantial untested area has been

greatly enhanced by the high grade Au

intercept in HTD‐25 announced today,

which is 250m along strike of the Initial

Resource Area. As drilling now advanc-

es to the south, the potential of this

new zone should become apparent.

In parallel with the drilling, detailed

metallurgical testing is planned to de-

fine the optimum processing route for

this ultra high grade ore and will assist

in forming the basis of a Preliminary

Economic Assessment for Hot Maden.”October 2015

Export Champions of Turkey in Mining Industry was Declared Export Champions of 2014 were an-

nounced by Turkish Exporters Assem-

bly (TIM) on 21st of June. Top 10 export-

ers among the all exporting companies

of Turkey and the Top 3 sectors among

26 sectors were awarded at the cer-

emony. Eti Maden takes the first place

of exporting champions in mining in-

dustry, whereas Çayeli Bakır İşletmeleri

is ranked 2nd and Ekom Eczacıbaşı is

ranked in 3rd place.

President of TİM, Mehmet Büyükekşi

pointed minimum 5% annual growth

for 2023 target and he added “We need

a strong government which will carry

Turkey to future with a good accor-

dance and flexibility. We expect per-

manent success in microeconomic sub-

jects along with macroeconomic gains

from our future government.”

June 2015


15/68Fall 2015

13

Turkish Hard Coal Enterprises Discontinues Production at Kozlu

Eurasian Minerals Regains Akarca Project

Turkish Hard Coal Enterprises (TTK)

discontinues production at Kozlu Di-

rectorate in consequence of Ministry

of Labour and Social Security’s (ÇSGB)audit.

Production at Karadon and Amasra di-

rectorates of TTK were partially ceased

after the authorities of Ministry of La-

bour and Social Security, and TTK was

asked to make up shortages at these

directorates. Therefore, TTK adminis-

tration initiated a tender for hydrogensulphur sensor. TTK requested ÇSGB to

give extra time because the sensor is

not manufactured in Turkey, however

ÇSGB authorities decided to discontin-

ue production at Kozlu by the reason

of hydrogen sulphur sensor absence.

TTK Kozlu directorate, which has

1,200 tonnes daily coal production,is expected to lose 10 – 12 million TL

monthly as a consequence of ceasing

production.

October 2015

Vancouver based company Eurasian

Minerals regained the control of the

Akarca gold-silver project. Eurasianpreviously made an agreement with

Çolakoğlu Ticari Yatırım A.Ş. that com-

prises optionally acquiring 100% sub-

sidiary company of Eurasian Miner-

als, AES Madencilik A.Ş. in June 2013.

However, according to the announce-

ment which was released on 30th of

October, Çolakoğlu decided to foregoexercising the option.

The Akarca project is a Eurasian grass-

roots discovery highlighted by six sep-

arate gold-silver mineralized centers

occurring within a district-scale area.

Exploration completed to date in-

cludes 245 core and reverse circulation

holes totaling about 26,400 meters ofdrilling and property-wide geologic

mapping, geochemical sampling, and

geophysical surveys.

November 2015

First Trial of Ermenek Disaster Commenced The first trial of Ermenek disaster, which

caused 18 death of miners in a private

coal mine, completed on 18th of June.

According to Today’s Zaman, Has Şekerler

Mining Company Business Manager

Yavuz Özsoy was arrested in case of de-

stroying evidence or fleeing the country.

On the other hand, detention of owner of

the coal mine Saffet Uyar, top executive

at the Ermenek Cenne Lignite Coal Ltd.

Abdullah Özbey and a technical supervi-

sor Ali Kurt are extended by the court.

The next trial for the Ermenek disaster

will be held on 7 July 2015.

June 2015

Royal Road Minerals Commenced Drilling at Gömeç Project Royal Road Minerals, a gold and cop-

per focused mineral exploration and

development company, announced

the latest drilling results of Gömeç Gold

Project.

According to the announcement which

was published on 9th of June, drilling

permits had been received and then

the follow-up drilling commenced in

the following week.

The company plans to drill approximate-

ly 3000 meters including combination of

infill holes and step out holes along and

across strike of the previous drilling andexploratory holes on newly identified

and previously undrilled targets.

Gömeç Project, which is located in

Balıkesir province of Turkey, has a gold

mineralization with dominantly low-

sulfidation epithermal in style. The pre-

vious drilling results of Gömeç Project

was reported in 2014 as;

• GRC-014, 76 meters at 1.0g/t (includ-

ing 24 meters at 2.0g/t gold and 18.7g/t

silver).

• GRC-013, 56 meters at 1.0g/t (includ-

ing 22 meters at 2.0g/t gold and 15.6g/t

silver).

• GRC-015, 40 meters at 1.0g/t gold.

July 2015

Source: royalroadminerals.com

Source: haber.sol.org.tr


16/68


17/68Fall 2015

15

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20/68

18Fall 2015

INTRODUCTIONGold mining and exploration activity in

Turkey has witnessed a substantial and

sustained increase in the last decade,

largely due to the proactive and con-

structive policies of the Turkish Govern-

ment between 2002 and 2012 (Figure

1). Beginning with a single gold mine in2001, the country has now expanded its

industry to encompass nine mines pro-

ducing a combined 31t in 2014 (33.5t:

2013) of gold per annum (Figure 2). This

outstrips the combined gold produc-

tion of neighbouring countries (Arme-

nia, Azerbaijan, Bulgaria, Iran, Georgia

and Greece) by almost three times, de-

spite continuity of similar geology and

prospectivity across this region. Geo-

logically-speaking, Turkey is no more

prospective than its neighbours, so the

distinction from its peers as a producer

has been due to its perceived stability,

robust legal framework, relatively ef-

ficient bureaucracy, and its proactive

mining policy, all of which encourage

foreign investment.

Beyond its neighbours, it is notable

that Turkey is also the largest single

producer of gold in Europe, produc-

ing c.5t more gold per annum than all

other European gold producers com-bined; Finland and Sweden dominate,

producing c.15t between them. In ad-

dition to being relatively expensive to

operate in Europe, the continent also

typically views its mining industry as

an anachronism, a relict of a bygone in-

dustrial age finding itself at odds with

modern environmental concerns. Con-

trast this sentiment with that prevalent

in Turkey, where mining is seen as an

integral part of economic success and

as an industry that operates effectively

and productively under the most strin-

gent of environmental regulations. This

difference in attitude is the principal

reason for the success of the Turkish

gold mining industry in recent years.

However, this increasing trend in goldproduction, while positive, also needs

to be viewed critically from the per-

spective of resource depletion. It is

imperative for the long-term health

of the industry that further explora-

tion is encouraged. Fortunately, there

remains significant potential to make

new discoveries as the country remains

largely under-explored, in comparison

with many other gold producing na-

tions. The clearest indication of this isthe surprising fact that most deposits

discovered to date were outcropping

and located in the proximity of asphalt

roads. It is also notable that foreign

junior companies were responsible for

the majority of these discoveries dur-

ing a market-cycle down-trend in gold

price between 1989 and 1998. The sig-

nificance of foreign investment and the

application of predominantly foreign

risk-capital to the sector cannot be

underestimated, as Turkish investment

culture tends to be risk averse.

MINING INCENTIVES ANDPOLICYIn 2012, the Turkish Government intro-

duced a range of incentive schemes forTurkish industry. Mining was defined

as a strategic high-priority and allo-

cated one of the greatest ranges of in-

centives. Examples of such incentives

include: significant reductions in cor-

porate tax (from a statutory 20%), ex-

emption from VAT and custom duties,

interest payment support and elimina-

tion of employer social security premi-

um contributions. In addition, through

separate tax legislation, gold and silverproducers are able to reclaim VAT from

expenditure incurred through the ex-

ploration and development stages and

for producers there is no limitation on

the repatriation of profits following

taxation in Turkey.

In early 2015, the revised mining law

(number 6592) was passed. The law pri-

marily involved several modifications to

articles within the previous law (num-

ber 3213). A principal effect of the

new law will be to increase ground

turn-over and, over time, this will

Turkey: At The Cross-RoadsCONTACTS

Dr. Kerim Şener

Managing Director, Ariana Resources plc

E-mail: [email protected]

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

1,4

4,3

5,4 5,0 5,0

8,0

10,011,0

14,5

17,0

24,6

29,5

33,5

31,0

Figure 1. Bar chart of Turkish gold production from 2001 to 2014.

Gold Production / Year (Tonnes)

Articlewww.miningturkeymag.com


21/68Fall 2015

19

reduce the number of areas currently

sterilised to exploration due to under-

utilisation. Under the new law, only

currently producing or relatively near

term development projects are likely

to be retained by licence holders ow-

ing to the enhanced costs associated

with their maintenance. Licence areas

will be auctioned and an effort made

to define licence areas according to

geological continuity of mineralised

features, allowing for larger licences to

become available in the future. A new

State royalty framework has also been

introduced, which scales cleverly ac-cording to the commodity price. An

allowance provided for in the previous

law regarding a 50% reduction in roy-

alty in the event a producer establishes

their own processing facility, has also

been maintained.

The new law will fundamentally change

for the better the way in which both

exploration and mining is undertaken

in the country in the medium to long

term. In the past, large areas of the

country were effectively sterilised to

exploration because licence owners

could hold ground at minimal cost,

undertaking limited work. An increase

in the quality of reporting require-

ments associated with holding explo-

ration licences and the introduction of

minimum expenditure commitments

under previous regulations will also en-

sure better and more serious explora-

tion in the long-term.

The modifications to the mining law

have been viewed generally positively

by the industry. However, the cost

structure associated with maintaining

licences in good standing, particularly

for operating licences, has increased

substantially and the cost of acquiringnew licences is significantly higher than

in the past; it is now expected that com-

petitive auction or licence transfer will

dominate the licence acquisition pro-

cess. This aspect of the new law may

discourage new greenfield-type explo-

ration activity, which relies on fast and

cheap access to ground.

OPERATING MINESThere are currently nine operating gold

mines in Turkey; a figure that both ex-

cludes satellite operations at the Koza

Gold owned Ovacık hub and mines for

which the dominant economic metal is

not gold. While Turkey has experienced

significant growth in the number of

new gold mines entering production, a

few smaller mines have been exhaust-

ed in the past decade. However, the

number of mines opening each year is

currently exceeding the number that

are closing, signaling the strength of

the current advanced project pipeline.

Kışladağ, located in Usak Province and

operated by Eldorado Gold Corpora-

tion, is a gold-bearing porphyry mined

by open-pit with processing via heap

leach. It has been producing at a rateof up to c. 310,000 oz per annum mak-

ing it the largest single producer in

Turkey. In 2015 the output is expected

to be somewhat less, targeting approxi-

mately 240,000 oz, and this is primarily

due to the mining of lower grade (0.7

g/t Au) ore as a result of expansion as-

sociated with a new pit phase. Cash op-

erating costs are consequently higher

this year at up to US$650/oz compared

with previous years where it was closer

to US$450/oz, when ore grades were

closer to 1 g/t Au. The mine entered

production in 2006 and produced its

Figure 2: Map of Turkey showing the distribution of gold mines and major projects by size.


22/68

20Fall 2015

2 millionth ounce of gold during 2014,

with mining expected to continue for

19 years. Measured and Indicated re-

sources stand at 10.4Moz with Proven

and Probable reserves of 8.1Moz mak-

ing Kışladağ one of the largest gold de-

posits in Europe.Çöpler, located in Erzincan Province and

operated by Alacer Gold Corporation

(20% of the project is held by Lidya Ma-

dencilik San. ve Tic. A.S.), like Kışladağ

is a gold-bearing porphyry mined by

open-pit with processing via heap

leach. It has been producing at a rate of

up to c.270,000 oz per annum at a grade

of c.1.6 g/t Au making it the second

largest producer in Turkey. Cash oper-

ating costs are c.US$450-500/oz. Themine entered production in 2010 and

produced its 1 millionth ounce of gold

during 2015, with mining expected to

continue for 25 years. Measured and

Indicated resources stand at 8.2Moz

with Proven and Probable reserves of

3.9Moz (inclusive of sulphide zones).

Alacer is currently working on its ex-

pansion project to increase production

and to integrate fully the sulphide re-

sources in to the mining schedule.

Ovacık, located in İzmir Province and

operated by Koza Gold, initiated op-

erations in 1997 but due to permitting

issues remained on care-and-mainte-

nance until 2001. The mine operated

for some years under the ownership

of Newmont Mining Corp. before be-

ing acquired by Koza Gold in 2005, re-

maining in production ever since. In

addition to Ovacık, the nearby depos-

its of Çukuralan (active), Çoraklıtepe

and Kucukdere (both now exhausted)are/were mined as satellite operations

with ore trucked and processed at the

Ovacık CIL processing plant. Ovacık,

like all of its satellite deposits, is a low-

sulphidation system, containing three

major veins, with only the M and S veins

being mined underground. By 2007, all

open-pit mining had ceased and min-

ing continued through underground

development. The Çukuralan mine is

located 40km to the north of Ovacık,

with open-pit production commenc-

ing in 2010 and underground produc-

tion following in 2011. Production from

the Ovacık hub plant is c.160,000 oz

per annum. Combined Measured and

Indicated resources stand at 2.46Moz

with Proven and Probable reserves of

1.55Moz at the Ovacık hub.

Efemçukuru, located in İzmir Province

and operated by Eldorado Gold Corpo-ration, is an intermediate sulphidation

epithermal gold and base-metal vein

system mined by underground methods

with processing via gravity and flotation

concentration. It has been producing

at a rate of up to c.100,000 oz per an-

num, usually at high grades of c.8 g/t Au.

Cash operating costs are in the range of

US$550-600/oz. The mine entered pro-

duction in 2011 and is expected to be

mined for 11 years. Measured and In-dicated resources stand at 1.4Moz with

Proven and Probable reserves of 1.0Moz.

Himmetdede, located in Kayseri Province

and operated by Koza Gold, is located

on a thrust-fault hosted style of low-

sulphidation epithermal system and is

mined by open-pit with processing via

heap leach. It is the first gold mine to

have been discovered and developed

entirely by Koza personnel and entered

production in January 2015. While

Koza has had extensive experience op-

erating CIL gold mines in Turkey, this is

their first heap-leach operation. Koza is

planning to produce 100,000 oz per an-

num from oxide ore at a mining grade

of c.0.6 g/t Au. Measured and Indicated

resources stand at 0.93Moz with Proven

and Probable reserves of 0.62Moz.

Kaymaz, located in Eskişehir Province

and operated by Koza Gold, is located on

a listwaenite-hosted vein system and is

mined by open-pit with processing viaCIL. It has the capacity to produce at a

rate of c.110,000 oz per annum, typically

at high grades of c.5 g/t Au. The project

was commissioned in 2011 though pro-

duction has been interrupted on occa-

sion due to permitting issues, though

since early 2015 operations have re-

commenced. Measured and Indicated

resources stand at 0.46Moz with Proven

and Probable reserves of 0.44Moz.

A number of smaller producers such

as Bolkardağ (Gümüştaş Madencilik

ve Ticaret A.S.) and Midi (Yıldızlar

SSS Holding) make up the remaining

production, with some by-product

gold the result of mining Cu-Zn ore at

First Quantum Minerals Ltd Cayeli op-

eration near Rize and from the placer

operations owned by Pomza Export

Madencilik San. ve Tic. A.S. near Salihli.

DEVELOPMENT PROJECTSThere are a number of advanced de-

velopment projects in the country that

are at or nearing construction. These

projects will contribute to the next

wave of production and could see to-

tal Turkish gold output edge up over

its previous annual record of 33.5t,

which was set in 2013.

Red Rabbit, located across Balıkesir

and Kutahya provinces, is being devel-oped in 50:50 JV by Ariana Resources

plc and Proccea Construction Co. is in

construction. By H2 2016 the JV com-

pany, Zenit Madencilik San. ve Tic. A.S.

expects to have conducted its first

gold pour at its initial Kızıltepe mine,

with steady-state production of ap-

proximately 20,000 oz gold equivalent

per annum achieved shortly thereaf-

ter. The current mine plan involves

open-pit mining and CIL process-

ing over eight years at Kızıltepe (for

c.150,000 oz Au), with the potential to

expand this once additional resources

are identified within satellite deposits.

The mine will employ approximately

100 people. It is the intention of the

partners to develop its second mine

as a heap-leach operation at Tavsan in

the coming years, in order to achieve

a combined production rate of ap-

proximately 50,000 oz per annum.

Net proceeds will be distributed 51%Ariana, 49% Proccea once a US$33 mil-

lion development finance facility has

been repaid to Turkiye Finans Katilim

Bankasi A.S.

Altıntepe, located in Ordu Province, is

being developed in a 55:45 JV by Bahar

Madencilik San. ve Tic. Ltd and Stratex

International plc, respectively. By Q4

2015 the JV company, Altıntepe Maden-

cilik San. ve Tic. Ltd. expects to have con-

ducted its first gold pour, with steady-

state production of approximately

30,000 oz gold per annum. The current

mine plan involves open-pit mining


23/68


24/68

22Fall 2015

Dağı approximately 18 months after

that at Kirazlı. Both mines will operate

via open-pit and heap-leach. At Kirazlı

an average grade of 0.75g/t Au and 11.8

g/t Ag and at Ağı Dağı 0.55g/t Au and

3.3 g/t Ag. Kirazlı will have a five year

mine life producing at a rate of 99,000 ozAu and 601,000 oz Ag per annum, and

Ağı Dağı a seven year life producing at

a rate of 143,000 oz Au and 271,000 oz

Ag per annum. Cash operating costs are

expected to be low and in the region of

US$500 per oz for Kirazlı and US$570 for

Ağı Dağı. At Kirazlı, Measured and Indi-

cated resources stand at 0.76Moz Au

and 9.20Moz Ag, with Inferred resources

of 0.11Moz Au and 1.64Moz Ag. At Ağı

Dağı, Measured and Indicated resourcesstand at 1.69Moz Au and 11.85Moz Ag,

with Inferred resources of 0.25Moz Au

and 1.53Moz Ag.

Öksüt, is located in Kayseri Province and

owned by Centerra Gold, is a high-sul-

phidation epithermal system. The de-

posit was discovered in 2007 by Stratex

International plc. Centerra completed

an earn-in to 70% of the project in 2012

and then purchased the remaining 30%

of the project in 2013 from Stratex for

US$20 million in cash plus a royalty

of 1% NSR (capped at US$20 million).

Öksüt contains Probable reserves of

1.2Moz. Average annual production

will be 112,000 oz over eight years. The

mining grade will be approximately 1.4

g/t Au, and cash operating costs will be

in the region of US$490 per oz.

Kestanelik, located in Çanakkale Prov-

ince and owned by Tümad Madencilik

A.S. (a subsidiary of Nurol Holding Inc.) is

a low-sulphidation epithermal system.The project was acquired from ASX-

listed Chesser Resources in late 2014

for US$40 million in cash. The deposit

contains a resource of 0.75Moz gold

and 0.73Moz silver. Prior to selling the

project Chesser had been in the process

of completing a pre-feasibility study fol-

lowing a positive scoping study result

that demonstrated potential to mine

the deposit at a rate of 63,000 oz Au per

year over six years. Tümad are currently

in the process of progressing the proj-

ect to feasibility stage.

Yenipazar, is located in Sivas Province,

owned by Aldridge Minerals Inc. is a

polymetallic VMS system containing

Au, Ag, Cu, Pb and Zn. Aldridge itself

is 30% owned by ANT Holding A.S.,

which is a diversified Turkish conglom-

erate specialising in the energy and

trade sectors. In terms of revenue split,the project will produce 55% precious

metals and 45% base metals, produc-

ing gold at an average annual rate of

54,000 oz over a twelve-year mine life.

At present, freehold land acquisitions

are underway and the company is pur-

suing project financing alternatives.

Once finance arrangements and pre-

construction planning has been com-

pleted Aldridge expects construction

to take 24 months.İnlice, located in Konya Province and

owned by Esan Eczacıbaşı was acquired

from NTF İnşaat Tic. Ltd. and Stratex In-

ternational plc for US$10 million in cash

in 2013. Like many development proj-

ects this appears to have been affected

by substantial delays in the granting of

requisite forestry permits. Typically for

a high-sulphidation epithermal system

generally poor leach recovery of gold is

recorded for the sulphide zone, so the

economic reserve is limited to 60,000

oz Au in the oxide material only. NTF

and Stratex had completed a heap-

leach feasibility study for the project

based on two to four year mine life pro-

ducing at a grade of c.2.3 g/t Au.

Taç and Çorak, located in Artvin Prov-

ince, had been held by Mediterranean

Resources Ltd and was bought by Cen-

giz Kaya for US$4.6 million in March

2015 via the sale of all outstanding

shares in Akdeniz Madencilik A.S.(Mediterranean Turkish subsidiary). In

2011, Mediterranean had published

a Preliminary Economic Assessment

for the project, considering produc-

tion of c.95,000 oz per annum over

c.7 years from two separate open pits.

The resources are substantially larger

and stand at c.1.9Moz at a grade just

under 1 g/t Au with potential for by-

product Cu, Ag, Pb and Zn. The proj-

ect has been plagued by the Yusufeli

dam development programme, which

formally commenced in early 2013.

This could leave the higher-value Taç

property partly underwater.

Kubaşlar, Mollakara and Söğüt are all

owned by Koza Gold and are at various

stages of development. While Kubaşlar

is likely to be developed as a satellite of

the Ovacık Hub, Söğüt would need to

be developed as a stand-alone mine.Likewise with Mollakara, in Agri Prov-

ince, though it appears highly unlikely

that Koza would be in a position to de-

velop the deposit due to the difficulties

associated with operating securely in

far eastern Turkey at the present time.

TREND IN EXPLORATIONPROJECTSA large number of foreign companies

have been responsible for much of thegold exploration in Turkey during the

last few decades, as they have had ac-

cess to the sort of risk-capital that has

not been available in Turkey. The Turk-

ish Gold Miners Association estimates

c.US$ 700 million has been spent on

exploration by foreign companies in

the past 25 years. Since a peak was

reached in 2012-13, the number of for-

eign companies with active exploration

projects has decreased somewhat and

this is partly due to the reduction of ex-

ploration budgets globally. The current

group of gold exploration and develop-

ment companies includes: Alacer Gold,

Alamos Gold, Aldridge Minerals, Ariana

Resources, Centerra Gold, Eldorado

Gold, Eurasian Minerals, Frontline Gold,

Mariana Resources, Nuinsco Resources,

Pilot Gold, Stratex International, Teck

Resources, Glencore and Zenith Miner-

als. Current projects of note are shown

in Table 1.While Turkish companies have proven

themselves as adept performers in the

sector and have done well with the

discoveries made possible by foreign

capital, they tend not to be as willing

to spend the often-considerable funds

required for exploration. It is apparent

that Turkish enterprise does not have the

same outlook on exploration risk as com-

panies that secure their funding from

international stock markets (notably the

AIM, ASX and TSX). It is therefore essen-

tial for the long-term health of the Turk-

ish gold sector to foster an environment


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26/68

24Fall 2015

that continues to encourage exploration

spending by foreign companies.

TREND IN LOCAL OPERATORSAs a corollary of the above trend for

foreign junior explorers, a pronounced

acquisitions strategy has emerged

amongst Turkish conglomerates in

the last five years in particular. This

trend was initiated primarily follow-

ing the successful partnership of the

Calik Group with what is now Alacer

Gold, and also in part due to the home-

grown success of Koza Gold. Since

then many other Turkish conglomer-

ates or holding companies, typically

with backgrounds in construction,

have entered the fray and have com-

menced a rampant acquisitions spreeof advanced gold projects. Such ac-

quisitions have taken place typically

for cash and at decent valuations, plac-

ing the average value per resource

ounce of Turkish gold projects at a

healthy US$54 (though valuations up

to US$168 per ounce are achieved for

Reserves). This quid pro quo has been

beneficial for the Turkish companies

wanting to develop mines and for the

junior explorers, which need to capital-

ise on their discoveries to sustain their

business model. As a result of these

acquisitions, there are perhaps twenty

Turkish companies that are now in-

volved in gold projects at varied stages

of development (Table 2).

INTREPID TURKSNot all Turkish mining companies have

felt themselves restricted by nationalborders. Indeed, in 2012 an article in

Mining Journal (Turkey: Constructing

the Future) predicted that some Turk-

ish companies would start looking

at projects more globally. In the few

years since, Koza Gold, MNG Group

and TAHE International Mining Inc.

among some others, have taken the

lead on overseas gold projects. It will

be encouraging to see if these home-

grown Turkish gold miners see successin the international arena. There is ev-

ery reason to believe that they will be

successful, especially given the reach

Turkish construction firms already

have throughout Africa, the Middle

East and Central Asia.

Koza Gold has signed exploration joint

venture agreements with Lonmin plc,

IMC Exploration (both in Ireland) and

Greenore Gold plc (in Scotland). Koza

also established a company in the UK

capitalised at £60 million to develop

its overseas interests. It remains active

and on the look out for new acquisi-

tions and joint venture opportunities.

In early 2015, the MNG Group bought

the Balogo gold project, in Burkina Faso

for US$10 million in cash from ASX-

listed Golden Rim Resources, involving

certain staged payments including US$

3 million on commercial production

and a 1% NSR. The Balogo project has

an Inferred resource of 850,000t, grad-ing 6.8 g/t Au for 185 000 oz Au.

TAHE International Mining Inc. was in-

volved in the discovery of a 0.46Moz

Abu Sara gold mine in Sudan. In 2012,

the company finished construction of

its processing plant and producing its

first gold in early 2013. Abu Sara was

initially producing at a rate of 10,000

ounces of gold per year at a grade of

about 3 g/t Au but gold production

was increased to 25,000 oz per annum.

Further expansion plans could see

the project producing up to 100,000

oz per annum in the event that the

Project Company Deposit Style Stage

Berta Glencore (64%)/Nuinsco(36%)

Porphyry Cu-Au Exploration

Dursunbey Polimetal (50%)/Alacer(50%)

Low-sulphidation epither-mal gold base-metal

Resource

Gömeç Oremine (100%) Low-sulphidation epith-ermal

Exploration

Halilağa Pilot Gold (40%)/Teck (60%) High-sulphidation PEA

Himmetdede South Impact Replacement epithermal Exploration

Hot Maden Lidya (70%)/Mariana (30%) Intermediate sulphidationepithermal

Resource

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

Kavaklıtepe Zenith Minerals Ltd optionfrom Teck Resources Ltd

Low-sulphidation epith-ermal

Exploration

Salınbaş Eldorado (51%)/Ariana(49%)

Replacement epithermal& porphyry Cu-Au-Mo (atArdala)

Resource

Sisorta Eurasian Minerals High-sulphidation epi-thermal

Resource

TV Tower Pilot Gold (40%)/Teck (60%) High-sulphidation epi-thermal

Resource

Table 1: Active exploration gold exploration and resource development projects in Turkey. Provided in

alphabetical order by project name.

Turkish

Company

Part ner Projec t(s)

Anadolu Export n/a Karaağaç

ANT Holding(30% shareholder inAldridge)

Aldridge Minerals Yenipazar

Bahar Madenilik(55%)

Stratex International(45%)

Altıntepe

Çolakoglu TicariYatırım (option)

Eurasian Minerals Akarca

Esan Eczacıbaşı n/a Şahinli, Serçeler,İnlice

Lodos Maden Muratdere

Lidya Madencilik(80%)

Alacer Gold (20%) İvrindi,Sarıçayıryayla,Cevizlidere

Lidya Madencilik

(50%)

Alacer Gold (50%) Karakartal,

DursunbeyLidya Madencilik(20%)

Alacer Gold (80%) Çöpler

Lidya Madencilik(70%)

Mariana Resources(30%)

Hot Maden

Oremine (n/a) (n/a) Gömeç

Özaltın Eti Bakır A.S.(royalty)

Cerattepe

Polimetal (50%) Alacer (50%) Dursunbey

ProcceaConstruction Co.(50%)

Ariana (50%) Red Rabbit(Kızıltepe andTavşan)

Santral Madencilik n/a Taç/Çorak

Tümad Madencilik n/a Kestanelik

Yıldızlar SSSHolding

n/a Midi

Table 2: Examples of Turkish companies with gold

projects showing their partners (if any) and the name

of the projects in which they are interested. Provided

in alphabetical order by Turkish Company name.


27/68

expected resource additions are re-

alised through further drill-testing.

RECENT DEVELOPMENTS ANDCHALLENGESIn the light of the above analysis, the

reader would be forgiven for believ-ing all is generally rosy in the Turkish

gold mining sector. However, in recent

years, the view of Turkey has shifted

from that of an emerging-market dar-

ling to one viewed more cautiously by

the increasingly discerning exploration

investment world. Simplistically, this

shift in sentiment is apparent from the

number of foreign exploration compa-

nies represented in Turkey. This peaked

in 2012-13, with 24 companies incur-ring record exploration expenditure,

compared with the current number of

16. While this change is at least partly

due to the tougher environment for

the mining sector globally with de-

creased commodity prices, it is also a

result of the conditions uniquely af-

fecting the Turkish mining industry in

recent times. It is also notable that the

majority of departees were Australian,

which is significant in that Australian

junior explorers are typically more risk-

sensitive than their Canadian or British

counterparts. Therefore, the presence

or otherwise of Australian explorers is

usually a good barometer for explora-

tion investment conditions in any giv-

en country.

Specific challenges from the perspec-

tive of foreign investors are:

1. Political developments: Political un-certainty following the 7 June 2015 elec-

tions and the failure of the political par-

ties to establish a majority government.

Anagold - Çöpler open pit operation


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26Fall 2015

It would appear that this uncertainty will

continue until new elections on the 1 No-

vember 2015 at the very least.

2. Security issues: A greater numberof security threats across the country,

particularly in the south-east, which are

reflective of increased regional insta-

bility. It would appear that SE Turkey,

although highly prospective, will again

miss out on sufficient exploration in the

medium term.

3. Permitting delays: Stultifying con-ditions imposed by the Prime Minis-

terial Decree of 16 June 2012 which

resulted in decision-making for land

access permits by relevant government

departments (e.g. forestry) the affair of

the Prime Ministry.

4. Bureaucratic uncertainties: Rap-idly changing legislation has resulted in

periodic uncertainty and confusion for

both the bureaucracy and the mining

sector. The mining law has been modi-

fied three times in just over a decade,

while environmental legislation and re-

porting requirements are also far from

static.

5. Access to ground: The small num-ber of recent government licence

auctions limit the ability of exploration

companies to access ground quickly

and easily. In addition to this, the geo-

logical survey (MTA) as been placed in a

directly competitive situation with the

industry and has been granted a pre-

emptive right on licences.

Due to perceived risk factors, Turkey is

now ranked more poorly than it was

in the recent past; slipping from 29th

place in 2013 to 78th place in 2014 (out

of 122) in the Fraser Institute Annual

Survey of Mining Companies. Conse-

quently it has become increasingly dif-

ficult to attract foreign exploration and

development capital to the country. It

is worth noting that the current Fraser

Institute ranking positions Turkey be-

tween Eritrea (77th) and Mozambique

(79th), which should be taken as seri-

ous indictment of government actions

in recent times. It is also worth noting

the specific comment made by the Fra-ser Institute concerning Turkey:

“There is extreme difficulty getting any

environmental and other permits/licens-

es from the government due to the poli-

tics of the Erdogan administration.”

It has been demonstrated that capital

flows preferentially to those locations

that provide the greatest security and

competitive advantage. Although Tur-

key made significant adjustments to

ensure it became a focus for foreign

investment in the recent past, through

the introduction of liberal and pro-for-

eign investment policies, current devel-

opments are causing a marked nega-

tive effect on the perception of Turkey

as a solid investment jurisdiction. This

is witnessed explicitly in recent cross-

sector greenfield investment figures,

which countrywide were previously in

the range of US$8-10 billion per annumbefore dropping to US$4.6 billion in

2014. With continued political uncer-

tainty and regional risk factors becom-

ing more pronounced in the eyes of in-

ternational investors, it is probable that

foreign investments in the country will

continue to fall.

For any country, it takes a long time for

confidence to be built, particularly for

an industry sensitive to long-lead times.

Turkey was already known as a coun-try that involved greater than average

lead times to bring gold discoveries to

production; 17 years on average (com-

pared with a 10 year global average).

This is attributable directly to the dif-

ficulties associated with the navigation

of bureaucratic hurdles in the shifting

political landscape prior to 2002. Since

then Turkey has done a great deal to

build a better and more stable reputa-

tion, though recent developments now

put this at risk.

The slight drop in gold production

that Turkey witnessed between 2013

and 2014 may reflect the impact of

this changing environment for invest-

ment. While two data points are hardly

a trend, it is probably more than coin-

cidence that the drop in output cor-

responds to the same period in which

permitting issues started to put brakes

on the industry and at a time when

there were temporary government-im-posed suspensions of mining activities

at the operations of Koza Gold. This ob-

servation needs to be tempered in the

knowledge that other factors have also

been in play, notably the sharp fall in

the US dollar gold price, which meant

that producers have naturally shifted

to mining higher grade ore (which may

not be there to mine!).

Compounding the situation for the gold

mining sector overall are the specific cir-

cumstances of Koza Gold. Over the past

decade, Koza transformed itself from a

single mine producer to a Turkey-wide

Ariana Resources - Kepez West prospect


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Turkey, Ankara Ofice

Address: 1314.Cadde (Eski 8. Cadde)1329. Sokak (Eski 72. Sokak)No: 12/5 Öveçler-Ankara, Turkey Tel: +90 (546) 646 00 06

Turkey, Ankara Laboratory

Address: 1455. Sokak, No: 17,İvedik Organize Sanayi,Yenimahalle/Ankara, Turkey Tel: +90 (312) 394 11 00

Turkey

Analyzing Services

• Alteration Petrography

• Gold Grade Analysis

• Ore – Mineral Analysis

• Precious Metal Analysis

• Industrial Minerals

• Industrial Mineral Analysis

• Geochemical Analysis

• Rock Petrography

• Metal Alloys Analysis

• Rare Earth Analysiss

We stand by you at your

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www.huge-labs.com

operator with up to four mines produc-

ing at any one time. Taking on the old

Normandy/Newmont mines at Ovacık

and Mastra, it transformed the outlook

for the Turkish gold industry by creat-

ing a truly home-grown gold mining

enterprise. Listing on the IstanbulStock Exchange in 2010 following an

IPO raise of US$436 million, Koza’s suc-

cess resulted in several other Turkish

conglomerates taking an interest in the

sector, with several now demonstrably

emulating its development. It is espe-

cially unfortunate, that in recent times

the Koza group of companies appears

to have been singled out by the gov-

ernment as part of a broader political

gambit. Confidence in the Turkish goldindustry will be further eroded if the

Koza group of companies remains a po-

litical target, for while Koza is a Turkish

company, it is approximately 25% for-

eign-owned, and foreign capital has a

propensity for being frightened easily.

From the perspective of foreign inves-

tors, current uncertainties in Turkey

are having a particular effect on the

availability of funding for exploration.

In addition, recent changes to mining

legislation, although largely encourag-

ing, have been hampered by a delay

in publication of the associated regula-

tions. Furthermore, permitting on anygovernment land (e.g. forestry) has

been problematic since the Prime Min-

isterial Decree was issued. What was

initially considered by observers to be a

temporary measure, lasting perhaps six

months, is still in force over three years

later. This issue alone has been respon-

sible for considerable loss of confidence

in the Turkish mining industry and, giv-

en the scale of its negative impact, it is a

mystery why it remains in force.It is remarkable that the Turkish gold

mining industry has proved as resilient

as it has in the face of such challenges.

The low cost of production that Turk-

ish mines have been able to maintain

is certainly a reason for this. Unit costs

for both exploration and mining activi-

ties are relatively low by international

standards, with several of the world’s

lowest cost producers located in the

country. The encouraging range of in-

vestment incentives for mining com-

panies has also helped promote the

industry.

Despite these recent developments, itis important to emphasize that Turkey

will remain at the forefront of gold pro-

duction in Europe for the foreseeable

future. In only a decade, it has trans-

formed itself as a potential investment

destination for gold mining and explo-

ration. In contrast with the policies of

its neighbours, Turkey has taken sig-

nificant strides to create a positive en-

vironment for investment in the sector.

This has clearly paid off and it demon-strates the absolute imperative of sta-

bility, rule of law, efficient and honest

bureaucracy and sensible mining poli-

cies for exploration and mining invest-

ment decision-making by international

companies. Turkey would do well to

ensure it retains its track record in this

respect so that it maintains its position


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28Fall 2015

as a premier destination for mining

companies globally.

IMPORTANCE OF EXPLORATIONIn many ways the producing gold mines

of today represent the low-hanging

fruit of the Turkish gold mining sector,as foreign companies largely discov-

ered these deposits about 20 years ago

during an earlier wave of exploration.

If the industry is not provided with the

opportunities to continue exploration

through supportive policies and swift

permitting, the gold mines of tomorrow

will not be discovered and the Turkish

gold industry could wither on the vine.

Exploration in Turkey is unfortunately

stifled because of the continued diffi-culties of obtaining exploration licenc-

es and permits cost-effectively and

due to the infrequency of government

auctions. Following the introduction

of the Prime Ministerial Decree, these

difficulties have applied even for ex-

ploration-stage projects, upon which

delays and uncertainties are unten-

able for most explorers. Consequently

some companies have been revising

their position on Turkey and diversi-

fying portfolios elsewhere, driven by

recent difficulties with licence acquisi-

tion and permitting.

As a result, the outlook for the Turk-

ish gold mining industry will continue

to see production from existing op-

erations and from the development of

several advanced projects now owned

by Turkish companies. However, gold

exploration is decreasing dramatically

in part due to circumstances across the

sector globally but also exacerbated bycertain decisions that have been made

by the Turkish Government in recent

times. It is important for the govern-

ment to recognise that exploration is

what drives the industry in the long-

term and it is essential that the country

adopt explicit policies that enhance

the success rate of exploration. At the

very least, it is essential for mining and

exploration to be exempted from the

Prime Ministerial Decree to ensure the

long-term health of the industry. This

would enable companies to commit to

spending on exploration once more,

without excessive delays and uncer-

tainty, and encourage the develop-

ment of new mines.

Beyond that, and this may be wishful-

thinking, the government could also

permit all geoscientific data held by

the geological survey (MTA) and licence

data held by the mines department (MI-

GEM) to be made publically available

online and at no cost to the end user. All

relevant historic exploration and mining

data should be digitally captured from

reports and made available through

the same system, which would ensure

licence owners do not need to repeat

the same exploration undertaken in the

past. There is evidence to show that this

approach fosters an environment that

contributes significantly to long-term

exploration success. It is a model thathas worked exceptionally well for coun-

tries like Australia, which notably is the

world’s largest producer of gold outside

of China. Turkey could and should emu-

late the Australian model.

CONCLUSIONSThe Turkish gold industry lives or dies ac-

cording to the macro-economic trends

in the sector, perceived investment sta-

bility of Tu

mining turkey issue9 fall 2015

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