DENVER, Colorado (miningweekly.com) –Turkey-focused intermediate gold producer Alacer Gold is aggressively pursuing near-term growth opportunities.

With sulphide ore production the next step at its flagship Çöpler mine, in Erzincan province, which would add about 20 years of positive cash flow to the company’s balance sheet, the company was now focusing on finding new ounces in the district, as well as at its portfolio of 14 geographically diverse exploration properties.

CEO Rodney Antal on Monday told delegates at the Denver Gold Forum that Alacer had found three significant drilling targets at the company’s Dursunbey and Çöpler prospects.

The majority of Çöpler holes recorded results of 1 g/t to 2 g/t of gold, and the Dursunbey results reported significant mineralisation of between 37 g/t to 179 g/t of silver as well.

According to some analysts, 1 g/t was, on average, a good yardstick to use when determining whether a company’s gold resources were viable and, given Alacer’s current low-cost outlook and location in Turkey, the company’s most recent exploration results augured well for it to economically mine veins even below this benchmark.

At Dursunbey, which Alacer discovered last year, the focus now turned to continue with infill drilling and on starting initial metallurgical reviews to understand the future of the shallow orebody, Antal said.

The Dursunbey prospect is located about 190 km south of Istanbul, in Balıkesir province of western Turkey. Drilling at the prospect during 2013 intercepted encouraging gold, silver and base metals mineralisation hosted in a variety of metamorphic rocks, primarily schists. The 2014 programme included infill and extension drilling, with the aim of determining the continuity and extent of mineralisation.

“With further promising exploration results at Dursunbey, our exploration efforts and budget have been directed to this project. Due to the continued exploration success, further drilling is planned at Dursunbey and we have started the initial metallurgical testwork to determine the processing options for this polimetalic mineralisation. As a result, we expect well over 50% of our exploration budget will be spent on the Dursunbey project,” he said.

Antal noted, however, that the company’s most pressing priority was to find more oxide ore that would drive an inexpensive near-term growth profile. “If we are successful in delineating more oxide ore in the Çöpler district, we could leverage existing infrastructure, which would provide us with significant cash flow, and high margins. We are looking for satellite oxide deposits to help supplement feed, owing to the plant’s extra capacity,” he said.

The company was reviewing current parameters for the leachable ore operation. Antal said a study was currently under way to potentially add 15-million to 20-million tons to the heap leach pad, using existing infrastructure. The study would look at a 50-million-ton leach pad.

“With the potential to add capacity to the existing heap leach pad that will use existing infrastructure, the incremental cost to expand should be lower than constructing a new pad in another location. Therefore, the exploration programme for the Çöpler district under this scenario is being redefined to accelerate the drilling for satellite oxide gold deposits, subject to receiving the necessary permits,” he said.

Alacer had budgeted $21-million for exploration activities this year.

As at December 31, Çöpler had proven and probable reserves of 57.9-million tonnes grading 2.06 g/t gold for 3.8-million ounces, and measured and indicated resources of 152.9-million tonnes grading 1.59 g/t gold for 7.8-million ounces.

SULPHIDE FUTURE

Antal noted that, since taking the reins at ASX- and TSX-listed Alacer a year ago, he had wanted to reset the business and had succeeded in doing so.

“One of the major milestones this year was that we confirmed that pressure oxidation is the preferred method to process Çöpler’s sulphide ore. We also completed the definitive feasibility study (DFS) and initial heap-leach trials showed that there could be a significant increase in this mining phase’s capacity,” he said.

Alacer had completed extensive technical, design, engineering and procurement studies in preparing the DFS and would be carrying out basic engineering and further optimisation studies, as well as completing the permitting process, before making a construction decision during the first quarter of next year. As of June 30, Alacer had 2.4-million tonnes grading 4.7 g/t stockpiled and expected that number to rise to about 9-million tonnes by the time Çöpler started processing the sulfides at the end of 2017.

Antal noted that between 2014 and 2034, Çöpler was expected to produce about 3.2-million ounces of gold, with sulphide ore to provide 79% of the output over the mine’s life.

Total preproduction capital was estimated at $660-million.

Alacer expected Çöpler’s sulphide circuit to be in commercial production from 2017/18. The company had, in April, submitted a supplemental environmental-impact assessment (EIA) and, Antal noted, with peer gold miner Alamos Gold having received the final signatures approving the EIA for its Agi Dagi gold project last month, the Turkish authorities seemed to be moving at a reasonable pace in processing the approvals, which boded well for permitting.

Alacer early this year announced that it expected to produce 160 000 oz to 180 000 oz of gold at all-in costs of $730/oz to $780/oz this year.

“Çöpler, combined with Alacer’s other organic growth potential, provides the basis to become a low-cost multimine producer in Turkey,” he said.