Discovered in a roadside outcrop (Fig. 1) by Stratex Madencilik General Manager Bahri Yildiz, the Inlice project is located 30 kilometres west-south-west of the city of Konya and 230 kilometres south of Ankara. High-sulphidation gold mineralization occurs in steeply dipping silica replacement "ledges" of the Ana Zones (Figs.1-5), which cross-cut the andesitic volcanic host rock.
Figure 1. Quickbird image of the Inlice prospect.
Figure 2. Silica zone near west end of Ana East - outcrop approx. 4 m high. Average gold content c.8 g/t.
Stratex's private Turkish partner company NTF, which is managing the project through its 55% shareholding in NS Madencilik (the balance of 45% held by Stratex), a joint-venture company it co-owns with Stratex Madencilik, has funded a feasibility study on the Inlice project, which was undertaken by leading Nevada-based engineering and metallurgical consultancy Kappes, Cassiday & Associates. Using a cut-off grade of 0.3 g/t Au, the feasibility study reported total proven mineral reserves of 629,000 tonnes of in-situ oxide material averaging 2.36 g/t Au plus 466,000 tonnes of talus material averaging 0.79 g/t Au, for a total gold reserve of 59,600 oz Au. The average stripping ratio for the total mine life is 0.76.
Additional resources of oxide and transition material (containing partially oxidised sulphide material) have been identified and are likely to be mined at a profit. Higher production from the talus material can also be anticipated given that it is not possible to mine this mix of eroded rock and soil to a specific cut-off value. A significant sulphide resource will be exposed during the mining of the oxide material and KCA recommends that exploitation of this material be evaluated further following an initial sulphide resource estimate by ACA Howe in 2008, which identified 164,000 oz Au @ 1.78 g/t Au (Table. 1; see press release dated 4 July 2008). For this reason the leach pad has been designed with an initial capacity of 1.1 million tonnes but this can be expanded to contain up to 3 million tonnes.
Figure 3. Inlice: geology and drill hole locations. Gold-bearing silica ledges shown in red.
The overall recovery from treating a combination of oxide and transition material is expected to be 85% of the contained gold, and 80.5% of the talus gold, all of which will be recovered on site as impure bars (95% gold).
Total cash operating costs per ounce of gold is projected to be US$412, with a state royalty of 4%, and capital expenditure on construction is projected to be US$13.85 million. Using a baseline conservative gold price of US$1,100, the project economics are positive with an after-tax IRR of 22.9% and NPV(10) of US$4.0 million, increasing to 31.8% and US$6.9 million at a gold price of $1,200. However, NS Madencilik proposes to use shareholder NTF's mining fleet on a contract basis at the identified working costs, leading to improved project economics that are particularly robust:
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Gold @ US$1,100/oz - IRR 36.9% |
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NPV(5) - US$8.8 M |
NPV(10) - US$6.3 M |
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Gold @ US$1,200/oz - IRR 47.9% |
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NPV(5) - US$12.2 M |
NPV(10) - US$9.1 M |
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Gold @ US$1,400/oz - IRR 68.5% |
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NPV(5) - US$18.8 M |
NPV(10) - US$14.6 M |
Other options are currently being investigated to evaluate ways of further enhancing the project economics, including consideration of increasing the effective capacity of the operation from one to two or possibly even three shifts per day.
Figure 4. Summary cross-section of drill holes INDD-18 and
INDD-37, Ana West.
Figure 5. Summary cross-section of drill holes INDD 1, 9, 23 and 26, Ana East .
NTF has now appointed GBM Minerals Engineering Consultants Ltd as Owner's Engineer to support construction through to gold production. GBM personnel have commenced reviewing the previously completed feasibility study and associated Conceptual Design, with the initial priority task of considering the mine development plan and project economics. Inlice Madencilik, the operating company for NS Madencilik at Inlice, has advised that comment on the Environmental Impact Study ('EIS') from the Government's Environmental Ministry is now expected in January and this will result in a delay to the permitting and construction process, with first production now unlikely before end-2012 at the earliest. Revised timelines will be provided following completion of the review by GBM.
In the meantime Inlice Madencilik has appointed an agent to complete the permitting procedures as soon as the EIS has been approved. Extensive planning by Inlice Madencilik personnel in conjunction with local landowners in the Inlice area has already been undertaken and should ensure that the permitting is completed rapidly. A conducted visit for a number of Inlice villagers to a major operating heap-leach gold mine has reinforced the positive attitude of the local stakeholders towards the Inlice project.
Inlice Madencilik has also secured approval for an electricity sub-station immediately adjacent to the mine site, allowing for substantial cost savings on the original proposal to construct a power line between the site and a sub-station at Inlice village, a distance of 6 km.
Inlice Madencilik also continues to investigate options for securing debt financing within Turkey and discussions are underway with a number of financial institutions.
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