Ilic, Turkey — It’s the Tom Prices, Escondidas and Grasbergs of tomorrow that
Rio Tinto has spent about US$5 million exploring the Copler project in a joint-venture alliance with Anatolia, a Denver, Colo.-based junior led by geologist Richard Moores. In March 2003, Watts Griffis & McOuat (WGM) estimated that the Copler prospect contains, in three zones, an inferred resource of 44 million tonnes grading 2.9 grams gold per tonne. Anatolia retained WGM to provide the estimate, which was based on 34 of 80 holes drilled to November 2002. More than 20 holes, with multiple intercepts of plus 1 gram gold per tonne material, were excluded as they were too widely spaced to be meaningful. Results of an additional 29 holes drilled in 2003 have not yet been incorporated.
“Rio Tinto is looking for major deposits,” Firuz Alizade, Anatolia’s vice-president of exploration, told The Northern Miner during a site visit in the fall. “They like to poke holes 300 to 500 metres apart.” Copler has been drilled anywhere from a minimum 100-metre spacing to a maximum of 200-300 metres.
In a separate transaction, Anatolia has also bought out its Turkish partner, the original licence-holder, to now own 100% of Copler, free of any royalties, earn-in rights or back-in rights. Unimangan Manganez, the former Turkish partner, has received US$2 million cash plus a preferred share redeemable before 90 days for US$2 million cash, after which it converts to US$2.25 million worth of common shares in Anatolia.
“We are now in a position to accelerate development,” said Moores, who is Anatolia’s president. “Our plan is to confirm the direct leachable resource, bringing it up to reserve status. We should be able to accomplish this by late summer or early fall of this year. At the same, we will advance the engineering based on the Rio’s conceptual study and begin environmental work to fast-track development for a potential high-grade, open-pit operation.”
Rio Tinto is just finishing off the financials of a comprehensive scoping study of Copler, which Moores says are positive. He expects to have the completed study in hand in the next week or so. The study will include a new resource estimate by SRK Consulting, as well as in-house estimate by Rio, which looked at the resource model a little differently.
Moores envisions a carbon-in-leach (CIL) agitation processing plant producing somewhere around 150,000-200,000 oz. per year at “very competitive cash costs, especially on the oxides.”
Metallurgical studies indicate that 11 million tonnes grading 5.4 grams, equivalent to 1.9 million oz., is directly leachable, with a recovery exceeding 90%. It’s mostly oxide, but there are some sulphides that are very leachable, with 80-90% recovery, said Moores.
The remaining 2.2 million oz., or 30 million tonnes at 2.4 grams, is refractory in nature. Simple flotation can recover 80% of the sulphide gold in a 10-to-12-gram-per-tonne concentrate from which bioleaching recovers 92% of the contained gold. Metallurgical studies have been based on composite drill core samples of both oxidized and sulphide mineralization from the Main Porphyry, Marble Cover and Manganese Mines zones.
“Work on the sulphide resources will focus on how to integrate them into the development plan,” said Moores. “We expect to put this project into production in a few short years.”
Anatolia has 35.3 million shares outstanding, or 42.9 million on a fully diluted basis, and trades at around US$1.35 in a 52-week range of US$1.54-58. The company has about US$1 million in cash, with plans to raise upwards of another US$5 million at current prices.
With a seasoned, in-country exploration crew, Anatolia has focused exclusively on Turkey since its inception in 1996. “We’re here because that’s where the elephants are,” said Moores. “We have generated more untested copper-gold porphyry prospects than anywhere I have ever seen. “[The country] has been mined, but it’s terribly underexplored. With the type of deposits that are outcropping and ready to be explored, it’s like stepping back to the American southwest 150 years ago.”
Turkey is in the Alpine orogenic belt, where the Euroasian, Arabian and African continental plates collide, with subduction zones on both the north and south sides of the country. The area has undergone repeated episodes of orogeny, volcanism and island-arc formation, leading to extensive mineralization throughout the country. “It’s an extremely rich environment for major ore deposits,” said Moores. “It’s a complex geology that has gone through multiple periods of orogenesis.”
Today, through its wholly owned Turkish subsidiary, Anatolia controls upwards of a dozen project areas covering roughly 15,000 sq. km throughout the country.
Alliance
Rio Tinto entered into a 4-year agreement with Anatolia in April 2000 to search for base and precious metal deposits in Turkey. “We will work with partners when the partner can bring something to the relationship that we cannot provide ourselves,” said David Klingner, Rio’s head of exploration, during a talk at a recent investment seminar. “This could be access to a specific opportunity or local expertise of a geological or geographical nature. Both these factors were involved in the development of an alliance in Turkey with Anatolia. Working with a partner also gives us the means to divest any of the smaller discoveries we make while looking for the large, long-life orebodies.”
Anatolia and Rio Tinto recently agreed to a 4-year extension of their agreement, according to which Rio will provide US$500,000 per year for project generation and grassroots exploration, as well as US$216,000 annually to offset Anatolia’s office expenses, in exchange for a right of first refusal on a particular property. Any mineral properties not chosen or dropped by Rio Tinto may be offered to other third parties.
Should Rio elect to earn an interest (of 66.7%) in a designated property, it must spend at least US$10 million, generate an order-of-magnitude study, and pay Anatolia US$1.5 million over six years. The earn-in agreement stipulates that Rio must spend at least US$300,000 in the first year and at least US$500,000 in each of years two through six. Anatolia manages all the grassroots campaigns, as well as the first US$3 million spent by Rio on an earn-in property. A jointly governed technical committee approves all expenditures.
Fast track
To date, Rio Tinto has spent almost US$12 million on the Anatolia joint venture. “Together, we have made one discovery so far at Copler and have title to some of the least-explored porphyry copper terrain available,” said Rio’s Klingner. “We have been able to get into Turkey to fast-track the program to the specific prospect-testing stage through our alliance with Anatolia and their experienced Turkish exploration crew.” A lot of Anatolia’s Turkish geologists are ex-Cominco.
“We do not focus too much on pure gold opportunities as there are few gold opportunities in the world large enough to have an impact on Rio Tinto,” Klingner continued. “When we come across a particular good gold opportunity, we do, of course, follow it up.”
Rio Tinto is currently earning-in on three Anatolia prospects. The first is the district-size Tunceli in east-central Turkey, some 550 km southeast of Ankara. The joint venture has outlined at least five widespread copper-gold porphyry targets, including Kizilviran, in a Tertiary island arc volcanic belt intruded by mineralizing diorites. The Kizilviran prospect is exposed along a ridge top as a leached, phyllic altered cap, with widespread anomalous copper and gold mineralization, over a 2-by-1-km area. Samples from the leached cap carry 0.01-0.1% copper, up to 0.05% molybdenum and an average of 0.2 gram gold per tonne. The base of the ridge returned values of up to 3.7% copper, 1 gram gold and 0.04% molybdenum from chalcocite zones exposed by spring runoff.
The joint venture tested Kizilviran with a single hole last summer and intersected 594 metres averaging 0.4% copper, 0.14 gram gold and 60 parts per million (ppm) molybdenum. Said Klingner: “We were able to drill only one hole into the Kizilviran prospect before the field season ended, but the intersection, while uneconomic, gave us considerable encouragement.”
Rio Tinto also chose to advance the Kirinti gold prospect in the north-central part of the country, near the town of Gumushane. Soil sampling had outlined a promising 1,000-by-600-metre gold anomaly overlying a geophysical target. Kirinti was drilled in late 2003, and Anatolia is just now receiving the drilling results. “It may not be big enough for Rio,” warned Moores.
The third prospect Rio has optioned from Anatolia is called the Western Turkey porphyry copper-gold target, and Moores said “it may be another Tunceli.”
Copler
The Copler project covers 9.5 sq. km of a valley in the Divrigi-Tunceli porphyry belt; part of the Taurid tectonic belt, which arcs across southern Turkey and consists of folded, faulted and mineralized mountain chains that have been historically mined for more than 9,000 years. The property is near Ilic, a town of about 2,500 people, some 500 km east-southeast of Ankara and 5 km east of the Euphrates River. Infrastructure is good to excellent, with access by paved highway or rail to within 5 km of the property. Power, labour and water are readily available. “Where else can you go with the infrastructure knocking at the door?” asked Anatolia’s Alizade.
It may be too good. The small village of Copler, which consists of about 200 people in 30 homes, is in the licence area. It was evident during The Northern Miner’s site visit that some of Rio Tinto’s drilling pads on the Main Porphyry zone are serving as the foundations for newly constructed houses. The main activity in the area is sheep herding, with some wheat farming along the Euphrates River.
Copler is a classic mineralized porphyry-skarn system. The property covers altered porphyritic intrusions and limestone skarns that host structurally controlled and stockwork oxide and sulphide gold-copper mineralization. The immediate area is underlain by metasediments (limestones) and carbonate (marbles) that have been intruded by multi-phase porphyritic bodies of diverse composition. Copler is capped by massive and folded limestone units of the Manzur formation.
Gold-copper mineralization is found in stockworked porphyry units, limestone skarns and metasediments, along a corridor cut by two northeast-southwest-striking structures. “In this corridor, everything is mineralized,” said Ilhan Poyraz, Anatolia’s project geologist. “There is nothing dead here.” High-resolution satellite imagery shows a highly altered and discoloured area more than 4 km in diameter.
Three styles
Three important styles of mineralization are present: a dominant gold-copper porphyry style, brecciated jasperoids, and outlying skarn or replacement bodies. The mineralization is mostly disseminated sulphides, consisting primarily of pyrite and chalcopyrite, with minor bornite, and sulphides in stockwork quartz veinlets. Gold occurs as finely disseminated grains primarily associated with arsenopyrite and pyrite. About 15-20% occurs as free gold.
Anatolia was first drawn to the Copler area in 1998. The area is littered with hundreds of ancient workings and slag heaps that go back several thousand years. The workings are generally not any deeper than 40-50 metres. A driller recently found a 300-to-400-year-old coin at one of the workings.
Based on the results of initial sampling, Anatolia took a year and a half to come to terms with the original licence-holder, which operated a manganese mine there from 1979 to 1992. In September 2000, Anatolia entered into a joint-venture agreement on the property with Rio Tinto, based on the results of earlier sampling.
A joint Anatolia-Rio Tinto field crew had conducted two subparallel sampling traverses, about 400 metres apart, across the main part of the exposed Main Porphyry zone. The “upper traverse” averaged 1.17 grams gold and 0.17% copper across 197 metres of continuous 5-metre channel sampling. The “lower traverse” averaged 1.44 grams gold and 0.08% copper for 637 metres, including 125 metres grading 3.1 grams gold. More than 2,000 surface chip samples have been collected, most of which are anomalous in gold. About 10% of the samples assayed greater than 1 gram gold, with 30 samples exceeding 5 grams.
The first hole was drilled into the Main Porphyry zone in November 2000; it intersected 80 metres of 1.61 grams right from surface. The first pass consisted of six widely spaced core holes drilled at 300-metre spacing. Five of the holes yielded an average of 60 metres grading 2.3 grams gold, 9 grams silver and 0.1% copper.
RC, core drilling
The joint venture has since completed 16,243 metres of drilling in 109 holes, using both reverse-circulation and core methods. Drilling has defined an inferred resource in three zones within a 2-sq.-km area (roughly 2.5 km long by 800 metres wide).
The Main Porphyry zone has received the most drilling to date, and contains more than half of the resource. WGM estimates that the Main Porphyry zone contains 33 million tonnes grading 2.1 grams, equivalent to 2.3 million oz. The oxide does not extend more than 25 metres deep in the Main zone, according to Poyraz. The Marble Cover area contains a much higher-grade 4 million tonnes of 7.7 grams, equivalent to 1 million oz. It consists primarily of oxidized contact mineralization, and it’s almost all directly leachable, said Moores.
The Manganese Mine zone hosts 7 million tonnes grading 4.1 grams, or 900,000 contained ounces. Oxide mineralization extends as deep as 200 metres. There is some sulphide material in both the Manganese Mine and Marble Cover zones, and this material is leachable.
The three zones identified are still only partially defined; they are open along strike and to depth.
Outside of the 9.5-sq.-km Copler area, Anatolia holds 249 sq. km of surrounding ground. In 2002, about 5,400 line km of regional helicopter geophysical surveys were flown at 250-metre spacings. Several magnetic anomalies were identified, four of which fall into the surrounding Copler footprint area and await follow-up investigation.
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