The Hod Maden project is located in northeastern Turkey within the Eastern Pontides metallogenic belt. Gold-copper mineralization in the Main Zone at Hod Maden is multi-stage and includes massive sulphide mineralization and breccia hosted mineralization. The project has a Mineral Reserve from May 2018 of 9.1 million tonnes at an average grade of 8.9 g/t gold and 1.4% copper for 2.6 million ounces of gold and 129,000 tonnes of copper in the Proven and Probable (2.6 g/t AuEq cut-off).
The Southern Zone was discovered in 2016 and is located approximately 300 metres south of the Main Zone. The Southern Zone gold-copper mineralization is hosted dominantly in dacitic volcanic rocks and breccias. Pyrite is the dominant sulphide phase with relatively minor chalcopyrite.
A Pre-Feasibility Study was released in 2018 and considered an underground mine with a processing rate of 900,000 tonnes per annum. The base case has a mine life of 11 years with average annual production of 266,000 ounces of AuEq per year at an average head grade of 11.9 g/t AuEq. The average recovery is expected to be 77% for gold and 94% for copper.
Upfront capital expenditure is estimated at $272 million and once the mine is up and running the all-in sustaining costs are estimated to be $374 per ounce on a co-product basis. The post-tax NPV, using a 5% discount rate, is $1.1 billion with an internal rate of return of 50%.
Lidya has been steadily advancing the project during 2020. A draft of the final Environmental Impact Assessment (“EIA”) is expected to be submitted in the fourth quarter of 2020 and a final EIA completed in the first quarter of 2021. Road upgrades are expected to begin in the fourth quarter of 2020. Due to COVID-19 related delays, the Feasibility Study is expected to be completed by the end of the first quarter of 2021, with first production projected for the fourth quarter of 2023.
A gap analysis and trade-off studies were completed and will contribute to the Feasibility Study work. In conjunction, an Environmental Impact Assessment has been submitted and a public participation meeting was successfully conducted as part of the permitting process.