The Kirazlı development project is located in the Çanakkale Province of northwestern Turkey and is an epithermal, highsulphidation, disseminated gold system.
A Feasibility Study was completed in early 2017 and evaluated an open-pit operation that would process 15,000 tpd through primary crushing and open circuit secondary crushing followed by heap leaching methods to extract the gold and silver. Average annual production is estimated to be 104,000 ounces of gold and 617,300 ounces of silver over a five year mine life, underpinned by a Proven and Probable Mineral Reserve of 26.1 Mt of 0.8 g/t gold and 12.0 g/t silver (as at Dec. 31, 2016).
Federal government approval has been received for the Environmental Impact Assessment and Forestry Permits and Alamos also received the GSM permit required for the development of Kirazli. The GSM permit is the final material permit required prior to starting construction. Alamos expects a 24 month development timeline for Kirazlı, including approximately three months of pre-commercial production.
Within 60 days of the commencement of commercial production at Kirazlı, Sandstorm will receive a production bonus of $2.5 million. The bonus is payable by Newmont Mining who assumed the obligation when they acquired Fronteer Gold in 2011. Sandstorm acquired the bonus payment as part of the Teck royalty package in January 2016.
Alamos was granted the GSM (Business Opening and Operation) permit required for the development of the Kirazli project and will be mobilizing for full scale construction activities in the third quarter. The initial capital estimate is $152 million of which $50 to $60 million is expected to be spent in 2018, inclusive of $10 million spent through the first half of 2018. Alamos expects initial production from Kirazli in the second half of 2020.