The Agi Dagi project is located in the Canakkale Province of northwestern Turkey and is an epithermal, high-sulphidation, disseminated gold system. Agi Dagi has been designed as a 30 ktpd open pit heap leach operation with a primary and secondary crushing circuit. Heap leaching will be applied to the crushed ore and then processed through an ADR plant where gold and silver doré will be produced. Annual production is expected to average 177,600 ounces of gold and 444,200 ounces of silver over five years, supported by a Proven and Probable Mineral Reserve of 54.4 million tonnes at 0.67 g/t gold and 5.41 g/t silver (as at Dec. 31, 2016).
Alamos received a positive decision on the Environmental Impact Assessment but also requires a land use permit, GSM permit and operation permit before mine construction can begin. Alamos’ current focus is on completing the permitting and development at the nearby Kirazli project and has plans to utilize cash flows from that operation to help fund the development of Agi Dagi.
The Kirazli project is an epithermal, high-sulphidation, disseminated gold system. A Feasibility Study was completed in early 2017 and evaluated an open-pit operation that would process 15,000 tonnes of ore per day 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 26.1Mt @ 0.79 g/t gold and 12 g/t silver (as at Dec. 31, 2016).
Federal government approval has been received for the Environmental Impact Assessment and Forestry Permits and in February 2017 Alamos applied for the GSM permit, the final remaining material permit required prior to starting construction. Following a construction decision, Alamos expects a 24 month development timeline for Kirazli, including approximately three months of pre-commercial production.
Within 60 days of the commencement of commercial production at Agi Dagi and Kirazli, Sandstorm will receive a production bonus of $6 million and $2.5 million respectively. The bonus is payable by Newmont Mining who assumed the obligation when they acquired Fronteer Gold in 2011. Sandstorm acquired the bonus payments as part of the Teck royalty package that was purchased in January 2016.