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Kirazli

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Ağı Dağı

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Çamyurt

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Kirazlı is one of the lowest cost undeveloped gold projects in the world. The project has been designed and will be constructed to the same high-level environmental and social standards as our operations in Canada and Mexico. We are committed to working with all parties to ensure Kirazlı is developed in a responsible manner that benefits all our stakeholders.

Kirazli Factsheet

Feasibility Study Highlights - 2017

Average Annual Production

oz Au (thousands)

104

Total cash cost1

US$/oz

$339

Mine-Site All-in Sustaining Costs1

US$/oz

$373

1 Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures.

Mineral Reserves and Resources

as of December 31, 20192

Proven and Probable Mineral
Reserves

000 oz Au

752

Measured and Indicated Mineral
Resources

000 oz Au

42

Inferred
Mineral Resources

000 oz Au

152

2 M&I Mineral Resources exclusive of Mineral Reserves. Please see 2019 year end Mineral Reserves and Resources statement for additional detail.

Turkish Development Projects Map Larger

Kirazlı is located in the Çanakkale Province in the Biga Peninsula of northwestern Turkey, approximately 800 kilometres west of Ankara, Turkey’s capital. We maintain an administrative office in Ankara and exploration offices in the towns of Etili and Sogutalan in the Biga District. These offices support our activities at Kirazlı, as well as our Ağı Dağı and Camyurt projects which are located approximately 25 kilometres away.

The Kirazlı property consists of 1,541 hectares of mineral tenure in two contiguous licenses. Mineral rights for all concessions comprising the Turkish assets are controlled by Doğu Biga, a Turkish subsidiary of the Company. As all projects are located in a forestry reserve, surface rights are controlled by the State government of Çanakkale.

Kirazlı is a low-cost, high-return, fully funded growth project. Positive feasibility studies were completed on Ağı Dağı and Kirazlı in 2017 with both projects contemplated as stand-alone open-pit, heap-leach operations. Alamos expects to first develop Kirazlı and then utilize its cash flows to fund the development of Ağı Dağı. As outlined in the feasibility study, Kirazlı is expected to produce an average of 104,000 oz of gold at mine-site all-in sustaining costs1 of $373 per ounce over a five year mine life.

In conjunction with the Ministry of Forestry and Water Affairs – State Hydraulic Works (DSI), a water reservoir was constructed by Alamos and completed in 2019. In addition to supplying the process water requirements of the Kirazlı mine, the water reservoir will supply clean drinking water and irrigation to several nearby communities – a key element of Alamos Gold’s commitment to its host communities and our sustainability and social responsibility objectives. In addition, power will be supplied from the commercial electricity grid with a new dedicated 30-kilometre-long overhead line connecting the Çanakkale utility substation to the Kirazlı mine substation.

In October 2019, Alamos suspended all construction activities on the Kirazlı project pending the renewal of our Turkish mining concessions. We are working with the Turkish Department of Energy and Natural Resources on securing the renewal of the mining concessions which will allow for a resumption of construction activities.

Alamos has been working with the various government ministries and local communities since 2010, as part of a multi-year environmental review and community consultation process. After earning the support of local communities and passing a rigorous environmental review process, Alamos was granted government approval of all the major permits needed to build Kirazlı including the Environmental Impact Assessment, Forestry Permits, Business Opening (GSM) and Operating Permits.

Alamos remains committed to developing Kirazlı to the same high-level environmental and social standards as our operations in Canada and Mexico. This includes reforesting all 354 acres of cleared land and continuing to invest in our local communities with $25 million having been already spent on sustainability initiatives. Additionally, our projects in Turkey are expected to create more than 2,000 local and national jobs, between direct and indirect employment, and to generate over $500 million in government revenue.

Alamos acquired the Ağı Dağı and Kirazlı advanced-stage development projects in 2010, from Teck Resources and Fronteer Development Group for total consideration of $90 million. That same year, positive preliminary economic assessment technical reports were published on both projects, followed by positive pre-feasibilities studies in 2012. Updated positive feasibility studies were completed on both projects in 2017.

The Kirazlı deposit is located in the Biga peninsula within the northern sector of the Aegean Horst and Graben System and between major structural zones. The local geology includes pre-Triassic metamorphic and ultramafic volcanic rocks and the basal section of the Triassic Krakaya sequence. These rocks have been intruded by Oligo-Miocene granite to granodiorite and overlain by Oligo-Miocene volcanic rocks ranging in composition from andesite to basalt. Phreatic and phreatomagmatic breccias that were emplaced as mushroom-shaped pipes cut the sequence. They are the result of intense structural and volcanic activity, and can be described as polymictic, matrix-supported breccias with moderately angular to well-rounded clasts of varying size and composition.

Four phases of silicification have been identified at Kirazli including grey massive and vuggy silica, chalcedonic to opaline silica (interpreted as the silica cap), grey quartz with a high pyrite content and crystalline silica that infills fractures. Argillic alteration with a younger overprinting core of advanced argillic alteration underlies the massive grey silica and the later chalcedonic silica cap rocks. The advanced argillic alteration sits immediately below the silica cap and around its sub-vertical silica roots and is surrounded by widespread argillic alteration.

The Kirazlı deposit is an epithermal, high-sulphidation, disseminated gold system. Gold mineralization is hosted within the heterolithic phreatomagmatic/phreatic breccia bodies that cut through the Oligo-Miocene-age andesitic tuffs. Mineralization can generally be subdivided into two main types: first, a regional low-grade gold zone underlying much of Kirazlı Dağı and broadly enveloping the high-grade gold zones. This low-grade mineralization occurs both above and below the zone of supergene oxidation (redox boundary). Second, four elongate bodies of high-grade gold mineralization that occur in the uppermost argillic/advanced argillic zone and slightly overlapping the bottom of the silica cap. The high-grade mineralization trends north south and shows a strong spatial relationship with the margins of heterolithic breccia bodies.

Kirazlı will employ open pit mining methods with a conventional drill, blast, load and haul sequence used to deliver ore to the crushing circuit. Waste rock will be used as engineered fill for the leach pad foundation during the early years, after which it will be sent to the waste rock dump and be used to backfill portions of the pit.

Kirazlı has been designed as a 15,000 tpd heap leach operation utilizing a multiple lift, single use leach pad. Ore will undergo primary and secondary crushing, agglomeration, and then be stacked on the leach pad by conveyor stacking. Conventional heap leaching methods will be used for processing, with a dilute cyanide solution applied to the crushed ore over a 90-day leaching cycle. Cyanide is only used in the processing stage to separate gold from the extracted ore. Processing is carried out within a closed circuit, in dedicated, protected and impermeable containment facilities under the principle of zero discharge, meaning no cyanide is allowed out of the circuit and into the surrounding environment.

The pregnant solution will be collected and processed through the adsorption-desorption-recovery (ADR) plant where gold and silver doré bars will be produced. Gold and silver recoveries are expected to average 81% and 31%, respectively. 

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Ağı Dağı represents our next phase of low-cost, high-return growth in Turkey. It will be developed after the Kirazlı project and funded through Kirazlı’s cash flows.

Feasibility Study Highlights - 2017

Average Annual Production

oz Au (thousands)

178

Total cash cost1

US$/oz

$374

Mine-Site All-in Sustaining Costs1

US$/oz

$411

1 Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures.

Mineral Reserves and Resources

as of December 31, 20192

Proven and Probable Mineral
Reserves

000 oz Au

1,166

Measured and Indicated
Mineral Resources

000 oz Au

518

Inferred
Mineral Resources

000 oz Au

245

2 M&I Mineral Resources exclusive of Mineral Reserves. Please see 2019 year end Mineral Reserves and Resources statement for additional detail.

Turkish Development Projects Map Larger

Ağı Dağı is located approximately 50 kilometres southeast of Çanakkale in the Biga Peninsula of northwestern Turkey, some 800 kilometres west of Ankara, Turkey’s capital. We maintain an administrative office in Ankara and exploration offices in the towns of Etili and Sogutalan in the Biga District. These offices support our activities for Ağı Dağı and the nearby Kirazlı and Camyurt Projects.

Ağı Dağı project represents another low-cost, high-return, growth project for Alamos. Positive feasibility studies were completed on Ağı Dağı and Kirazlı in 2017 with both projects contemplated as stand-alone open-pit, heap-leach operations.

Ağı Dağı is expected to produce an average of 177,600 oz of gold at mine-site all-in sustaining costs1 of $411/oz over a six year mine life. Mineralized material from the nearby Çamyurt deposit is expected to be trucked and processed at Ağı Dağı after it has been depleted, resulting in a combined mine life of nearly 10 years between the two projects.

Alamos expects to first develop Kirazlı and then utilize its cash flows to fund development of Ağı Dağı. Following a construction decision, we anticipate a 36-month development timeline for building Ağı Dağı. As with Kirazlı, a water reservoir will be constructed to supply the process water requirements of the Ağı Dağı project and clean drinking water and irrigation for the nearby communities – a key element of Alamos Gold’s commitment to its host communities and our sustainability and social responsibility objectives.

Local infrastructure is excellent and well-serviced with paved roads, electricity, transmission lines, and electricity generating facilities, the most significant being a large power plant adjacent to the nearby Town of Çan.

The Aği Daği property consists of a total of 10,514 hectares of mineral tenure in 15 contiguous operation and exploration licenses and includes the Çamyurt Project. As all projects are located in a forestry reserve, surface rights are controlled by the State government of Çanakkale. Production from Ağı Dağı and Çamyurt will be subject to a 2% net smelter return (“NSR”) royalty payable to Franco-Nevada Corporation.

Alamos acquired the Ağı Dağı and Kirazlı advanced-stage development projects in 2010, from Teck Resources and Fronteer Development Group for total consideration of $90 million. That same year, positive preliminary economic assessment technical reports were published on both projects, followed by positive pre-feasibilities studies in 2012. Updated positive feasibility studies were completed on both projects in 2017.

The Aği Daği deposit is an epithermal, high-sulphidation, disseminated gold system where gold mineralization is hosted within Miocene-age rocks. The Oligo-Miocene volcanics mainly consist of andesite porphyry, porphyritic andesites and dacite-rhyolite flows and tuffs. There are five main zones of gold mineralization present at Ağı Dağı. The Baba, Fire Tower and Deli zones occur within the interpreted southeastern basin and the Ayi Tepe and Ihlamur mineralized zones occur in the interpreted northwestern basin. Hydrothermal alteration at Ağı Dağı covers an area in excess of 25 kilometres² and exhibits many of the alteration facies that typically relate to high-sulphidation, epithermal gold deposits. Silicification with vuggy and massive silica is the most prominent alteration type surrounded by several facies of advanced argillic then argillic alteration.

Gold mineralization is associated with a northeast trending silica cap rock about four kilometres by two kilometres in extent which forms a topographic high 700 to 900 metres in relief. The gold mineralization is disseminated and is associated with intense silicic alteration comprised of both massive and vuggy silica. Host rocks include volcanic felsic to intermediate tuffs and flows and phreatic breccias. Pyrite is the most abundant primary sulfide mineral associated with gold in the sulphide rocks. Trace to minor amounts of enargite, covellite, galena, and molybdenum are present locally. Gold mineralization appears to be continuous from Baba through Fire Tower zone and into the Deli zone, which is a total distance of over 4 kilometres. Mineral Resources have been generated for the Baba and Deli zones of the Ağı Dağı deposit and have also been developed for the Fire Tower zone.

Ağı Dağı will employ open pit mining methods at its two deposits which form the Baba and Deli pits, located approximately 2.5 kilometres apart. A conventional drill, blast, load and haul sequence will be used to deliver ore to the crushing circuit. Waste produced over the life of the mine will be used as engineered fill for the leach pad foundation, trucked to the waste rock dump located directly north of the Deli pit or backfilled into the pits once the ultimate pit bottoms are achieved.

Ağı Dağı has been designed as a 30,000 tpd heap leach operation utilizing a multiple lift, single use leach pad. Ore will be processed through two primary crushers, one located near each pit. Crushed ore will be stacked on the leach pad by conveyor stacking and processed with conventional heap leaching methods. A dilute cyanide solution will be applied to the crushed ore over a 90-day leaching cycle. Cyanide is only used in the processing stage to separate gold from the extracted ore. Processing is carried out within a closed circuit, in dedicated, protected and impermeable containment facilities under the principle of zero discharge, meaning no cyanide is allowed out of the circuit and into the surrounding environment.

The pregnant solution will be collected and processed through the adsorption-desorption-recovery (ADR) plant where gold and silver doré bars will be produced. Gold and silver recoveries are expected to average 80% and 25%, respectively.

 

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Çamyurt is low cost, high-return project with minimal capital requirements given its location adjacent to our Aği Daği project.

Preliminary Economic Assessment Highlights - 2017

Average Annual Production

oz Au (thousands)

93

Total cash cost1

US$/oz

$604

Mine-Site All-in Sustaining Costs1

US$/oz

$645

1 Please refer to Cautionary Notes on non-GAAP Measures and Additional GAAP Measures.

Mineral Reserves and Resources

as of December 31, 20192

Measured and Indicated Mineral
Resources

000 oz Au

508

Inferred
Mineral Resources

000 oz Au

85

2 Please see 2019 year end Mineral Reserves and Resources statement for additional detail.

Turkish Development Projects Map Larger

The Çamyurt Project is located four kilometres southeast of our Ağı Dağı project, which is approximately 50 kilometres southeast of Çanakkale in the Biga Peninsula of northwestern Turkey.

Çamyurt is another low cost, high return growth opportunity. A preliminary economic assessment (“PEA”) was completed in 2017 on the basis that Çamyurt will have minimal standalone infrastructure, with mineralized material to be trucked to and processed at the nearby Aği Daği infrastructure. The PEA assumes mineralized material from Çamyurt will be sequenced after Aği Daği has been depleted, resulting in a combined mine life of nearly 10 years between the two projects.

Çamyurt is expected to produce an annual average of 93,200 ounces of gold at mine-site all-in sustaining costs1 of $645 per ounce over a four year mine life. The project’s after-tax internal rate of return is estimated to be 253%, reflecting minimal initial capital requirements of approximately $10 million.

As more detailed economic studies are completed on Çamyurt, we will assess opportunities to both accelerate the processing of the Çamyurt mineralized material before the end of the mine life at Ağı Dağı, as well as to build a standalone crushing circuit and leach pad facility at Çamyurt, which would reduce haulage and mining costs. Production from Çamyurt is subject to a 2% net smelter return royalty payable to Franco-Nevada Corporation.

Alamos acquired Çamyurt, along with the Ağı Dağı and Kirazlı projects, in 2010 from Teck Resources and Fronteer Development Group. A positive preliminary economic assessment was completed on the project in 2017 which contemplates conventional open pit mining methods and minimal standalone infrastructure requirements.

Drilling at Çamyurt has defined a mineralized zone that is continuous for at least 1,200 metres along strike, with additional potential to extend mineralization to the northeast and at depth. Gold mineralization is hosted within a tabular, steeply dipping oxidized zone starting at surface and with a cross-strike width up to 150 metres. The deposit has an average drill spacing of 55 metres along strike with a total of 59 core drill holes included in the Mineral Resource estimation.

Conventional open pit mining methods will be utilized at Çamyurt. It has been designed as a 15,000 tpd mining operation, with mineralized material trucked eight kilometres to the crushing circuit at Ağı Dağı for processing using conventional heap leaching methods. A dilute cyanide solution will be applied to the crushed mineralized material over a 90-day leaching cycle with the pregnant solution collected and processed through the ADR plant where gold and silver doré bars will be produced. Gold and silver recoveries are expected to average 76% and 48%, respectively.

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