Alacer Gold Corp. [ASR-TSX, AQG-ASX] shares rallied Thursday after the company announced that commercial production has been achieved at the sulfide plant at its Copler Gold Mine in central Turkey.
Alacer is a low-cost gold producer holding an 80% interest in the Copler Gold Mine, which is operated by Anagold Madencilik Sanayi ve Ticaret A.S., a unit of Alacer. The remaining 20% is owned by Lidya Madencilik Sanayi ve Ticaret A.S. The mine is located approximately 1,100 kilometres southeast of Istanbul.
Since 2010, the Copler Gold Mine has been processing oxide ore via a heap leach operation. It produced 170,865 ounces of gold in 2018. However, the oxide ore is progressively being exhausted and the mine started processing sulfide ore in November, 2018 using pressure oxidation.
In May, 2016, construction commenced on the Copler Sulfide Expansion Project. Now that it is in operation, it serves as a springboard for Alacer’s next phase of growth.
In declaring commercial production, Alacer evaluated several measures including throughput, gold recovery rate, production, costs and overall sulfide plant reliability. During May, 2019, the sulfide plant operated at design for the sulfide sulfur processed and averaged a throughput rate of over 80%.
Gold recovery was 93%, plant utilization was 85%, and over 22,000 ounces of gold were recovered with processing costs in line with expectations.
In addition to the solid sulphide plant update, Copler oxide plant guidance range has been increased to 125,000 to 145,000 ounces from 90,000 to 110,000 ounces due to continued strong performance from the oxide plant.
The increase to the oxide production guidance is as a result of stacking ore from the ongoing in-pit exploration success, higher than expected recoveries from the blended ore, and positive reconciliation for the oxide ore. Oxide all-in-sustaining cost guidance is forecast to decline by US$50 to US$650 per ounce from US$700.
Including non-commercial sulphide production for the first five months of the year, and also assuming the high end of oxide production guidance at 145,000 ounces, Scotiabank analysts are estimating that Alacer’s new 2019 estimated total production guidance would be in the 400,000 ounce to 415,000 ounce range. That compares to the previous total of between 320,000 ounces and 380,000 ounces.
Alacer shares rallied on the news, rising 12% or 44.5 cents to $4.16 on volume of over 1.1 million. The shares are trading in a 52-week range of $1.97 and $4.19.
Alacer recently announced a maiden mineral resource estimate for the Ardich oxide gold deposit, which is located approximately six kilometres northeast of its Copler Gold Mine in east central Turkey.
The total measured and indicated resource at the Ardich oxide deposit stands at 294,000 ounces of gold (6.9 million tonnes at 1.32 g/t gold). On top of that is an inferred resource of 85,000 ounces gold (2.2 million tonnes at 1.2 g/t gold).
The Ardich gold property is a listwanite-dolomite-hosted gold replacement deposit with mineralization occurring along thrust zones between listwanite, ophiolites, hornfels and limestones. The mineralization is predominantly oxide with sulfide mineralization confined to limited pyrite rich jasperoid bodies.
Opportunities exist to process Ardich oxide ores at the existing and expanded Copler oxide plant facilities or to construct standalone processing facilities at Ardich, the company said.
A feasibility study will be completed in 2019 for a 20 million tonne incremental expansion of the Copler heap leach pad.
In addition, options for standalone facilities and heap leach pad facilities of varying size (in excess of 50 million tonnes) are being explored should the Ardich deposit grow to the full extent of the two kilometre mineralized target.