Frontier Pacific to buy Ovacik

Vancouver — Frontier Pacific Mining (FRP-V) is acquiring the Ovacik gold mine in western Turkey from Autin Investments, a subsidiary of Newmont Mining (NEM-N).

The company will pay US$30 million for the mine plus deferred contingent payments totalling up to US$14 million.

The mine, Turkey’s first — and now largest — modern gold producer, is near the Aegean Sea and has both an open pit and underground workings. In 2003, Ovacik produced 173,000 oz. gold from 484,000 tonnes grading 11.8 grams gold per tonne.

Ovacik began producing in July 2001 under the joint ownership of Newmont and Normandy Mining. (Normandy was acquired by Newmont in 2002.)

Open-pit proven and probable reserves are pegged at 561,000 tonnes grading 13.3 grams gold (239,000 contained ounces), whereas underground inferred reserves stand at 655,000 tonnes grading 12.5 grams gold (263,000 contained ounces).

Gold mineralization at Ovacik is hosted in epithermal quartz and breccia veins with several bonanza-grade oreshoots contained in the deposit. A surrounding 250-sq.-km land package, included in the acquisition, has exploration potential.

The mine, which employs more than 460 people, uses a unique cyanide destruction system for processing solutions. The system has minimal environmental impact, owing to zero discharge of waste water and a sealed tailings pond.

Frontier Pacific has initiated debt and equity financing for the acquisition.

The company also has the advanced-stage Perama Hill gold project (another acquisition from Newmont), situated in northeastern Greece, about 200 km from Ovacik. Other gold projects in Frontier’s portfolio are San Javier in Bolivia and Dixie Creek in Nevada.