Aldridge makes big strides at Yenipazar

VANCOUVER — Aldridge Minerals (AGM-V) is aiming to be the next Canadian explorer to take advantage of a mining boom in Turkey that has drawn substantial international investment, and positioned the country as Europe’s top gold producer.

Aldridge has been on a bit of a roll recently with upgraded metallurgy and an expanded resource estimate supplying fuel for market enthusiasm surrounding its polymetallic Yenipazar volcanic-massive-sulphide (VMS) deposit — 220 km southeast of Ankara.

The company’s preliminary economic assessment (PEA) in early 2011 was based entirely on reverse-circulation drilling and featured low metallurgical recoveries that carried questions regarding the viability of the deposits mineralization. Aldridge eliminated both problems in a single swoop, with 7,200 metres of diamond drilling boosting resource numbers and a potential upgraded processing circuit providing much more economic metal recoveries.

“As a result of our metallurgical advances gold is now the metal with the highest economic value,” commented president and CEO Mario Caron during a conference call. “When we published the PEA metallurgy was preliminary in nature, we were contemplating the production of a copper concentrate, as well as a lead-zinc concentrate, with only about a third of the gold reporting to the copper concentrate, and the majority of the silver reporting to the lead.”

Yenipazar’s upgraded resource holds 27 million tonnes grading 1.04 grams gold per tonne, 31 grams silver, 0.3% copper, 1.04% lead, and 1.4% zinc for a gold equivalent grade of 3.05 grams. The deposit contains 900,000 oz. gold, 27 million oz. silver, 177 lbs. copper, 612 million lbs. lead, and 824 million lbs. zinc.

“For this resource update we decided that it would be helpful to report the outcome in terms of gold equivalent ounces, and equivalent grades,” Caron explained. “The primary purpose of this decision is to facilitate the benchmarking of our deposit against other VMS projects. I should point out that reporting gold equivalents was made possible because of the significant progress we’ve made towards increasing gold recovers.”

Under the original processing model, Aldridge’s 5,700-tonnes-per-day processing plant would produce concentrates with recovery rates of 77% copper, 78% lead, 59% zinc, 37% gold, and 57% silver. Following additional study, the company was able to improve gold and silver processing significantly with new recoveries clocking in at 92% gold and 90% silver — base metal recoveries remain relatively unchanged.

“Our tests have identified a process that contemplates a separate gold circuit followed by sequential flotation of our base metals,” Caron said. “The ongoing optimization has led to the increase in precious recoveries. This supports our longstanding view that the low recovery rates in our original PEA were not a reflection of a fatal flaw in the deposit, but rather simply the result of a lack of metallurgical test work.”

Aldridge is banking on the upgrade in processing having a positive effect on Yenipazar’s economics, which currently carry a US$255 million net present value and a 23.2% internal rate of return at a 5% discount rate. The open-pit operation would have cost a relatively affordable US$198 million in initial capital.

As part of the upgraded processing facility Aldridge is planning on expanding its mill, bumping throughput levels by 32% to 7,500 tonnes per day, or roughly 2.5 million tonnes per year. According to Caron, the capital cost for the mill expansion is still up in the air, but will be incorporated into a bankable feasibility study slated for release by the end of the year. The company is aiming to complete a US$1.3-million, 10,000-metre diamond drill program by the end of July with the goal of further increasing precious metal grades found in previous reverse-circulation holes.

In addition to 1.7 km of strike found at its Yenzipar deposit, Aldridge has identified three new mineralized outcrops roughly 2 km north that are slated for further exploration. The company holds 100% of a 100-sq km mineral license it acquired via an earn-in agreement with Anatolia Minerals — now part of Alacer Gold (ASR-T).

According to Caron, Aldridge is fully funded through its feasibility stage courtesy of a US$11.2 million financing it completed with Turkish holding company ANT Holding Anonim in early February. The financing made ANT a 30% holder in Aldridge via the issuance of 16 million shares at 70¢ per unit, and holds key strategic advantages for the project going forward,

“Development funding will be addressed through a combination of debt and equity,” Caron explains. “We’re looking to canvas a few firms and will have more discussions at the board level when we meet again in mid-July. We expect our partnership with ANT, our newest major shareholder, will offer access to debt financing in the Turkish banking system that may not have been available otherwise.”

Aldridge remains tightly controlled following the placement, with 53 million shares outstanding — 36% under director or insider ownership — and a presstime market capitalization of US$35 million.

The company has enjoyed a buoyant market rally this past week, with shares jumping 52% or 23¢ since June 11. The release of Yenipazar’s upgraded resource continued to fuel investor enthusiasm as Aldridge jumped 22% or 12¢ en route to a 66¢ presstime close on high, 561,500-share trade volumes.