Eldorado tests prospects in Turkey

A view of the site where Eldorado Gold will place waste rock from the proposed Kisladag open-pit mine in west-central Turkey.A view of the site where Eldorado Gold will place waste rock from the proposed Kisladag open-pit mine in west-central Turkey.

Preliminary drilling in the Biga Peninsula of western Turkey has returned mixed results for Eldorado Gold (ELD-T).

The reverse-circulation (RC) program focused on two showings: Keditasi and Yatiktas. Both were identified in previous surface exploration surveys.

At Keditasi, 748 metres were drilled in a northeast-trending ridge to test a high-sulphidation target 600 metres long by 150 metres wide. No significant results were obtained from the eastern end, but one of the three holes sunk in the western end intersected a flat-lying silica structure carrying 1.37 grams per tonne over 6 metres of a 16-metre intercept that averaged 0.73 gram.

Gold mineralization is associated with vuggy quartz and advanced argillic alteration. None of the RC holes penetrated the vuggy zone proper, so three core holes are planned for early 2004. The holes also will test mineralization to the north, beyond the surface anomaly.

The Yatikas showing is a 1,200-metre-long epithermal vein system formed at the contact of a basement schist and a granitic dyke. Eight holes were spaced along 700 metres of strike, with seven pulling up an average of 10 metres of vein material, as well as 2-15 metres of surrounding stockworks.

The best results were obtained from the footwall contact, where 4 metres of one hole averaged 7.3 grams. The continuity of mineralization along the contact will be the focus of subsequent drilling.

Drilling has switched to the Subeylidere target, which is hosted by volcanoclastic rocks in andesitic flows. At surface, gold mineralization is associated with chalcedonic and quartz-vein structures and with stockworks found beneath a zone of opaline silica flooding.

So far, one of the five planned holes has been completed; it returned 6.8 grams over 1 metre of quartz veining, starting at 6 metres below surface.

In central Turkey, Eldorado has acquired seven new permits while relinquishing an option on the separate KS prospect. The recent acquisitions include epithermal-vein and porphyry targets, and the KS prospect is part of a larger joint venture with a private company.

Meanwhile, Eldorado has obtained an establishment permit for its proposed Kisladag open-pit, heap-leach mine. The company still requires operating and construction permits before it can proceed with development.

In August, Eldorado tabled a revised operating plan that called for a doubling of production capacity in the first year of operations and the assumption of mining in the third year. Under a previous plan, the plant was to have been expanded in the fifth year of operation, when contract mining had been scheduled to end.

The ultimate volume of ore to be pushed through the plant remains unchanged, though mining is now explected to last 12 years instead of 14. Hence annual production rates are higher: a total of 155,000 oz. will be produced in the first year and an average of 246,000 oz. in each year thereafter.

Life-of-mine cash costs ring in at US$149 per oz., while total production costs are pegged at US$201 per oz. Both are better than original projections.

At last report, Kisladag hosted 135 million tonnes of reserves grading 1.16 grams gold per tonne. The estimate is based on a cutoff grade of 0.35 gram per tonne for oxides and 0.5 gram for primary material, plus a gold price of US$325 per oz.

In all, Kisladag hosts 214.8 million tonnes of measured and indicated resources averaging 1.04 grams gold. An additional 45.5 million tonnes at 0.75 gram are classified as inferred.

The resource estimates are based on a cutoff grade of 0.4 gram gold.

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