Eric Roth’s Aegean Metals sees upside in Turkey

VANCOUVER — It was a quiet couple of years for Eric Roth after Yamana Gold (TSX: YRI; NYSE: AUY) snapped up his Extorre Gold Mines and its Cerro Moro project in Argentina for US$400 million in mid-2012. But now as president and CEO of junior Aegean Metals Group (TSXV: AGN), Roth looks to be getting back into the game — this time in Turkey.

In an interview with The Northern Miner in Vancouver, Roth outlines how the group had been involved in Turkey in a private capacity for a couple of years before its initial public offering back in late 2012. The company scored a pair of relatively greenfield prospects from Teck Resources (TSX: TCK.B; NYSE: TCK), namely its Hot Maden and Ergama projects.

Ergama covers 22 sq. km 180 km southwest of Istanbul and had been the target of a small drill campaign by Newmont Mining (NYSE: NEM) in 2004. The project is southeast of Alamos Gold’s (TSX: AGI; NYSE: AGI) development-stage Agi Dagi deposit and 75 km southeast of the Halilaga joint venture between Teck and Pilot Gold (TSX: PLG; US-OTC: PLGTF) within the Biga peninsula.

The proposed geological model at Ergama is a “telescoped porphyry system.” Within this model, both high and intermediate sulphidation epithermal gold mineralization and a quartz–alunite–clay lithocap overlie porphyry-style mineralization at depth. Aegean completed geophysical work during its earn-in that identified two strong chargeability anomalies below 100 metres depth that are interpreted to be sulphides associated with a buried porphyry system.

“It’s a high-sulphidation epithermal system on surface and there looks to be a litho cap sitting on top of a porphyry gold deposit,” Roth says. “What Newmont did was shallow drilling chasing up some gold anomalies on surface, but they didn’t penetrate much more than the silica cap. That target we see today from the geophysics is around 200 metres down, so it hasn’t been tested. We’ve since done a bit of follow-up mapping and geochemistry to help establish that porphyry target at depth. It’s a high priority moving forward.”

What Aegean had not expected was that Teck would exercise a one-time, back-in option at Ergama wherein it must invest US$1.3 million in exploration over three years to earn a 51% interest in the property. Roth says Teck’s local exploration team had always liked the project, but he had anticipated gaining a 100% stake. He adds that it’s “great to have such a big partner” and notes there’s been a lot of success within the Pilot–Teck joint venture at Haligaga.

“I think the closest potential geological comparable might be Agi Dagi,” he adds. “What we’re seeing from surface looks to be a spitting image of that project. But I also think the geophysics is showing us at depth another Halilaga-type copper–gold porphyry system, which I think is the big attraction at Ergama. The Pilot team has been really dynamic and out-there drilling and generating interest, and during the next step I think we’ll get some nice drill results.”

Teck recently outlined its exploration program at Ergama: more  geological mapping, silt and rock-chip sampling, and a further 14.2 line km of geophysics to extend Aegean’s grid to the south.

Hot Maden sits on nearly the opposite side of Turkey, 1,050 km east of Istanbul. Aegean grabbed part of the 73 sq. km property package from Teck and tacked on the rest through a government auction. The project was the site of a high-grade underground copper mine in the early 1920s, and still hosts historic adits running into the hillside and the foundation of an old concentrator.

Priority targets at Hot Maden include stockworks and vein-related, gold–copper mineralization along the western margin of the Main fault zone, and a possible porphyry target at depth. The company has also noted stratabound lead–zinc mineralization in sedimentary rocks situated on the eastern flank of the Main fault zone.

After completing what Roth describes as “a variety of early stage, target-generation work” at Hot Maden, Aegean optioned the project to conglomerate Lidya Madencilik in early July. The Turkish company is also a 20% owner in Alacer Gold’s (TSX: ASR; USOTC-ALIAF) Copler mine in the eastern part of the country.

“Part of the strategy behind the earn-in option with Lidya had to do with the permitting, and that group is well connected and has a strong technical arm,” Roth says. “What we need as a small company is to make a discovery and get some resources into the portfolio. We’d done a lot of the earlier-stage work, and generated around eight to ten quality targets. Lidya is ready to hit the ground hard moving forward, and the next step is to drill. Aside from the permit angle they had the technical resources and access to cash, so that will really help us advance the project.”

With strong partners on its two projects, Roth says Aegean is on the lookout for additional assets in Turkey. He explains that the company is likely now targeting more “advanced-stage” projects since he feels the market is more likely to respond to near-term production stories. He also points out Aegean is looking forward to news flow as Teck and Lidya advance exploration activities.

“We definitely have a lot of investors on the sidelines that would be happy to help with that acquisition of a more advanced-stage property. If that opportunity comes up we can certainly put that money together,” Roth says. “Ideally it would be at that resource stage or could be brought there over the short term. As you know the markets aren’t too favourable for companies with early stage projects, so we want to get on the road to discovery quickly. Turkey is a great place to be, and we’d also still be happy to look at some more exploration-stage assets over there.”

Aegean shares have traded between 4¢ to 20¢ over the past year, and closed at 5¢ at press time. The company has 39 million shares outstanding — with Teck holding a 7% equity stake — for a $1.8-million market capitalization.