Vancouver — Closure of
The mine, which has been operating since 2001, was ordered closed pending completion of certain permitting requirements and an updated environmental impact assessment to the Turkish Ministry of Environment and Forestry.
More than 400 workers were employed at Ovacik.
There had long been considerable opposition to the mine owing to fears of soil contamination from cyanide use.
Frontier Pacific has been negotiating the purchase of a 100% interest in the mine with Newmont since June. The company had agreed to buy the mine for US$30 million plus deferred payments of up to US$14 million. Newmont is operating the mine until Frontier pays for the acquisition.
Newmont believes the halt in production is a temporary measure and expects its operating permits to be reinstated, though it does not know when that might happen.
Production from open-pit and underground operations at the daily rate of 1,500 tonnes per day had been producing 170,000 oz. gold per year at cash costs of US$202 per oz.
The property hosts proven and probable open-pit reserves of 561,000 tonnes grading 13.3 grams gold, or 239,000 oz. Inferred resources minable from underground are pegged at 655,000 tonnes grading 12.5 grams gold, or 263,000 oz.
When asked what the closure means to Frontier Pacific, Peter Tegart, that company’s CEO, said: “It’s part of the plan that came from the court order to shut the mine, and we’ve agreed to it. We are putting everyone on vacation for a few weeks until we get the full operating permit, so nobody will be laid off.”
Tegart, who anticipates the shutdown could last until late September, said the mine had been working on only a temporary permit, which was based on an environmental impact statement that had not been completed. He added that the EIS is now complete and being reviewed by the government.
“[The closure] is actually beneficial for us,” he said, “because, as it was, we were going to buy the mine with the temporary operating permit in place. As things stand, there will be no more hiccups once we get the full operating permit.”
Frontier Pacific also owns the Perama Hill mine in Greece, just across the border, 5 km north of the Aegean Sea coast. Perama Hill is in the same Tertiary volcanic belt as Ovacik.
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