Alacer Gold Achieves 2017 Production Guidance, Beats Cost Guidance and Provides 2018 Outlook as the Sulfide Project Approaches First Gold Pour
TORONTO, Jan. 15, 2018 (GLOBE NEWSWIRE) -- Alacer Gold Corp. (“Alacer” or the “Company”) (TSX:ASR) and (ASX:AQG) announces full-year 2017 production results, unaudited full-year cost results, and 2018 production and cost guidance.
Rod Antal, Alacer’s President and Chief Executive Officer, stated, “I am pleased to report that we produced 168,1631 ounces of gold at unaudited All-in Sustaining Costs2 (“AISC”) of $685 per ounce in 2017, meeting our original production and beating AISC cost guidance for the year. The production initiatives generated through our operational excellence program were very successful, delivering 64,542 ounces in the fourth quarter, making it the strongest quarter of the year. All of this was achieved with zero lost-time injuries in 2017 and we have now worked 401 days, or over 8.2 million man-hours without a lost-time injury.
2018 will be a pivotal year for Alacer as the Çöpler sulfide expansion project is delivered on time and under budget in the third quarter, providing long-term gold production for at least 20 years. The sulfide expansion project is currently 75% complete and dry commissioning is underway in some areas. Start-up of the plant will commence by first processing oxide ore through the crushing, grinding and carbon-in-pulp (“CIP”) circuits. Once these circuits are stable and the pressure oxidation circuits are ready, the full plant will be brought on line.
2018 production guidance is 120,000 to 190,0001 ounces from Çöpler oxides and sulfides. We also expect initial mining at a new oxide deposit, Çakmaktepe, later this year.”
2018 Overview (100%)
- Çöpler oxide gold production guidance of 70,000 to 90,000 ounces at All-in Sustaining Costs for the oxides of $750 to $800 per ounce
- Çöpler Sulfide Expansion Project
- Construction will be delivered under budget and on schedule
- Sulfide gold production is expected to be 50,000 to 100,000 ounces
- The full sulfide plant will start in the third quarter. The staged startup will begin with the crushing, grinding, CIP circuits first, and then the remainder of the plant, including the pressure oxidation circuits
- Costs and revenues associated with initial sulfide operations will be capitalized to the construction costs until commercial production is achieved
- Initial sulfide operating costs have been updated to reflect the period to commercial production. These initial operating costs are not indicative of the costs going forward and include:
- $45 million for processing costs; $3 million for ore blending; and $30 million sustaining capital which includes $22 million for the construction of phase two of the tailings storage facility (“TSF”)
- The Life-of-Mine operational and cost assumptions have been reviewed, confirming that the forecasts disclosed in the Technical Report continue to accurately depict the economic proposition of the Sulfide Project3
- Çakmaktepe mining expected to begin in the fourth quarter with nominal gold production expected in 2018
- Gediktepe DFS is scheduled to be completed in June 2018
2018 Guidance (100%)
Guidance for the Company’s 2018 gold production and costs are as follows:
| Heap-leach gold ounces produced (includes Çakmaktepe) | (‘000’s) | 70 to 90 |
| Sulfide plant gold ounces produced | (‘000’s) | 50 to 100 |
| Oxide ore tonnes stacked (includes Çakmaktepe) | (millions) | 2.3 |
| Oxide ore grade (includes Çakmaktepe) | (gpt gold) | 1.2 |
| Sulfide tonnes mined | (millions) | 1.9 |
| Sulfide ore grade | (gpt gold) | 2.7 |
| Waste tonnes mined | (millions) | 30 |
| Total Cash Costs (C2) (oxides only)4 | ($/oz) | 650 to 700 |
| All-in Sustaining Costs (oxides only)4 | ($/oz) | 750 to 800 |
| Çöpler oxide sustaining capital expenditure | ($ millions) | 7 |
| Çöpler sulfide sustaining capital expenditure | ($ millions) | 30 |
| Çöpler sulfide expansion capital expenditure | ($ millions) | 225 |
| Other growth capital expenditure (includes Gediktepe) | ($ millions) | 12 |
| Exploration expenditure | ($ millions) | 11 |
| General and Administrative | ($ millions) | 11 |
As the sulfide plant ramps up over the second half of the year, the plant’s performance will be assessed and with the real-time data the 2019 production and cost estimates will be provided with standard guidance disclosure.
Çöpler’s 2018 oxide sustaining capital expenditure is planned to total $7 million ($6 million attributable), which includes $3 million for the expansion of heap leach pad phase four to 58 million tonnes. Çöpler’s sulfide sustaining capital expenditure is expected to total $30 million ($24 million attributable) and includes $22 million ($18 million attributable) for the construction of phase two of the TSF. Growth capital expenditure for 2018 is planned to total $237 million, which includes $225 million ($180 million attributable) for the Çöpler Sulfide Expansion Project construction; $7 million ($3.5 million attributable) to complete the Gediktepe DFS, and $4 million ($2 million attributable) to bring Çakmaktepe into production.
Expenditure on Alacer’s exploration portfolio in Turkey is planned to total $11 million during 2018, of which $6 million is attributable to Alacer. Our 2018 exploration program will focus on Çakmaktepe Far North and in-pit drilling at Çöpler with the goal of continuing to grow the oxide resource. Alacer’s exploration portfolio is held in various joint ventures with our Turkish partner, Lidya Madencilik San. Ve Tic, A.Ş. (“Lidya Mining”).
| Alacer Contribution (%) | Exploration 100% ($ millions) | Exploration Attributable ($ millions) | ||
| Çöpler District 80/20 | 80 | % | 3.3 | 2.6 |
| Çöpler District 50/50 | 50 | % | 2.5 | 1.2 |
| Turkey Regional & Other | Various | 5.7 | 1.9 | |
| TOTAL | 11.4 | 5.7 | ||
Rounding differences will occur
2017 Highlights (100%)
- Zero lost-time injuries for the year
- Çöpler gold production of 168,163 ounces
- Preliminary unaudited Total Cash Costs (C2) of $530 per ounce
- Preliminary unaudited All-in Sustaining Costs of $685 per ounce
- Cash balance of $203 million and debt of $250 million at year end
- Çöpler Sulfide Expansion Project is under budget and remains on schedule at 75% complete
- At the end of 2017 approximately 97% of the concrete work was complete; approximately 90% of structural steel was erected; all field fabricated tanks were complete; all major mechanical equipment was installed; and cable pulling and electrical installation was in progress.
- The Çöpler sulfide stockpiles have grown to 8.8 million tonnes at an average grade of 3.42 gpt gold or approximately 960,000 ounces of contained gold ounces.
- Delivered a maiden Mineral Reserve and a 70% increase to the Mineral Measured and Indicated Resource for Çakmaktepe in the Çöpler District5
Fourth quarter and full-year 2017 financial statements and the related management’s discussion and analysis are planned to be released on or about February 6, 2018 (North America) with a conference call the following day. Conference call details will be announced in due course.
Çöpler Gold Mine Production Statistics for 2017
| Çöpler Gold Mine | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | Year 2017 | |
| Oxide ore mined | (000’s) | 1,030 | 1,721 | 1,908 | 1,652 | 6,311 |
| Oxide ore mined | (gpt gold) | 1.03 | 0.91 | 1.14 | 1.40 | 1.13 |
| Oxide ore mined | (ozs) | 33,947 | 50,176 | 69,979 | 74,382 | 228,484 |
| Oxide ore treated | (000’s) | 1,007 | 1,738 | 1,904 | 1,577 | 6,226 |
| Oxide ore treated | (gpt gold) | 1.03 | 0.91 | 1.14 | 1.44 | 1.13 |
| Sulfide ore mined | (000’s) | 139 | 135 | 394 | 1,020 | 1,688 |
| Sulfide ore mined | (gpt gold) | 2.43 | 3.19 | 4.43 | 3.48 | 3.59 |
| Sulfide ore stockpiled | (ozs) | 10,874 | 13,867 | 56,083 | 114,202 | 195,026 |
| Waste tonnes mined | (000’s) | 7,999 | 6,557 | 6,793 | 7,416 | 28,765 |
| Gold produced | (ozs) | 32,918 | 31,391 | 39,312 | 64,542 | 168,163 |
| Gold sold | (ozs) | 34,804 | 28,415 | 38,381 | 63,056 | 164,656 |
| Çöpler Attributable4: (80% ownership) | ||||||
| Gold ounces produced | (ozs) | 26,333 | 25,113 | 31,450 | 51,634 | 134,530 |
| Gold ounces sold | (ozs) | 27,843 | 22,732 | 30,705 | 50,445 | 131,725 |
Notes
In this announcement:
- All production statistics are on a 100% basis except where otherwise noted.
- All $’s are US$’s except where otherwise noted.
- All ounces are troy ounces of gold.
- 2018 Budget assumptions for Turkish Lira to US$ of 3.8 to 1.00.
- 2018 gold sales - approximately 52,800 ounces will be sold at the hedged price of $1,280 an ounce and the remainder at $1,300 an ounce.
About Alacer
Alacer is a leading intermediate gold mining company, with an 80% interest in the world-class Çöpler Gold Mine in Turkey operated by Anagold Madencilik Sanayi ve Ticaret A.S. (“Anagold”), and the remaining 20% owned by Lidya Madencilik Sanayi ve Ticaret A.S. (“Lidya Mining”). The Company’s primary focus is to leverage its cornerstone Çöpler Mine and strong balance sheet to maximize portfolio value and free cash flow, minimize project risk, and therefore, create maximum value for shareholders. The Çöpler Mine is in east-central Turkey in the Erzincan Province, approximately 1,100 kilometers southeast from Istanbul and 550 kilometers east from Ankara, Turkey’s capital city.
Alacer is actively pursuing initiatives to enhance value beyond the current mine plan:
- Çöpler Oxide Production Optimization – Expansion of the existing heap leach pad capacity to 58 million tonnes continues. A maiden Mineral Reserve of 111,000 ounces was released for Çakmaktepe in December 2017 and adds oxide production starting in 2018. The Company continues to evaluate opportunities to extend oxide production beyond the current reserves, including a new heap leach pad site to the west of the Çöpler Mine.
- Çöpler Sulfide Expansion Project (the “Sulfide Project”) – The Sulfide Project construction is more than 75% complete, under budget, and on schedule for first gold production in the third quarter 2018. The Sulfide Project is expected to deliver long-term growth with robust financial returns and adds 20 years of production at Çöpler. The Sulfide Project will bring Çöpler’s remaining life-of-mine gold production to over 2 million ounces at All-in Sustaining Costs averaging $645 per ounce.
- The Company continues to pursue opportunities to further expand its current operating base to become a sustainable multi-mine producer with a focus on Turkey. The systematic and focused exploration efforts in the Çöpler District, as well as in other regions of Turkey, are progressing. A 70% increase to the Çakmaktepe Mineral Measured and Indicated Resource estimate was released in December 2017, and the resource remains open. The Çöpler District remains the focus in 2018 with the goal of continuing to grow oxide production and utilize the existing Çöpler infrastructure. In the region, work continues on a Definitive Feasibility Study (“DFS”) for the Gediktepe Project and is expected to be complete in June 2018.
Alacer is a Canadian company incorporated in the Yukon Territory with its primary listing on the Toronto Stock Exchange. The Company also has a secondary listing on the Australian Securities Exchange where CHESS Depositary Interests (“CDIs”) trade.
Cautionary Statements
Except for statements of historical fact relating to Alacer, certain statements contained in this press release constitute forward-looking information, future oriented financial information, or financial outlooks (collectively “forward-looking information”) within the meaning of Canadian securities laws. Forward-looking information may be contained in this document and other public filings of Alacer. Forward-looking information often relates to statements concerning Alacer’s outlook and anticipated events or results, and in some cases, can be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “projects”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts.
Forward-looking information includes statements concerning, among other things, preliminary cost reporting in this document; production, cost, and capital expenditure guidance; the ability to expand the current heap leach pad; development plans for processing sulfide ore at Çöpler; the results of any gold reconciliations; the ability to discover additional oxide gold ore; the generation of free cash flow and payment of dividends; matters relating to proposed exploration; communications with local stakeholders; maintaining community and government relations; negotiations of joint ventures; negotiation and completion of transactions; commodity prices; mineral resources, mineral reserves, realization of mineral reserves, and the existence or realization of mineral resource estimates; the development approach; the timing and amount of future production; the timing of studies, announcements, and analysis; the timing of construction and development of proposed mines and process facilities; capital and operating expenditures; economic conditions; availability of sufficient financing; exploration plans; receipt of regulatory approvals; and any and all other timing, exploration, development, operational, financial, budgetary, economic, legal, social, environmental, regulatory, and political matters that may influence or be influenced by future events or conditions.
Such forward-looking information and statements are based on a number of material factors and assumptions, including, but not limited in any manner to, those disclosed in any other of Alacer’s filings, and include the inherent speculative nature of exploration results; the ability to explore; communications with local stakeholders; maintaining community and governmental relations; status of negotiations of joint ventures; weather conditions at Alacer’s operations; commodity prices; the ultimate determination of and realization of mineral reserves; existence or realization of mineral resources; the development approach; availability and receipt of required approvals, titles, licenses and permits; sufficient working capital to develop and operate the mines and implement development plans; access to adequate services and supplies; foreign currency exchange rates; interest rates; access to capital markets and associated cost of funds; availability of a qualified work force; ability to negotiate, finalize, and execute relevant agreements; lack of social opposition to the mines or facilities; lack of legal challenges with respect to the property of Alacer; the timing and amount of future production; the ability to meet production, cost, and capital expenditure targets; timing and ability to produce studies and analyses; capital and operating expenditures; economic conditions; availability of sufficient financing; the ultimate ability to mine, process, and sell mineral products on economically favorable terms; and any and all other timing, exploration, development, operational, financial, budgetary, economic, legal, social, geopolitical, regulatory and political factors that may influence future events or conditions. While we consider these factors and assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.
You should not place undue reliance on forward-looking information and statements. Forward-looking information and statements are only predictions based on our current expectations and our projections about future events. Actual results may vary from such forward-looking information for a variety of reasons including, but not limited to, risks and uncertainties disclosed in Alacer’s filings on the Company’s website at www.alacergold.com, on SEDAR at www.sedar.com and on the ASX at www.asx.com.au, and other unforeseen events or circumstances. Other than as required by law, Alacer does not intend, and undertakes no obligation to update any forward-looking information to reflect, among other things, new information or future events.
For further information on Alacer Gold Corp., please contact:
Lisa Maestas – Director, Investor Relations at +1-303-292-1299
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1 Production results are reported on 100% basis; production results are reduced by a 20% non-controlling interest at the Çöpler Gold Mine to derive attributable gold production.
2 All-in Sustaining Costs per ounce is a non-IFRS performance measure with no standardized definition under IFRS. For further information and a detailed reconciliation to IFRS, please see the “Non-IFRS Measures” section of the most recent MD&A.
3 Detailed information regarding the Sulfide Project, including the material assumptions on which the forward-looking financial information is based, can be found in the technical report dated June 9, 2016 entitled “Çöpler Mine Technical Report,” available on www.sedar.com and on www.asx.com.au.
4 Total Cash Costs (C2) per ounce and All-in Sustaining Costs per ounce are non-IFRS performance measures with no standardized definition under IFRS. For further information and a detailed reconciliation to IFRS, please see the “Non-IFRS Measures” section of the most recent MD&A.
5 Detailed information regarding the Çakmaktepe maiden Mineral Reserve and updated Mineral Resource can be found in the press release entitled “Alacer Gold Announces Maiden Mineral Reserve and a 70% Increase in Measured and Indicated Mineral Resource for Çakmaktepe as well as Additional Exploration Results for Çakmaktepe” dated December 18, 2017, available on www.sedar.com and on www.asx.com.au.