TORONTO--(BUSINESS WIRE)--Aldridge Minerals Inc. (TSX Venture:AGM) (“Aldridge” or the “Company”)
announced today the filing of the NI 43-101 compliant Technical Report
summarizing its Yenipazar Project Optimization Study (the “Technical
Report” and the “Optimization Study” respectively) and the financial
results for the three months ended March 31, 2014. The Technical Report,
the unaudited consolidated financial statements for the three months
ending March 31, 2014 (the “Q1 2014 Financials”), and the Management's
Discussion & Analysis related thereto (the “Q1 2014 MD&A”) are available
on SEDAR and at www.aldridgeminerals.ca.
Filing of Technical Report
During the compilation of the Technical Report, a number of adjustments
were identified by the Company and certain Qualified Persons that had a
favourable impact on the project economics compared to the results
announced on April 15, 2014. Certain sustaining capital costs increased,
which were offset by significantly lower marketing penalties and
allowances. Compared to the results initially announced on April 15,
2014, sustaining capital increased by approximately US$3 million
primarily due to increased pit-wall dewatering and material handling
costs. The updated marketing study analysis concluded that the
processing penalty and allowance rates should be reduced to reflect the
results from more recent metallurgical tests and improved markets, which
translated to higher undiscounted revenues of approximately US$65
million over the life of mine. The Technical Report includes economic
results that reflect the final adjustments requested by the Qualified
Persons and other experts relied upon by the Company.
The summary below compares the project economics estimated as part of
the Technical Report to the results from the Feasibility Study completed
in Q2 2013:
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Optimization Study
May 2014 (US$)
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Feasibility Study
May 2013 (US$)
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Pre-Production CAPEX (including contingencies):
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$230 million
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$382 million
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Sustaining Capital (over 12-year life of mine
including closure cost):
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$40 million
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$58 million
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OPEX (cash operating cost per tonne of ore):
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$29.65
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$29.13
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Base Case Metal Prices Gold:
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$1,250/oz
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$1,450/oz
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Silver:
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$20.00/oz
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$28.00/oz
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Copper:
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$3.00/lb
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$3.00/lb
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Lead:
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$0.94/lb
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$0.95/lb
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Zinc:
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$0.90/lb
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$0.90/lb
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IRR (after-tax at base case metal prices):
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32.2%
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23.7%
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NPV7 (after-tax at base case metal
prices):
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$330 million
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$361 million
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Payback (after-tax):
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2.4 years
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2.8 years
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The economic highlights of the Optimization Study as described in
greater detail in the Technical Report are as follows:
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Pre-Tax
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After-Tax
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IRR
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34.5%
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32.2%
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NPV (0%)
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US$739M
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US$644M
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NPV (7%)
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US$382M
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US$330M
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Payback (years)
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2.3
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2.4
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Life of mine and average annual payable production figures are detailed
in the table below. As shown, gold and silver combine to generate
approximately 55% of total revenue with base metals generating the
balance (at Optimization Study base case pricing).
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Product
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Gold
(oz.)
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Silver
(M oz.)
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Copper
(M lbs)
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Lead
(M lbs)
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Zinc
(M lbs)
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Life of Mine
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650,165
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19.4
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122.1
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387.0
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589.2
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Average Annual
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54,180
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1.6
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10.2
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32.3
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49.1
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% of Revenue
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38.8%
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16.0%
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15.8%
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13.4%
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16.0%
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Receipt of Permits and License Extension
The Company is pleased to announce that it has received several key
permits and licenses in Turkey. Aldridge has received the local permit
that will allow the Company to conduct commercial activities in the
region surrounding the Yenipazar Property. The Company has also received
a five-year extension to the Yenipazar Operating (mining) License, which
was to expire in December 2014, to May 21, 2019. Together with the
Operating License extension, the Company was granted five-year Operating
Permits for each of the five metals. The Company will seek extensions to
the Operating License and Operating Permits prior to 2019.
Han Ilhan, President & CEO, commented: “The timely receipt of the
permits and Operating License extension further reduces the development
risk of Yenipazar. Together with our already received EIA Permit,
Aldridge has the permits necessary to progress with the planned
development of the Project. We will apply for construction and other
ancillary permits in due course, but do not anticipate any delays to the
development timeline. With the excellent economic results of the
Optimization Study and the receipt of these critical permits, we believe
our project is poised for financing.”
Q1 2014 Financial Results
Highlights
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Impact Assessment (“EIA”) report approved – On March 6, 2014
the Company announced receipt of the Environmental Impact Assessment
Positive Decision Certificate (“EIA Permit”). Obtaining the EIA
approval in less than seven months from the initial application date
was a significant achievement.
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CEO Appointed - Mr. Han Ilhan was appointed President and CEO
of Aldridge, as announced on March 25, 2014.
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Optimization Study – On April 15, 2014 the Company announced
the results of its Optimization Study, which utilized revisions to key
design and operating parameters undertaken since the release of the
Yenipazar Feasibility Study in May 2013 (the "Feasibility Study").
Aldridge significantly reduced the pre-production project capital
costs to US$230 million, representing a 40% reduction from the
original Feasibility Study estimate of US$382 million. Plant
throughput remains unchanged at 2.5 million tonnes of ore per annum
over a 12-year mine life.
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Cash and cash equivalents at March 31, 2014 total $4,649,265 -
The Company continues to prudently manage its cash by deferring
certain operating and project development activities until it obtains
additional financing.
Outlook
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Interim and Project Financing - The continuing development of
the Yenipazar Project requires the Company to raise funds. The Company
is investigating alternative opportunities for interim financing of
short-term requirements, such as working capital, basic engineering
and land acquisition, and for the full project financing. The Board of
Directors has formed a Finance Committee to assist the Board in
fulfilling its oversight responsibilities with respect to the
Company’s interim and project financing strategies and will be
actively involved in these ongoing discussions.
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Investment Incentive Certificate (“IIC”) application - The
preliminary application for the IIC was submitted in September 2013
and expects to submit, in the next few weeks, a final application
supported by the reduced pre-production capital expenditure list and
the EIA Permit. The incentive program allows for a government capital
contribution to qualifying depreciable capital expenditures of either
40% for large scale projects or 30% for regional projects. This
contribution is funded by a corporate income tax rate reduction from
20% to 6%. The Company expects to receive the IIC based on the large
scale project incentive within approximately two months and the impact
of these incentives have been factored into Technical Report.
Selected Financial Information
The following table provides selected consolidated financial information
that should be read in conjunction with the Q1 2014 Financials of the
Company.
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(In Canadian Dollars)
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THREE MONTHS
ENDED AND AS AT
MARCH 31,
2014
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THREE MONTHS
ENDED AND AS AT
MARCH 31,
2013
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TWELVE MONTHS
ENDED AND AS AT
DECEMBER 31, 2013
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Loss before income tax and discontinued operations
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$(801,236)
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$(3,034,550)
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$(7,387,867)
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Net Loss
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(806,852)
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(2,691,117)
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(7,044,434)
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Net loss per share
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(0.01)
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(0.04)
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(0.09)
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Cash and cash equivalents
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4,649,265
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14,078,178
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7,055,868
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Working capital (i)
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4,629,160
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13,732,336
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6,917,577
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Total assets
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10,457,580
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15,702,807
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11,177,814
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Total non-current financial liabilities
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104,342
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104,793
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123,772
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(i) Working capital equals current assets less current liabilities, and
is a non-GAAP measure used by management.
The Company's expenditures on mineral properties are as follows:
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THREE MONTHS
ENDED
MARCH 31, 2014
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THREE MONTHS
ENDED
MARCH 31, 2013
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TWELVE MONTHS ENDED
DECEMBER 31, 2013
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Yenipazar Project, Turkey
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$1,533,067
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$ 2,033,719
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$5,682,708
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Exploration Licenses, Turkey(i)
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$5,029
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3,533
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3,534
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Total Expenditures on Mineral Property
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$1,538,096
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$ 2,037,252
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$5,686,242
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(i) The Company presently holds 7 licenses.
About Aldridge
Aldridge is a development stage mining company focused on its wholly
owned Yenipazar polymetallic VMS Project (Au, Ag, Cu, Pb, Zn) in Turkey,
a country that is committed to developing its natural resources.
Aldridge completed the Yenipazar Optimization Study and filed the
related NI 43-101 compliant technical report in May 2014, which updated
the original May 2013 Feasibility Study. The Company is currently
advancing the Project on key aspects including permitting, design, land
acquisition and project financing.
Caution Regarding Forward-Looking Information
This news release includes certain forward-looking statements within the
meaning of Canadian securities laws. Forward-looking statements involve
risks, uncertainties and other factors that could cause actual results,
performance, prospects and opportunities to differ materially from those
expressed in such forward-looking statements. Forward-looking statements
in this news release, include, but are not limited to, economic
performance and future plans and objectives of Aldridge. Any number of
important factors could cause actual results to differ materially from
these forward-looking statements as well as future results. Although
Aldridge believes that the assumptions and factors used in making the
forward-looking statements are reasonable, undue reliance should not be
placed on these statements, which only apply as of the date of this news
release, and no assurance can be given that such events will occur in
the disclosed time frames or at all. Aldridge disclaims any intention or
obligation to update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news release.