Aldridge Minerals Inc. (TSX-V: AGM) (“Aldridge” or the “Company”)
announced today the filing of its audited consolidated financial
statements for the year ending December 31, 2014 (the “2014
Financials”), and the Management’s Discussion & Analysis related thereto
(the “2014 MD&A”), which are available on SEDAR and at www.aldridgeminerals.ca.
, President & CEO, commented: “Despite the current challenging
market conditions for mining companies, 2014 was a very positive and
productive year for Aldridge. Following the NI 43-101 compliant
Feasibility Study published in May 2013, the major accomplishments of
Completion of the Yenipazar Project Optimization Study which resulted
in a CAPEX estimate of US$ 230 million, an after-tax NPV(7%) of US$
330 million, and an after-tax IRR of 32.2%. The Optimization Study
demonstrated that the Yenipazar Project has high margins with
estimated revenue (NSR) of US$ 83.24 per tonne versus operating costs
of US$ 29.65 per tonne.
Approval of the EIA in seven months after the submittal of our
application. This relatively fast approval is a clear indication of
the Central Government Agencies’ comfort with and support of the
Yenipazar Project despite the stringent Turkish EIA approval process.
Approval of the local operating permit, referred to as the GSM permit,
two months after our application. The approval of the local operating
permit by the Governor’s Office is a clear demonstration of the
continuation of our Social License to Operate that we have established
and benefited from throughout Aldridge’s 11 years of exploration and
development at Yenipazar.
Completion of a US$ 40 million interim bridge financing in September
2014 with Orion Mine Finance, a private equity mineral resources
investment business. This financing included US$ 35 million in debt
and approximately US$ 5.25 million in equity at C$ 0.49 per share, or
approximately a 70% premium to market price at the time, and partial
lead and gold offtakes. Our two largest shareholders, ANT Holding and
APMS Investment Fund, demonstrated additional strong financial support
for the Yenipazar Project by contributing an additional US$ 5 million
of equity at the same premium for a total interim financing of US$ 45
The US$ 45 million interim bridge financing allowed us to start
acquiring the farmland within our approved project fence line in Q4
2014. Our target is to complete the land acquisition process in Q4 2015
with the assistance of the Turkish Ministry of Energy and Natural
Resources. The interim financing also provides the Company with working
capital to Q1 2016 when we plan to initiate construction. As I have
stressed throughout 2014, our senior management team is fully qualified
and capable to mitigate the risks associated with construction execution
and leverage the mature construction industry in Turkey. Accordingly, in
2015 we are focused on construction execution planning as well as
strategies to provide cost and schedule certainty before we start any
construction activity in 2016. This intense construction planning will
allow us to be well prepared for the construction activities, as we
recognize that construction execution must meet cost and schedule
The financial metrics of the Yenipazar Project presented above coupled
with our highly qualified management team has attracted multiple senior
banks from North America, Europe and Australia to provide indicative
term sheets for senior debt facilities. In addition, we have been
approached by streaming companies to provide alternate financing
mechanisms as a supplement to the senior debt. I am working closely with
our Finance Committee and the Board to systematically evaluate multiple
project finance alternatives and select the best one for our
shareholders for the short and long term. I will provide more details in
the coming months and plan to complete the Project Financing in Q4 2015.
Throughout 2015, I look forward to in-person meetings as well as regular
public announcements to inform our shareholders of our progress towards
Project Financing and Construction Planning. Our key milestones beyond
2015 are to start construction in 2016 with the ultimate goal of
production in early 2018. As you know, I firmly believe that company
leadership must be close to the development of its key mining asset.
Accordingly, I will continue to be located in Turkey with our
construction team throughout the development phase, providing in-depth
knowledge of the business culture and conditions in Turkey.”
Aldridge’s Highlights and Achievements
The following are a summary of the key achievement areas in 2014.
Additional details are provided in the 2014 MD&A:
- US$45,000,000 Interim Financing Closed (the “Interim Financing”)
– On September 25, 2014, the Company completed its previously
announced Interim Financing with participation by Orion Fund JV
Limited, an affiliate of Orion Mine Finance funds (“Orion”), and the
Company’s two largest shareholders. The Interim Financing included a
US$10,000,000 equity private placement at US$0.45 per Common Share or
approximately CDN$0.49 per Common Share, which was a 70% premium to
the closing price of the Common Shares on the TSX Venture Exchange on
August 28, 2014, the date prior to the announcement of the Interim
Financing. The Company also entered into a loan agreement with Orion
for a US$35,000,000 secured bridge loan maturing on August 29, 2016
and lead concentrate and gold offtake agreements with an Orion
affiliate. At December 31, 2014, the Company had drawn US$10,000,000
of the Loan facility.
- Leadership – The Company further enhanced its leadership team
with the appointment of several key leadership roles. Mr.
who lives in Turkey, was appointed President and CEO in March 2014.
Mr. Ilhan is an experienced mining executive with capabilities
spanning the entire mine life cycle including scoping, exploration,
construction, commissioning, financial management, operations, and
reclamation. In September 2014, Mr.
was appointed to
the Board as Director. Mr. Silver is currently a portfolio manager of
Orion and a director of Stornoway Diamond Corporation. Mr.
was appointed Engineering, Procurement and Construction (“EPC”)
Director in January 2015 bringing 26 years of experience in varying
roles of successful EPC delivery for heavy industry minerals projects
worldwide that finished on budget and schedule. Additionally, Mr.
Dircks’ recent experience in Turkey includes working for Eldorado Gold
Corporation at both the Kişladağ and Efemçukuru mines where he was
responsible for project and construction management.
- Yenipazar Optimization Study – In April 2014 the Company
announced the positive 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.
Aldridge reduced the estimated pre-production project capital costs to
US$230 million, or approximately 40% lower than 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
Numerous well-respected engineering and consultancy firms contributed to
the Optimization Study, including Promer Engineering (Turkey) and Jacobs
Minerals Canada Inc. By maximizing the use of highly qualified Turkish
contractors and suppliers, the work capitalized on Turkey’s key positive
differentiators including the ability to effectively employ contract
mining, leverage the country’s skilled construction industry and its
lower labour and manufacturing costs. Additionally, design areas such as
the waste rock dump, tailings management facility and grinding circuits
were optimized based on new studies and testwork completed since the
On May 26, 2014 the Company filed the Optimization Study NI 43-101
compliant technical report on SEDAR (the “Technical Report”). The
Technical Report demonstrates that the Yenipazar Project is highly
robust with an after-tax IRR of 32.2%, an after-tax NPV (7% discount
rate) of US$330 million, and an after-tax payback of 2.4 years.
- EIA, Permits & Licenses – 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. Additionally, Aldridge also received the
local commercial operating permit (“GSM Permit”), a five-year
extension to the Yenipazar Operating (mining) License to May 21, 2019,
and five-year Operating Permits for each of its five metals.
Strategy and Outlook
The Company’s primary objective in 2015 is to position the Company for
construction in 2016 and 2017 with the ultimate objective of production
in 2018. As a result, the Company’s 2015 focus will be to advance the
following initiatives already underway:
- Land Acquisition – The land acquisition process (“LAP”)
for the Yenipazar Project involves acquiring approximately 8.2 square
kilometres of land divided into approximately 500 land parcels
presently owned by many of the people living in the nearby communities
of Eğlence and Gövdecili. The September 2014 Interim Financing
included sufficient funds to purchase the land required. Turkish
government investment policies provide support, including land
acquisition, for projects like the Yenipazar Project that provide
economic benefits to under developed regions. The Company expects to
utilize legislated government support, while adhering to applicable
IFC equator principles, in order to acquire the needed land. The land
acquisition process is estimated to be completed by the end of 2015,
although there are inherent procedural risks that could extend the
- Project Financing – The Company is actively considering various
project financing alternatives, including evaluating indicative term
sheets from traditional banks, commodity streaming companies and
private equity firms. The process is estimated to be completed by the
end of 2015. The amount and timing of obtaining new funds may be
affected by numerous factors including capital market conditions for
junior mining companies, fluctuations in commodity prices, potential
changes to the political environment in Turkey and the timing of
completing the land acquisition process.
- Exploration – The Company will also undertake an exploration
program at its Yenipazar Property. To date approximately ten percent
of the Company’s 100 square kilometre concession has been explored.
The focus of the Company’s exploration efforts will be a diamond drill
program immediately to the north of the known orebody. In addition,
the Company will focus on other areas of the 100 square kilometres of
the Yenipazar Property.
Selected Financial Information
The following table provides selected consolidated financial information
that should be read in conjunction with the audited consolidated
financial statements of the Company. Up to June 30, 2013, Yenipazar
Project expenditures were recorded as exploration and evaluation
expenditures in the Statement of Loss. Beginning July 1, 2013 further
expenditures on Yenipazar were capitalized as mineral property under
development in the Statement of Financial Position in accordance with
the Company’s accounting policy.
(In Canadian Dollars)
Loss before income tax
Net loss per share
Cash and cash equivalents
Working capital (i)
Total non-current financial liabilities
(i) Working capital equals current assets less current liabilities, and
is a non-GAAP measure used by management.
Aldridge is a development stage mining company focused on its wholly
owned Yenipazar polymetallic Volcanogenic Massive Sulfide Project (Au,
Ag, Cu, Pb, Zn) in Turkey (the “Project”), 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 engineering, 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, including, but are not limited to
the ability to accomplish remaining milestones, land acquisitions,
securing project financing and commencing construction in 2016,
advancing the Yenipazar Project to production in 2018, economic
performance, future plans and objectives of the Company.
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. Such risks, uncertainties and factors
including meeting conditions for advances under the Loan and the other
factors discussed under the heading “Risk Factors” in the Company’s
Management’s Discussion and Analysis for the year ended December 31,
2014 and in other continuous disclosure filings made by the Company with
Canadian securities regulatory authorities and available at www.sedar.com.
Any number of important factors could cause actual results to differ
materially from these forward-looking statements as well as future
Forward-looking information is based on a number of factors and
assumptions which have been used to develop such information but which
may prove to be incorrect, including, but not limited to, assumptions in
connection with the continuance of Aldridge and its subsidiaries as a
going concern, general economic and market conditions, mineral prices,
the accuracy of mineral resource estimates. 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 unless required by law.
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.
Source: Aldridge Minerals Inc.