Kisladag is the largest gold mine in Turkey and is of prime importance to Eldorado Gold. Here are five reasons to consider Eldorado as it preps Kisladag for greater production.
The expected life of the Kisladag mine is 22 years. A gold-porphyry deposit, Kisladag is a low-grade, bulk-tonnage, open pit operation. Eldorado Gold has 100% ownership of this mine in western Turkey.
2. Approval in place
The company recently announced that its wholly owned subsidiary received a positive Environmental Impact Assessment (EIA) decision from the Ministry of Environment and Urbanization of Turkey regarding Kisladag. Therefore, Eldorado Gold has approval to expand the mine up to a production rate of 35 million tonnes per year.
In 2011, Eldorado received approval of a supplementary EIA for the expansion to 12.5 million tonnes per year. It completed Phase III expansion in 2011 at Kisladag. The company’s board has given approval to reactivate the expansion. Eldorado will go ahead with a planned expansion to 20 million tonnes.
3. Capital commitment and efficient use of assets
Eldorado Gold will invest another approximately $90 million to complete the Kisladag expansion. The company is focused on the aforementioned expansion to 20 million tonnes, though it did consider keeping it at 12.5 million tonnes of crusher throughput, and also looked at 17 million tonnes per annum crusher throughput.
The company said recently on a Q2 2014 earnings call that, “The 20 million tonnes per annum gave us the best utilization of existing equipment purchased on the previous expansion and also the best production profile on a yearly basis.”
Construction will commence in 2015. The company is aiming for a completion date of mid-2016. Q2 2014 capital expenditures at Kisladag included equipment for expansion and capitalized waste stripping.
4. Consistent production
In 2013, Kisladag had gold production of 306,182 ounces. For Q2 2014, Eldorado Gold produced 76,980 ounces of gold from the mine, versus 76,735 in Q2 2013. For the first six months of 2014, Kisladag had production of 144,055 ounces of gold versus 146,956 ounces of gold for the first six months of 2013.
5. Forecast production
For 2014, Eldorado Gold estimates gold production of 300,000-335,000 ounces at the Kisladag mine. It forecasts that the mine will produce an average of 325,000 ounces per year in the first five years after its expansion.
Consider Eldorado Gold as an investment option as it continues its program to expand its flagship Kisladag mine. The company engages in all aspects of the mining industry including exploration, development, production and reclamation and its focus on advancing projects for greater growth has the potential to provide income to investors.
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Fool contributor Michael Ugulini has no position in any stocks mentioned.