PERTH (miningweekly.com) – The board of Alacer Gold has approved the construction of the $744-million Çöpler sulphide project, in Turkey, the dual-listed gold miner announced on Friday.

The sulphide project would consist of the introduction of a whole-ore pressure oxidation (POX) circuit at the Çöpler mine that would extend the mine life and boost current resources and reserves.

The POX facility was expected to process sulphide ore at a rate of 5 000 t/d and would result in a 20-year mine life for the project. Over the remaining project life, the Çöpler mine was expected to produce some four-million ounces of gold

“The positive decision to proceed with the full construction of the Çöpler sulphide project represents a major milestone. The substantial amount of work completed provides the detailed support on which to base our investment decision and further validates our confidence in delivering long-term growth at highly attractive financial returns,” said Alacer president and CEO Rod Antal.

“The project now represents an improved after-tax net present value of $728-million and will provide an after-tax internal rate of return of 19.2% and a payback of less than three years from the start of sulphide gold production.”

Antal said that with the project team having been in place for over a year, significant value had been realised through extensive detailed engineering and ongoing de-risking efforts, which resulted in greater definition of the project’s capital estimate, with only $697-million remaining to be spent.

The first gold pour from the sulphide operation was expected in the third quarter of 2018 and the plant would achieve its initial design capacity of 1.9-million tonnes a year by the end of 2019.

Twin horizontal autoclaves would allow for incremental improvements to increase the throughput rate by 2.2-million tonnes a year by 2021.

Meanwhile, Alacer reported a 37% decline in gold production during the three months to March, compared with the previous corresponding period, as the oxide ore tonnes mined decreased by 37% and oxide ore grades declined by 45%.

During the first quarter ended March, Alacer produced 31 926 oz of gold, compared with the 50 949 oz produced in the previous corresponding period from the Çöpler mine.

Gold production from Çöpler was in line with expectations, Alacer told shareholders, with total cash costs recorded at $659/oz and all-in sustaining costs recorded at $846/oz.

“Çöpler continued to deliver as expected in the first quarter. Production will increase in the second half of the year as guided,” Antal said on Friday

“We are also continuing to make encouraging progress at the Yakuplu North exploration target, with nine rigs currently on site having drilled 12 383 m as of the end of the first quarter.”