23rd Feb 2015 09:09
LONDON (Alliance News) - Stratex International PLC Monday saw its shares drop after it said heavy rains had delayed key parts of the construction project at the Altintepe gold project in northern Turkey and completion is now scheduled for late May, while its environmental approval for the site is also being challenged.
In a statement, the company said heavy rain over the past two months had delayed the heap leach pads in particular, although Phase 1 excavation and engineering for the pads are now more than 90% complete.
It added that the foundations for the crusher area have almost been completed and installation of the primary jaw crusher, secondary and tertiary cone crushers are in progress. Foundations and installation of equipment for the ADR plant have been completed and the office buildings and laboratories are now built.
Stratex is free-carried to production through its joint-venture partner Bahar Madencilik on the project and will receive 20% net cash-flow during an initial payback period and 45% subsequently.
Stratex said Altintepe Madencilik has advised that two challenges to the original Environmental Impact Assessment approval have been lodged with the Administrative Courts. One challenge is by a group of local people and one by a group known as The Chamber of Engineers.
"The challenges have been addressed to the Ministry of Environment and Urban Planning, not to Altintepe Madencilik. The challenges have been refuted by the Ministry but, to remove any uncertainty, the JV Partners felt it necessary to join the dispute and seek the overturn of the cases," Stratex said.
"The due legal process now has to be followed and the court has requested expert opinion before deciding how best to proceed. In the meantime, Bahar has advised that construction is not being delayed by these issues and the JV partners continue to work closely with the villagers and other local people," it said.
Altintepe Madencilik has also advised Stratex that it has sought to overturn the exclusion of a small part of the licence that overlies the Kayatepe Zone from the currently permitted area which was based on the identification of minor items of archaeological interest in the area during the original EIA study. The court has appointed experts to review the evidence and a decision is awaited, it said.
"Any decision will have no impact on the current mine development and project economics, which are based on the Camlik East Zone and Camlik Zone, with an expectation of then extending the mine development to the Extension Ridge Zone," Stratex said.
"Bahar and the operating JV company, Altintepe Madencilik, have continued to make sound progress with the construction of the mine. However, following very difficult weather conditions during December and January, it is now clear that completion will not be achieved until at least May. In the meantime two groups have filed law suits against the Ministry that approved the original EIA, contesting some elements of the EIA. The challenges have not been directed at Altintepe Madencilik but our JV partners are closely following the process with a view to minimizing the effect of the cases," Chief Executive Bob Foster added.
Stratex International shares were down 8.9% at 1.80 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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