Gediktepe- August 2019

The Gediktepe Project is located in Balıkesir Province, about 370km west of Ankara and 190km to the south of Istanbul. Gediktepe is a polymetallic orebody that contains economic values for gold, silver, copper, and zinc.

On July 17, 2019, Alacer announced the sale its 50% non-operating interest in the Gediktepe Project to its joint venture partner Lidya Madencilik Sanayi ve Ticaret A.S. (“Lidya Mining”). As consideration for the sale of its 50% equity interest, Alacer will receive:

  • 10% Net Smelter Return (“NSR”) on all oxide ore production
  • 2% NSR on all sulfide ore production
  • Cash consideration of US$10 million as various development and production milestones are met

The sale of Alacer's equity interest in the Gediktepe Project and the retention of an NSR allows Alacer to maintain low-risk commensurate economic exposure to the Project’s success. Gediktepe is a high-quality development asset with attractive returns. However, the asset’s scale, non-operatorship position and majority base metal ore composition, resulted in the asset becoming secondary to Ardich in our project development sequencing. The transaction will enable our joint venture partner to advance the development of Gediktepe at an accelerated rate, providing both parties with near-term, attractive economic exposure to the asset.

In the event Lidya abandons the Gediktepe Project at any stage, Alacer will retain an option to regain a 100% equity interest in the Project for no additional consideration. In the event first production at Gediktepe does not occur within 10 years of closing the transaction, Alacer retains the right to regain its 50% ownership interest in the asset in exchange for relinquishing its NSR.

Transaction completion is subject to receipt of all customary regulatory approvals and satisfaction of completion of all closing conditions.

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