Anatolia Minerals

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Anatolia Minerals is about to bring its flagship Çöpler project located in Turkey into production. The company began exploring the region in 1996. In 2000 they formed a joint venture with Rio Tinto. Together with Rio Tinto, they discovered the Çöpler Gold Project, which hosts gold reserves and resources in excess of 6 million ounces and remains open. Anatolia purchased 100% of the project from Rio Tinto in 2004. In addition to the Çöpler Gold Project, Anatolia holds additional exploration licenses on almost 300,000 hectares throughout Turkey.

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Construction for the initial oxide phase at Çöpler is fully permitted and funded with the first gold pour slated for the 4th quarter 2010. Total production will average 175,000 gold ounces and 150,000 silver ounces annually with cash costs of $260 per ounce after ramp up.

Oxide Production & Economics (100%)

    * 175,000 avg ozs/year gold and 150,000 avg ozs/year silver
    * Initial oxide mine life 8 years
    * LOM cash costs – $260 per ounce gold
    * CapEx ~$190 Million
    * Annual After Tax Cash Flow – LOM @$900 Au $90 million
    * Additional tax incentive credits

Anatolia is first developing a heap leach operation for the near-surface oxide ore, taking advantage of lower capital costs, operating costs and development risk. Work is also underway to develop a plan for the large, underlying sulfide resource.  There are a total of 6.3 million gold ounces in the resource category, including 2.8 million ounces of proven and probable reserves. More than half of those resource ounces are in the sulfide ore, so a sulfide expansion operation could significantly boost overall production at Çöpler. Çöpler remains open in virtually every direction.

Gold Reserves & Resources (100%)

    * Global Resources: 6+ million ozs all categories
    * Oxide Reserves: 2.2mm ozs@ 1.65 gpt
    * Add'l Oxide Resources: 0.6 mm ozs @0.77 gpt
    * Sulfide Resources: 3.2 mm ozs@ 1.73 gpt
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Anatolia controls 95% of the Çöpler Gold Deposit, with Calik Mining owning the remaining 5%. Calik also has the option to purchase an additional 15% for

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Cevizlidere is a copper-gold project located in Turkey. In April 2002, Rio Tinto entered a joint venture with Anatolia on Cevizlidere.  In 2006 Rio Tinto took over the project as "Operator", however, 2 years later the agreement was terminated and Rio Tinto didn't achieve its earn-in. Anatolia now owns the property and they are looking to advance the project through a joint venture with Calik.

Financials and Production

At the end of Q2 2010, Anatolia had $46 million in cash and $80 million in debt.

138 million basic shares outstanding

157 million fully diluted

Production is ramping up later this year. If Anatolia develops the sulfide resource then you can see how much production will increase.


Anatolia is one of the least complex companies reviewed here on Right now it is in the process of transitioning from an explorer to a producer. Their flagship Çöpler project has a tremendous amount of upside potential, assuming that the sulfide resources are mined. The oxide ore alone is going to produce 175,000 oz per year at an extremely low cash cost of $260 per oz. If Anatolia can hit these figures then the company is going to be a cash flow machine.

Calik has the option to purchase an additional 15% in Çöpler, so Anatolia will only be receiving 80% of the overall production from the mine. It seems that Anatolia gave up big interest in the project to Calik, but Calik is a major player in Turkey so I think in the long term this was a smart move.

Let's talk a little about valuation. Low cash cost gold miners are going to trade at much greater premiums than average cost producers. Look at EGO for example, they don't produce as much gold per year as some of the large cap miners do, however they have a higher market cap just because their margins are so great. Most companies are struggling to produce gold at $450 per oz, so when you have Anatolia talking about $260 per oz then you are going to have to factor that into share valuation.

If you take the sulfides out of the equation, then Anatolia is still going to be producing 140,000 oz per year(their 80%) at $260 per oz. If they can actually hit these figures then the shares are probably 50% undervalued(currently at $6). If you factor in the 3 million oz of sulfides then Anatolia could be worth $3 billion. But remember, this is a company that isn't in production, so there are still risk involved. Things look great for them on paper, but that doesn't mean it will translate into actual results

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