Preliminary Estimate of Mineral Resources Karakartal Project, East Central Turkey

149 Pages·2009·2.68 MB·English

by  Mike Lechner

Preliminary Estimate of Mineral Resources
Karakartal Project, East Central Turkey

Prepared for

Anatolia Minerals Development Limited
10333 East Dry Creek Road, Suite 240
Englewood, CO 80112

Prepared by

Michael J. Lechner, P. Geo.
Resource Modeling Incorporated
124 Lazy J Drive
P.O. Box 295
Stites, ID 83552
July 31, 2009
Karakartal Project
East Central Turkey

Table of Contents

Section......................................................................................................Page

1.0 SUMMARY................................................................................................................1
2.0 INTRODUCTION.......................................................................................................5
3.0 RELIANCE ON OTHER EXPERTS...........................................................................6
4.0 PROJECT DESCRIPTION AND LOCATION............................................................7
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY....................................................................................................10
6.0 HISTORY ................................................................................................................11
7.0 GEOLOGICAL SETTING........................................................................................13
7.1 Regional Geology.......................................................................................13
7.2 Local Geology.............................................................................................14
8.0 DEPOSIT TYPES....................................................................................................17
9.0 MINERALIZATION..................................................................................................18
10.0 EXPLORATION.......................................................................................................19
11.0 DRILLING................................................................................................................20
12.0 SAMPLING METHOD AND APPROACH...............................................................22
13.0 SAMPLE PREPARATION, ANALYSES AND SECURITY.....................................25
13.1 2001 YAMAS/Rio Tinto Sample Preparation and Assaying Procedures25
13.2 2008 Anatolia Sample Preparation and Assaying Procedures...............25
14.0 DATA VERIFICATION..............................................................................................28
15.0 ADJACENT PROPERTIES.....................................................................................32
16.0 MINERAL PROCESSING AND METALLURGICAL TESTING..............................33
16.1 Introduction.................................................................................................33
16.2 Summary Findings......................................................................................34
17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES.........................38
17.1 Sample Data................................................................................................38
17.2 Geologic Data..............................................................................................38
17.3 Topographic Data.......................................................................................38
17.4 Bulk Density Data.......................................................................................41
17.5 Assay Statistics..........................................................................................41
17.6 High-grade Outliers....................................................................................48
17.7 Compositing................................................................................................51
17.8 Geologic Framework..................................................................................51
17.9 Grade Envelopes ........................................................................................54
17.10 Variography.................................................................................................56
17.11 Block Model Setup......................................................................................59
17.12 Grade Estimation........................................................................................60
17.13 Grade Model Validation..............................................................................61
17.14 Resource Classification.............................................................................66

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17.15 Conceptual Pits...........................................................................................68
17.16 Resource Tabulation..................................................................................68
18.0 OTHER RELEVANT DATA AND INFORMATION..................................................72
19.0 INTERPRETATION AND CONCLUSIONS.............................................................73
20.0 RECOMMENDATIONS...........................................................................................75
21.0 REFERENCES........................................................................................................78
22.0 DATE AND SIGNATURE PAGE.............................................................................79
23.0 ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON
DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES ...................83

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List of Figures ..............................................................................................................Page

Figure 4-1: General Location Map..............................................................................................7
Figure 4-2: Physiographic Map of Turkey..................................................................................8
Figure 4-3: Map of Anatolia Exploration Licenses.....................................................................9
Figure 7-1: Regional Geologic Map..........................................................................................14
Figure 7-2: Local Geologic Map...............................................................................................16
Figure 11-1: Karakartal Drill Hole Locations..............................................................................21
Figure 13-1: 2008 ALS Chemex Sample Preparation.................................................................27
Figure 14-1: Copper Standard #233 Performance.......................................................................28
Figure 14-2: Gold Standard #233 Performance...........................................................................29
Figure 14-3: Original vs. Duplicate Gold Samples......................................................................30
Figure 14-4: Original vs. Duplicate Copper Samples..................................................................30
Figure 16-1: Location of Metallurgical Samples.........................................................................33
Figure 17-1: Gold Assay Histograms..........................................................................................43
Figure 17-2: Copper Assay Histograms.......................................................................................44
Figure 17-3: Silver Assay Histograms.........................................................................................45
Figure 17-4: Cumulative Probability Plot – All Au Assays........................................................49
Figure 17-5: Cumulative Probability Plot - Diorite Au Assays...................................................49
Figure 17-6: Cumulative Probability Plot - All Cu Assays.........................................................50
Figure 17-7: Cumulative Probability Plot - Diorite Cu Assays...................................................51
Figure 17-8: Block Model Lithologic Model - North-South Section..........................................54
Figure 17-9: Block Model Lithologic Model – NW-SE Section.................................................54
Figure 17-10: Perspective View of Au Grade Envelope Looking NE..........................................55
Figure 17-11: Perspective View of Cu Grade Envelope Looking NE...........................................56
Figure 17-12: Down-hole Gold Correlogram................................................................................57
Figure 17-13: Down-hole Copper Correlogram............................................................................57
Figure 17-14: Omni-directional Gold Variogram..........................................................................58
Figure 17-15: Omni-directional Copper Variogram......................................................................58
Figure 17-16: Gold Swath Plot - Eastings.....................................................................................63
Figure 17-17: Gold Swath Plot - Northings...................................................................................63
Figure 17-18: Gold Swath Plot - Elevations..................................................................................64
Figure 17-19: Copper Swath Plot - Eastings.................................................................................64
Figure 17-20: Copper Swath Plot - Northings...............................................................................65
Figure 17-21: Copper Swath Plot - Elevations..............................................................................65
Figure 17-22: Copper Grade Tonnage Curves...............................................................................70
Figure 17-23: Gold Grade Tonnage Curves..................................................................................71

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List of Tables................................................................................................................Page

Table 1-1: Karakartal Mineral Resources...................................................................................2
Table 4-1: Anatolia Exploration Licenses..................................................................................8
Table 11-1: Karakartal Drilling Summary.................................................................................20
Table 12-1: Relevant Karakartal Copper Composites................................................................23
Table 12-2: Relevant Karakartal Gold Composites....................................................................24
Table 17-1: Collar Elevations vs. Topographic Surface............................................................40
Table 17-2: Specific Gravity Values..........................................................................................41
Table 17-3: Gold Assay Grades by Select Lithologic Units......................................................46
Table 17-4: Gold Assay Grades by Select Alteration Units.......................................................47
Table 17-5: Copper Assay Grades by Select Lithologic Units...................................................47
Table 17-6: Copper Assay Statistics For Select Alteration Units..............................................48
Table 17-7: Block Model Lithologic Codes...............................................................................53
Table 17-8: Block Model Extents...............................................................................................59
Table 17-9: Block Model Items..................................................................................................60
Table 17-10: Au and Cu Grade Estimation Parameters...............................................................61
Table 17-11: Global Bias Check..................................................................................................62
Table 17-12: Resource Categories................................................................................................67
Table 17-13: LG Conceptual Pit Parameters................................................................................68
Table 17-14: Global Block Model Inventory...............................................................................69
Table 17-15: Resources Inside of LG Pits Using 0.5 g/t AuEQV Cutoff....................................70

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1.0 SUMMARY

Resource Modeling Inc. (RMI) was retained by Anatolia Minerals Development
Limited (Anatolia) to prepare an estimate of Mineral Resource’s for their Karakartal Project,
which would comply with Canadian National Instrument 43-101 standards. The Karakartal
project is located in east central Turkey between the towns of İlliç and Kemaliye, near the
village of Kabatas. The purpose of this report is to summarize the results of RMI’s site
visit, review the available data, describe the construction of the preliminary resource
model, tabulate Mineral Resources and to provide a list of observations and
recommendations.

The Karakartal project consists of four Turkish mineral exploration licenses totaling
about 5,533 hectares that are owned by Anatolia. The author has not verified the validity
of Anatolia's exploration licenses.

Karakartal is one of many intrusive hosted copper-gold systems that occur in this
region of Turkey. A variety of exploration activities have been carried out including surface
mapping, surface soil and rock chip sampling, various geophysical methods (e.g. induced
polarization and magnetics), petrographic studies, remote sensing, and two drilling
campaigns.

The author performed a site visit, reviewed drilling, logging, sampling, and assaying
practices. The performance of Anatolia’s quality assurance-quality control program was
reviewed by the author prompting several recommendations. A subset of the electronic
database was audited and verified by the author. A geologic model was constructed by
the author based on an interpretation (reviewed by the author) by Anatolia’s project
geologist (Deniz Atmiş). Gold and copper grade envelopes were constructed around drill
hole intercepts and used to control the estimate of block model grades. The estimated
block grades were validated by the author using visual and statistical methods. The block
grades were categorized into Indicated and Inferred Mineral Resource categories using
mineralized continuity that was based on drill hole grades and variography ranges along
with the number of drill holes that were used to estimate grade. The author generated a
series of conceptual pits using various price and cost parameters. The tonnes and grades
of blocks inside of the base case conceptual pit form the basis for Mineral Resources at
Karakartal. Table 1-1, shown on the next page, summarizes the Indicated and Inferred
tonnes, grade, and contained metal content inside of the base case conceptual Lerchs-
Grossmann (LG) pit using a 0.24% copper equivalent cutoff grade that was based on a
recoverable copper and gold metal price ratio where copper equivalent: CuEQV = Cu +
(Au * 0.4868), with copper grade expressed as a percentage and gold grade in grams per
metric tonne (g/t). Gold and copper prices used for the conceptual base case LG pit were
$750/ounce and $2.00/pound, respectively. Recovery rates used in the various LG cases
for gold and copper were 81% and 91%, respectively.

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Table 1-1: Karakartal Mineral Resources

Indicated Resources Inferred Resources
Tonnes Cu Lbs Au Ozs Tonnes Cu Lbs Au Ozs
Cu (%) Au (g/t) Cu (%) Au (g/t)
(000) (000) (000) (000) (000) (000)
13,753 0.29 0.46 87,904 203 17,758 0.22 0.32 86,105 183

Based on a thorough review of the current drill core assay data, the Karakartal
deposit appears to be a relatively low to medium-grade gold-copper porphyry type of
deposit. Within the currently recognized mineralized system at Karakartal, copper and
gold grades tend to range between 0.30 to 0.50% and 0.50 to 1.0 g/t, respectively. The
geometry of the primary host rock (potassic altered diorite) is somewhat limiting along
strike to the southeast but remains open and essentially untested along strike to the
northwest. The mineralized system currently identified by drilling also appears to be open
at depth.

Additional mineralization would improve the economic viability of the Karakartal
project and should be investigated. The Karakartal deposit remains open along strike to
the northwest and also down-dip. In addition to the possibility of adding tonnage to the
currently recognized Karakartal mineralization by drilling along strike, several nearby
geophysical anomalies may represent similar mineralized systems. One of these targets is
located about one kilometer west of the Karakartal deposit and was identified by the Yeni
Anadolu Mineral Madencilik Sanayi Ticaret Ltd. Sti. (YAMAS) - Rio Tinto joint venture
(2000).

Anatolia should prepare a drilling program that would trace the currently recognized
Karakartal mineralization northwesterly from the last “row” of mineralized drill holes. The
cost for such a program would be based on the number of holes/meters drilled. RMI
believes that a minimum of 5-10 holes would be required. The holes should be prioritized
so that subsequent holes would be contingent of the results of earlier ones. RMI’s
estimate for such a program is approximately US $1,000,000, depending on the actual
number of holes drilled, the amount of site preparation required, and assaying costs This
estimate is based on drilling ten holes each averaging between 400 to 500 meters in depth
or a total of about 4,000 to 5,000 meters.

All of the YAMAS/Rio Tinto joint venture geophysical anomalies should be
examined in the field. Older geochemical data may need to be bolstered by collecting
additional samples (i.e. stream silt, soil samples, rock chips, trench samples, etc.).
Geologic field mapping may reveal favorable alteration assemblages that along with
supporting geochemical data may represent viable drill targets. Again the costs for such a
program are highly variable and dependent upon an analysis of the existing data as to how
much more data needs to be collected or whether there is a strong enough indication of
mineralization to warrant a drilling program.

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The author also recommends that the topographic base map for the Karakartal
project be updated prior to undertaking any scoping level or pre-feasibility studies. The
current topographic data were obtained from large scale Turkish military maps which tend
to be somewhat generalized and result in some uncertainty in the estimate of pit tonnage.

The previous recommendations were made in order to determine the viability of
increasing the overall resource base of the Karakartal project. The following
recommendations represent “best practice” methods that should be undertaken by
Anatolia:

• Developing a new drill hole database using “standard” relational database
methods and programs (e.g. Microsoft Access)

o Segregating various data types into their own tables using the drill
hole name and/or down-hole depths as the “relational” component

o Generating separate tables for collars, surveys, assays, QA/QC
samples, lithology, alteration, oxidation, density, metallurgy, etc.

• Validating the drill hole database by checking the records against the
“original” data including collar locations, down-hole surveys, assays, and
geology.

• Comparing surveyed drill hole collar locations against topography noting
and adjusting holes with significant differences.

• Using non-magnetic down-hole survey tools in geologic terrains known to
have abundant magnetite (e.g. Maxibore tool).

• Improving quality assurance/quality control (QA/QC) procedures
o Inserting “blanks” into the assay stream at a higher frequency of 1
blank for every 20 samples

o Selecting 2 or 3 appropriate certified standards which have grade
ranges suitable for the deposit being sampled (e.g. 1 low-grade, 1
medium grade, and 1 high-grade). Randomly inserting standards at
a frequency of 1 standard for every 20 samples

o Closely monitoring the results of the blanks and standards by plotting
their grades (Y-axis) versus time or batch number (X-axis). Having
the lab re-assay all samples associated with any failed control
sample where failure is defined as a sample that is above or below 2
standard deviations from the certified value.

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o Do not average original and duplicate assays as this has a tendency
to "smooth" the grade distribution and possibly lower the inherent in
situ variability of the data.

o Inserting duplicate samples (e.g. quarter core or duplicate reverse
circulation (RC) sample) at a frequency of 1 duplicate for every 50
regular samples.

o At the end of the assay campaign submitting at least 5% of the pulps
that were prepared and assayed by the primary lab to a secondary
commercial lab for “check assaying”. The samples can be selected
randomly or by selecting one third as waste/low-grade, a third with
moderate grade and a third as high-grade.

• Maintaining an undated electronic interpretation of geology (lithology,
alteration, etc.) based on cross sections and level plans.

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2.0 INTRODUCTION

This report was prepared for Anatolia. The report was prepared to provide Anatolia
with a record of RMI and AMMTEC’s observations, opinions, and results of various
modeling efforts.

RMI would like to thank a number of key individuals including Andrew Kaczmarek,
Firuz Alizade, Deniz Atmiş, Berk Eralp, Kazim Yilmaz, Seda Çağatay, Yonca Yildirim
Albayrak, and Hakan Yandimata for all of their help in obtaining data and other information.

RMI obtained various data and historical reports from a number of Anatolia
personnel. Mr. Michael J. Lechner, President of RMI is responsible for all sections of this
report except Section 16, which is the responsibility of Mr. Hamid Sheriff of AMMTEC Ltd.
(AMMTEC).

Mr. Lechner visited the Karakartal project site during December 12-16, 2008. The
purpose of the site visit was to examine available drill core, review drill logging procedures,
inspect accessible mineralized exposures, review sampling methods, sample security
procedures, and to interview various staff members regarding various aspects of data
collection. While on site the author also began data validation checks on the provided
electronic drill hole data.

Mr. Sheriff from AMMTEC did not personally inspect the Karakartal project site
because there was little for him to gain from a site visit at this stage of the Karakartal
project. He did however receive drill core samples from the owners of the property and
conducted various metallurgical tests at AMMTEC's facilities which are located in western
Australia (see Section 16).

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