Iran – great potential thwarted leaving missed opportunities

first_imgPersian Gold’s interim results for the six month period to June 30, 2009 show good exploration success has been achieved in Iran. The Chah-e-Zard gold discovery is believed to be commercial and Dalli could potentially be a small copper/gold mine. However, further progress and development has been frustrated by inaction on behalf of the authorities. As a result, Persian Gold is looking to examine other opportunities and strategic directions.John Teeling Chairman of Persian Gold commented: “The geology of Iran remains very attractive. Accessing the opportunity in Iran was the strategy behind setting up Persian Gold. Despite some considerable success on the ground, we have found it difficult to progress projects due to bureaucratic delays. Persian Gold is committed to Iran. We are examining other opportunities available to best serve the Company and shareholders, while continuing to address the problems of operating in Iran.“Iran is a beautiful country with outstanding geological potential. The logic in establishing Persian Gold in 2004 was to take advantage of the opportunities. The geopolitical situation facing Iran – sanctions, Middle East politics, and lack of understanding – meant that few, if any, Western mining companies would venture into the country. The founders of Persian Gold, Irish and Iranian, were experienced international operators and had no political baggage. This gave us a major early-move advantage. “The strategy worked very well in the early years. Persian Gold got every help from the Iranian Embassy in Dublin and from the geological and mining organisations in Iran. Persian Gold established a top class technical team in Iran. We had two quick discoveries, both joint ventures with local Iranians; Chah-e-Zard, a gold oxide resource, and Dalli, a copper/gold porphyry. Grass roots gold exploration at Takestan obtained good first phase exploration results and then ran into opposition when we wanted to move to the trenching/drilling phase. “But, our experience in the past 18 months has been frustrating. A detailed application to the Ministry of Mines for a Discovery Certificate on the Chah-e-Zard gold/silver discovery has lain dormant, although it has passed through various committees for technical and economic review. No explanation has come from the authorities. Under the relevant Mining Law, the authorities must rule on our application. Persian Gold staff have completed the necessary technical work prior to lodging a Discovery Certificate application for the Dalli copper/gold resource, but under the current circumstances, there is little point in submitting the application. Compounding the problem is the fact that visas are no longer available from the Iranian Embassy in Dublin. Again, no explanations are forthcoming.”He went on to explain the company’s logic in selecting Iran. “The country is very big, stretching over 2,000 km. It is seriously underexplored but thought to contain significant percentages of the world’s gold, copper, zinc and other metals. By bringing new thinking and new technology to the country, and by recruiting top quality internal staff, we hoped to make discoveries. In looking for gold, we applied the knowledge gained from discovering and developing gold mines in clay/alunite/silica minerals in the Andes. We employed satellite imagery in seeking exploration sites and used new interpretation techniques to evaluate findings. It worked. Our experience of gold mining in Africa enabled us to model and evaluate the Chah-e-Zard deposit, where we drilled over 40 holes to outline an oxide resource of at least 160,000 oz of gold and 1 Moz of silver. We know how to build and operate tank leach gold mines. We believe Chah-e-Zard is commercial. “Our initial focus was on early stage gold exploration but we soon realised that Iran could and should contain very large copper gold porphyry deposits. Our first target was Dalli. This is a good and valuable deposit, but it is not the goal, it is not big enough. We looked at others, including Shadan in the East, but we have not found a big resource. Applying state of the art analytical/evaluation techniques added value to both resources. Dalli could be viable as a small gold/copper mine.  “We had excellent cooperation in Iran at local and national level. Individuals, state organisations, and even a bank, brought particular projects. We signed Memoranda of Understanding with a bank, a state mining company and with some local mining groups.  “For the past 18 months, we persevered in our chosen strategy in Iran, though unable to make any progress with the authorities. We kept our top quality geological team together, we continued to examine new projects, and we pushed for answers to our application. It is unsatisfactory to report that we have made no progress and have received no explanations.”   Facing reality, Persian Gold’s board will continue to monitor opportunities in Iran but is cutting costs as far as possible. Unfortunately, some staff have lost their jobs. In recent months, the company has conducted preliminary investigations into the mineral potential in Armenia, Azerbaijan, Kazakhstan and Tajikistan and is now focusing on grass roots gold opportunities. These countries have large Persian/Azari-Turkic speaking populations.  Its Iranian staff can work in these places.“We have identified two specific minerals which we believe have strong long term fundamentals.The board is examining exploration opportunities in these minerals. Early developments are expected.The skills, expertise and contacts of directors and staff extend into hydrocarbons.For some time, we have been looking at opportunities to partner with local Iranian groups who have obtained exploration concessions. Iranian oil operates on a different regime to minerals so foreign investment is taking place.To date, the returns offered make financing difficult.Outside of Iran, we have been offered and are examining exploration projects in both gas and oil. If we remain stalled in Iranian minerals, then such projects provide alternatives.“The geology of Iran remains as attractive as ever. We are striving to find out why Persian Gold is not making progress with the authorities. If we can identify the problems, we will fix them.”last_img

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