Mason Res Corp MSSNF

Dec. 14th Minesite Article

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December 14, 2006 Mediterranean Resources Has High Hopes For Turkey By Rob Davies Turkey is a long way from Vancouver and Peter Guest, president and chief executive of Mediterranean Resources, finds that European investors are more open to the idea of exploring there than his shareholders back home. That is the main reason why C$5million of the C$6.6million it raised in a fund raising in February this year came from Europe. He says it’s not that North Americans don’t like Turkey; it’s just that they feel more comfortable investing in America. Nevertheless, on the strength of the exploration results so far it looks as if Turkey is becoming a fashionable exploration address. Mediterranean Resources has two very promising prospects in north eastern Turkey in the province of Artvin close to the Black Sea. Both were former Teck Cominco properties that benefited from $4million of exploration expenditure in the nineties. This work resulted in resource estimates of about half a million ounces of gold at each but neither were 43-101 compliant. The company has announced in the last few days that it has fulfilled the expenditure requirements of the option a year early by spending the required US$2 million on exploration and issuing Teck Cominco with 2.78 million shares as settlement for the final option payment It has focussed its attention first on the Tac property this year and has just completed a 15,000 metre drill programme of which 10,000 metres was diamond drilling. The first results from drilling at the T-6 Valley and Karsibayir mineralised zones are now to hand and they are mighty encouraging. One hole intersected 87.6 metres from near surface grading 2.03 g/t gold and included 56.54 g/t over 1.05 metres. Another intersected 33.3 metres at 1.95 g/t and included another bonanza grade over a short interval. These results are said to confirm that the deposit is amenable to either open pit or underground mining. More assay results are expected over the rest of the year and Peter is optimistic that by year end that he will have confirmed a half million ounce resource to 43-101 standards. Once that is complete he plans to move on to Corac, 10 kilometres to the north-east, and do the same again, and he has C$1.5million in the treasury to do that. In fact he should have more as the company has just announced that it is raising C$3 million from a private placement led by Loeb Aron and as Frank Lucas is a great fan there should be little problem. Both prospects are classed as high sulphidation epithermal gold properties and drilling so far has shown a variety of mineralisation ranging from long low grade intercepts to small, but high grade bonanza type intersections. Peter is ambivalent about how they should be mined. As an engineer he just wants to dig a hole and get the gold out and he is not overly concerned whether it is a smallish 2,000 tonne per day underground operation with a high margin or a 9,000 tonne per day open pit mine. Here of course lies a fundamental conflict for many operators. As miners they are seeking high margin, cash flow generating operations. But as promoters marketing their stories to investors they know what really counts are ounces in the ground. Peter doesn’t have to take that decision yet, but availability of finance will play a part in the selection process. A pre-feasibility study is some way off yet but he speculates that capital costs could range anywhere from $60million to $120million, depending on the mining system chosen. Preliminary metallurgical tests are being done and indicate that the free gold present could be recovered from gravity circuits and the rest from conventional flotation circuits. These could also be used to produce a copper concentrate as drilling is revealing significant copper values that Teck never spotted. Mediterranean Resource is only capitalised at C$11million, but if Turkish real estate starts to become fashionable then some Vancouver brokers will have to start looking at their atlases. Though I suppose these days they would rely on Google Earth.