KOZA GOLD

Press Release
KOZAL (BIST)

KOZA GOLD ANNOUNCES MINERAL RESOURCE ESTIMATION AT KARAPINAR PROJECT

Koza Gold is pleased to announce Mineral Resource Estimate at the Company’s Karapınar project in the
Çanakkale District in northwestern Turkey. The results stated herein reflects the studies that were
completed as of 31 December 2019.

Exploration Results and Mineral Resources have been prepared in accordance with the National Resource
and Reserves Reporting Committee of Turkey (UMREK Code) by Koza Gold’s competent persons and were
audited according to the Australasian Code for Reporting of Exploration Results and Mineral Resources,
2012 (JORC Code) by SRK Consulting (US) Inc.

The Karapınar Project is located 18 km southeast of Çanakkale between UTM coordinates 4343000N,
487500E and 4341750N, 489000E ED1950 Zone 35. The project is accessed from Çanakkale by following
village roads southeast for approximately 21 km to the village of Terziler. The project is located
immediately north of the Karapınar Village and lies within operation license 201001197 totaling
approximately 1,881 ha. This license is valid through May 7, 2022.

Figure 1 License and Drilling Area

1
The Karapınar project area was previously studied by foreign exploration companies. Koza acquired the
Karapınar license at auction in 2007. Historic underground workings that have been mapped by Koza. No
historical resource and reserve estimation have been identified.

The Karapınar Project is located on the Biga Peninsula, western Anatolia in Çanakkale Province. The
project is hosted by the Permian age Çamlıca Group locally composed of marble and calcschist of the
Salihler and Dedetepe Formations. Ophiolites of the Denizgören Formation have been faulted over the
Çamlıca Group along the Ovacιk thrust fault. The ophiolites which are associated with rifting were thrust
onto the continent during Cretaceous subduction.

The Karapınar Project has been identified as a low sulfidation, epithermal Au-Ag deposit based on
alteration mapping, mineralization style, mineral associations and textures. This mineralization includes
quartz vein/silica zones, a quartz stockwork zone and a quartz breccia zone. The main vein structure is an
epithermal quartz vein hosted in schist. It strikes approximately N20°E to N25°E and can be traced for
approximately 4.5 km. near the center of the vein is an east-west striking splay with a strike length of
approximately 500 m. Another vein structure is defined as silicification and hosted in metamorphic-
ultramafic contact. It strikes approximately N30°E to N35°E and can be traced for approximately 3 km.
North of the main silica zone, structures are hosted in the metamorphic rocks or in the contact zones
between volcanic and metamorphic rocks. The different quartz vein and silica zones contain vein breccia
and banded textures as well as chalcedonic and sugary quartz. Anomalous arsenic, silver, gold and
antimony values suggest that the surface outcrops are near the top of the epithermal system. The
resource area is located in this epithermal vein and vein breccia zone.

Koza started its diamond drilling program at the project in 2018 and completed the first stage in 2019.
Sixty-one drillholes with total of 20,031.2 meters were drilled and 12,380 samples were sent to ALS
GLOBAL and ARGETEST Laboratories to be assayed. Further exploration and drilling program will be
carried on in 2020.

2
Figure 2 Drillhole and Ore Body Surface Projection Map

A A’

Figure 3 Generalized cross section

A A’

3
Mineral Resource Estimate

Resource estimation has been completed by Koza Gold’s Mine Geology and Resource Department using
Datamine Studio RM. Two mineralized zones were modelled and include a total of 4,656 diamond core
samples from 40 drillholes.

Highlights

 The resource estimation study was completed as of 31 December 2019.

 Two different metallurgical domains were defined for the mineralization (transition and
sulphide)
 Preliminary metallurgical test works (fine and coarse bottle roll tests) were performed at
Koza Gold’s Kaymaz Metallurgy Laboratory.
 The cutoff grades were calculated using the following parameters:
o Gold Price: US$1500/oz,
o Process Cost: US$4.98/t
o Gold recovery: Transition – 65%; Sulfide – 30%
 The resources are contained with a pit shell using the same process costs and recovery as
shown above and a gold price of US$1600/Oz
 The estimated mineral resources of the Karapinar Project include 9.6 million tonnes at an
average grade of 1.16 gpt gold resulting in approximately 358 thousand ounces of gold as
at 31st of December 2019.

Figure 4 Block Model with Resource Pitshell

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Table 1 Resource Numbers

Resource Category Domain Cutoff Tonnes Au Ag Au koz Ag koz

( gpt) Mt ( gpt) ( gpt)
Transition 0.20 5.0 1.38 1.44 220 230
Inferred
Sulphide 0.43 4.6 0.93 1.22 138 183
Total Inferred 9.6 1.16 1.34 358 413

Notes:
1) UMREK (2018) and JORC (2012) definitions were followed for Mineral Resource.
2) An Independent Audit has been completed in accordance with JORC Code by SRK Consulting (US) Inc.
3) Mineral Resources are not Ore Reserves and do not have demonstrated economic viability.
4) Metal price assumption for cutoff grade calculation was US$1,500/oz. Au.
5) Resource pitshell was generated with the gold price of US$1,600
6) Tonnage and grade measurements are in metric units. Contained gold is reported as troy ounces.
7) Summation errors may be present due to rounding.

About Koza Gold

Koza Altin Isletmeleri A.S. (Koza Gold) engages in exploring and operating open pit and underground gold
mines. The company has operational mines located at Ovacik (Bergama-Izmir), Cukuralan (Dikili-Izmır),
Mastra (Mastra-Gümüşhane), Kaymaz (Kaymaz-Eskisehir) and Himmetdede (Himmetdede-Kayseri) all in
Turkey. Koza sends produced dore bars to be refined to refineries located in Turkey and sells refined gold
and silver at the Istanbul Precious Metals And Diamond Market . The company is headquartered in
Ankara, Turkey and is listed on the Istanbul Stock Exchange. (KOZAL:Istanbul).

The information disclosed herein covers Karapınar Project of Koza Gold at Çanakkale District. The
company holds 210 licensed areas as of 31 December 2019 throughout Turkey.

Competent/Qualified Person’s Statement

The exploration results and mineral resource estimation were prepared in accordance with the standards
set out in the 2018 Edition of the National Resource and Reserves Reporting Committee of Turkey
(UMREK) and in accordance with Australian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves dated December 2012 (the “JORC Code”). The UMREK Code is the accepted reporting
standard for the Capital Markets Board of Turkey (“SPK”).

Information relating to Karapınar exploration results in this document has been verified by, is based on
and fairly represents information compiled by or prepared under the supervision of Gökhan Çiçek,
Professional Member of YERMAM and Exploration Manager - WA of Koza Gold. Mr. Gökhan Çiçek has
sufficient experience that is relevant to the style of mineralization and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent Person as defined in the UMREK Code.

The Mineral Resource disclosed in this announcement was estimated by Mine Geology and Resource
Department of Koza and approved by Gökhan Bal, Professional Member of YERMAM, Member of AusIMM
and Mine Geology and Resource Manager of Koza Gold. Mr. Gökhan Bal has sufficient experience that is
relevant to the style of mineralization and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the UMREK Code and is Competent Person for
the purposes of the JORC Code.

The external review of Karapınar Project was completed and audited by SRK Consulting U.S. in accordance
with JORC Code.

5
Technical Disclosure
Mineral Resource was calculated as at December 31, 2019 and have been calculated and prepared in
accordance with the standards set out in the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves dated December 2012 (the “JORC Code”) and in accordance with
National Resource and Reserves Reporting Committee of Turkey (UMREK). The UMREK Code is the
accepted reporting standard for the SPK (Capital Markets Board of Turkey).

Mineral Resource that are stated herein were audited and reported in accordance with JORC Code by an
independent consulting company (SRK Consulting U.S.) and an internal audit process in accordance with
UMREK Code has been completed by Koza Gold’s fulltime employed competent persons. JORC and UMREK
Code are substantially similar.

The definitions of Ore Reserves and Mineral Resources as set forth in the JORC Code have been reconciled
to the definitions set forth in UMREK Definition Standards. If the Ore Reserves and Mineral Resources
were estimated in accordance with the definitions in the JORC Code, there would be no substantive
difference in such Mineral Reserves and Mineral Resources with UMREK Code.

Cautionary Note Regarding Mineral Resources and Mineral Reserves

The disclosure of Mineral Reserve and Mineral Resource information is based on the reporting
requirements of the UMREK Code. UMREK Code definitions of the terms “Mineral Reserve”, “Proven
Mineral Reserve”, “Probable Mineral Reserve”, “Mineral Resource”, “Measured Mineral Resource”,
“Indicated Mineral Resource” and “Inferred Mineral Resource”, are substantially similar to the JORC Code
corresponding definitions of the terms “Ore Reserve”, “Proved Ore Reserve”, “Probable Ore Reserve”,
“Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral
Resource”, respectively. Estimates of Mineral Resources and Ore Reserves prepared in accordance with
the JORC Code would not be materially different if prepared in accordance with the UMREK Code.

It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated
Mineral Resources with continued exploration. Investors are cautioned not to assume that all or any part
of the Mineral Resources will ever be converted into Mineral Reserves. There can be no assurance that
those portions of such Mineral Resources that are not Mineral Reserves will ultimately be converted into
Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.

A ‘Mineral Resource’ is a concentration or occurrence of material of intrinsic economic interest in or on the

Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic
extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource
are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources
are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured
categories.

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which tonnage, grade and mineral
content can be estimated with a low level of confidence. It is inferred from geological evidence and
assumed but not verified geological and/or grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes which may
be limited or of uncertain quality and reliability.

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Appendix 1 UMREK TABLE
The following tables are provided to ensure compliance with the UMREK Code (2018) edition requirements for the reporting of exploration results
and Mineral Resources.

The UMREK Code TABLE 1

SECTION 1 General
Assessment Criteria UMREK Code Explanation Commentary
Exploration Results Mineral Resources Mineral Reserves

Purpose of Report
 Report should include a cover page and a Table of Contents, including a list of • This document has been reported to meet the requirement of SPK
figures and tables. (Capital Markets Board of Turkey) for the companies that are listed at
 Indicate for whom the report is prepared, specify whether the purpose is a Istanbul Stock Exchange.
partial or full assessment or other purpose, what scopes of work were carried • The results that is stated in this press release reflect the studies that were
out, effective date of the report and what is left to do. completed as of 31 December 2019.
 The Competent Person must specify whether the document conforms to the • The document meets the requirement of UMREK Code.
UMREK Code. If a reporting standard or code other than the UMREK Code is
• The document is also prepared in accordance with JORC Code that is
being used, the Competent Person shall add an explanation of differences.
substantially similar to UMREK Code.

General Info on Project

 Summary explanation  Brief explanation of key  Brief explanation of • The Project is at the stage of scoping level. Advanced exploration and
of project scope (for technical factors that mining, drilling is still ongoing in the field and preliminary metallurgical studies
instance, historical have been considered. processing/beneficiation have been completed.
sampling, advanced and other key technical • At this stage of the development Koza has demonstrated continuity of
exploration, factors. the mineralization in terms of grade and structural.
conceptual, Pre- • Koza is considering the Karapinar project to be a heap leach operation
Feasibility or
Feasibility Study,
Mining schedule for a
future or ongoing
mining facility shall
include the geological
condition, deposit
type, commodity,
project area,
infrastructure and
business agreements.

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History
 Indicate the  Discuss the known or  Compare the known or • Koza acquired the Karapınar license at the auction in 2007.
background of the existing historical existing historical • Karapınar is previously studied by foreign exploration companies.
project and/or related Mineral Resource Mineral Reserve Historic underground workings have been mapped by Koza.
adjacent areas, include estimates, estimates and • No historical resource and reserve estimation have been identified.
known results (type, reconciliation for the performance statistics
quantity and actual production with past and current
development), former updates to reported operations, include
owners and changes resources/reserves their reliability and
for past exploration for past and current how they are related
and/or mining operations, and to UMREK Code.
activities. include their
reliability and how
 Quote references for all they are related to
data from other the UMREK Code.
sources.
 Transparent
description of former
achievements and
failures and explain
why the project
should now be
considered
potentially
economic.

Critical Plans, Maps,

Diagrams  Include and quote reference to all important, more detailed maps and all • All Plans, maps and diagrams have been prepared in in accordance with
related cadastral and other infrastructure properties, described in a site UMREK Code by Koza.
location map or map index and article. If the adjacent areas or urban areas
have a significant effect on the report, their location and their sections
containing joint mineral tenure must also be indicated on the maps. All
information taken from other sources must be referenced. All maps, plans and
sections indicated in this check list must be legible and should include
explanations, coordinates, coordinate system, scale bar and north arrow.
 Diagrams and illustrations must be readable, with notes and explanations
where necessary.

Project Location and  Explanation of Project location (country, province and closest town, coordinate • The Karapınar Project is located 18 km. southeast of Çanakkale between
Explanation systems and distances etc.). UTM coordinates 4343000N, 487500E and 4341750N, 489000E ED1950
 For each property, diagrams, maps and plans must be provided such that they Zone 35.
indicate the locations of mineral exploration/mining rights, any previous or • The project is accessed from Çanakkale by following village roads
current work, any exploration and all main geological characteristics. southeast for approximately 21 km to the village of Terziler.

8
Topography and Climate
 All issues related to  A topographic-  A detailed topographic- • The Karapınar Project is located in the Aegean sea cost, which has a
the mining project cadastral map with cadastral map. Where typical Mediterranean climate characterized by hot, dry summer months
(such as topography sufficient details to possible, weather and and warm, wet winter months.
and climate), issues assist evaluation of ground conditions that • The terrain in the this district is flat to rolling hills near Aegean Sea and
that could possibly eventual technical and must be mitigated, rises to approximately 350 m. amsl near Karapınar.
affect mining activities economic viability. particularly for difficult • There are no climate risks at the location
must be indicated and Known related climate ground conditions,
explained. risks must be dense vegetation and/or
• The topographic map used in this study was obtained by surveyors who
are full time employees of Koza.
 A general topographic- indicated. They are high-altitude areas.
cadastral map must be related to the UMREK
ready to support the Code.
above explanation.

Personal introduction in • The Project team under the direction of Exploration Manager Gökhan
projects and verification of  Visiting dates of the designated prospect, mine site, laboratories or relevant Çiçek were on the Project during the field seasons of between 2007 and
data infrastructure. 2019.
 Meetings with people responsible for the reported project, their areas of • Senior Resource geologist Gökhan Egehan and Mine Geology Manager
responsibility and project related experiences. Gökhan Bal who audited this study for resource estimate visited the field
 Visit to the project site, preparing a report that lists observations. in August 2019.
 What sections of the project are accessible for individual confirmation? • All data that were used in this report were prepared by Koza.
 Lists of data used or referenced when preparing public reporting.

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 SECTION 2 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Assessment Criteria UMREK Code Explanation Commentary
Exploration Results Mineral Resources Mineral Reserves

• -80 mesh stream sediment samples were collected along master streams
Sampling types  Sampling type, location and time, leading to the results to be reported, must be above and below the inflow of tributary creeks
indicated. Sampling types include stream sediment, soil and heavy mineral • Soil samples were collected using a regular grid spacing of 50 meters by 100
concentrate samples, trench and pilot pit results, rock breaking and channel meters
sample, drilling and boring, handheld XRF devices etc. Ground samples include • Surface mapping was completed at 1/25000, 1/10000, 1/1000 scales
previous works, mine dumps etc. Where possible, distance between samples • Rockchip samples selected chip samples collected at locations across the
must be indicated, and locations must be shown on coordinate maps, plans and width of exposed veins.
sections with proper scales. • Channel samples were collected on 1 m. lengths and were 5 cm deep by
using saw
• The IP-resistivity survey and ground magnetic survey were completed
• XRD sampling were taken from the drill cores
• Koza drilled core holes and collected samples from the drill cores.

Drilling techniques • Koza drilled PQ-HQ sized core holes using a diamond drilling.
 Drilling techniques may include core drilling, reverse circulation, percussion, • Drillhole spacing is between 25 m. to 100 m.
rotary auger, down-the-hole hammer etc. These should be indicated in the • Drill recoveries ranged from 80% to 100%.
report, and their details (e.g. core diameter) should be given. Measures taken to
keep sampling at a maximum level of recovery and quality assurance of the
samples must be indicated.

Drilling sampling • The drill core sample intervals marked by the geologists and are typically 1
 A detailed explanation must be given to indicate sampling is being properly m. length. Samples may be shorter or slightly longer than 1 m. to
recorded and results are being assessed. The report should particularly indicate accommodate changes in lithology.
if there is a relationship between grade and quality, acquired through sample
collection, and sample bias (for instance, preferential gain/loss of fine/coarse
material).

Logging Koza records drillhole data into the computer. The drill core was
 It must be confirmed whether the samples have been recorded with sufficient photographed prior to geological logging. Data captured during core logging
details to assist suitable Mineral Resource estimation, mining tests and included, rock types, structure, mineralogy, recovery and RQD. Core is stored
metallurgy tests, and it must also be indicated whether record keeping is at project site.
qualitative or quantitative. Core (or channel, trench etc.) photographs must be
attached.

Other sampling techniques • Core and exploration samples are held in the custody of Koza in a locked
 Sampling type and quality (for instance, cut channels, grab samples etc.) and vehicle, then in a locked core logging facility until being shipped via
the measures taken to ensure representative capability of the samples must be commercial trucking. This is industry best practice
indicated. By quoting reference to a coordinate system (to be indicated), precise
location and unique numbering of each sample must be ensured.

10
Sub-sample techniques and  The core was sawed lengthwise using a diamond saw, with half submitted
sample preparation  For sampling of drill core, it must be indicated whether sampling was taken for analysis and half retained for later reference. Samples submitted were
from cut or sawn or quarter, half or whole core. If sampling was done without a prepared at ALS Labs. İzmir and ARGETEST Labs. Ankara.
core, production pipes, sample or rotary split etc. and wet or dry split
procedures must be indicated. For all sample types, the nature, quality and
appropriateness of sample preparation techniques must be defined, and
quality- control procedures adopted at all sub-sampling stages to maintain the
representative capability of samples at a maximum level must be indicated.
 The measures taken to ensure representative capability of the material at the
place of sampling must be indicated. Appropriateness of the sample sizes to the
particle sizes of the material must be defined. A statement is advised with
regards to the security measures taken to ensure sample consistency.

Analysis data and • Analyses are done by independent laboratories, ALS Global and ARGETEST.
laboratory research  The type, quality and appropriateness of the assay and laboratory procedures ALS is a recognized independent laboratory, which operates internationally.
and whether the technique has been accepted in full or partially must be The laboratory has ISO 9001: 2008 accreditation and ISO / IEC 17025: 2005
indicated. Attention must be paid to how the presented assay results relate to accreditation for some analytical procedures. ARGETEST is a recognized
the estimated extractable metal or mineral content of the reserve. independent laboratory, which operates locally. The laboratory has TS EN ISO
 Sample preparation and analysis can be carried out by internal or independent / IEC 17025 accreditation and ISO 9001: 2008 quality management system
laboratories. The laboratories actually used for this must be defined in all accreditation for some analytical procedures.
reports. In any case, the accreditation of the laboratory (e.g., ISO standards, ISO • Drill samples from 2019 to the present were submitted for crushing and
9000:2001 and ISO 17025, TÜRKAK etc.) and actual procedures used, including pulverizing to ALS-Global Laboratory in Izmir.
use of random distribution, internal and external standard samples and  The following assay methods were used for all samples sent to ALS
monitoring procedures for blank analysis and systematic deviation must be Laboratories: fire assay gold analysis by a total assay method (Au-AA24).
taken into consideration. In particular, a short note must be added to indicate Multi-element analyses undertaken by four acid digestion via ICP-AES are
whether sample analyses, used to support resource estimation, have been considered total assay methods except where they exceed the upper
repeated by other laboratories. detection limit ( E-ICP61m).
Between March 2019 and June 2019 analyses were made in ARGETEST
(Ankara) laboratory. The following assay methods were used for all samples
sent to ARGETEST Laboratories: fire assay gold analysis by a total assay method
(AT-1 / FA 02). Multi-element analyses undertaken by four acid digestion via
ICP-OES are considered total assay methods except where they exceed the
upper detection limit ( AT-4 / GAR 05).

 If ALS global was used as main laboratory, then ARGETEST was used as
check lab. If ARGETEST was main laboratory Als Global were used as check
Lab..
 Laboratory visits are done regularly by Koza personnel.
Verification of the results •Industry standard certified reference materials and blanks were utilized in
 It is recommended that independent or alternative personnel confirm the order to check laboratory assay quality control.
selected intersection points and twinned holes, deflections or duplicate samples
•The QA/QC program includes CRM’s, blanks, preparation duplicates and field
are used.
duplicates and is acceptable according to industry standards. Overall relative
bias for the CRMs is within -+3 standard deviation.
•Samples have been analyzed by a secondary lab to control main laboratory.

11
Data location • Drillhole collars were located by Koza geologists using a portable GPS tool in
 A statement is required with regards to the quality and reliability of certainty of ED50 Zone 35. The collars were latered surveyed by the Koza surveyors using
surveys used to locate drill holes, trenches, mining works and other locations. GNSS GPS tool.
Quality and adequacy of topographic control should be explained, and site  Drillhole downhole surveys were conducted on all drillholes at 50 meters
plans should be given. The quality and adequacy of down-hole surveys should intervals.
be explained.

Data density and • A total of 61 drillholes totaling 20,031.20 m. have been completed in the
distribution  Data density must be  A statement must be given to indicate whether data project area.
given to report density and distribution is sufficient enough to • Based on the field observations, conditions and the description of the type
Exploration Results. ensure geological and grade or quality continuity for and geometry of the mineralized body, drill holes were angled between 22º
Mineral Resource and/or Reserve estimation to 90º from horizontal.
procedure and the applied categorizations, and if  The Project is at an early stage of development, the number of drillholes and
sample compositing has been made. the spacing are sufficient to define an Inferred Mineral Resource.
 With regards to the deposit type, it must be  There is sufficient sampling according to deposit type.
explained if sampling is sufficient to define the
mineralization.
Reporting Archives • All data are stored and validated within an electronic database. Drill data
 Primary data documentation, data input procedures, data confirmation, data are recorded by company staff and entered into a spreadsheet then loaded
storage (physical and electronic) must be provided to support report into the database program (DATASHED). Assays from the laboratory are
preparation. received and loaded electronically. Analysis certificates are available since
2018
Audits or Reviews  The resources were audited by SRK (US), Inc. according to the JORC code.
 Results of any audit or review of sampling techniques and data should be
presented and discussed.

12
 SECTION 3 Reporting of Exploration Results
(Criteria listed in the preceding sections also apply to this section.)
Assessment Criteria UMREK Code Explanation Commentary
Exploration Results Mineral Resources Mineral Reserves

• The project is located immediately east of the Karapınar village and the lies
Mining rights and land  Type, reference name/no., location and ownership, joint ventures, within operation license 20101197 totaling approximately 1881 ha.
ownership partnerships and similar agreements with third parties or material issues, • The Environmental Impact Assessment (EIA) report was approved
historical areas, wildlife or national park and environmental conditions, August,15,2017 for the project
conditions of other investment areas. • Part of the license area is in the catchment of the Atikhisar reservoir. The
 Security of the right of use at the time of reporting or reasonably expected to Atikhisar Reservoir is approximately 3.7 km. upstream from the project area.
be given, known obstacles preventing the right of operating on site. • The project area contains forest land and private properties.
 Layout plans of mining rights and ownership. Definition of a mine ownership
in a technical report is not expected to be a legal opinion; it should rather be
a brief and clear explanation of ownership, as perceived by the author.

Exploration works carried • All exploration work and drilling described in this report have been carried out
out by other parties  Acknowledgement and by Koza
appraisal of surveys
carried out by other
parties.

Geology • The project is hosted by the Permian age Çamlıca Group locally composed of
 Explanation of the nature, details and reliability of geological information marble and calcschist of the Salihler and Dedetepe Formations.
(related to rock types, structure, alteration, mineralization, and areas known •Ophiolites of the Denizgören Formation have been faulted over the Çamlıca
to be containing mineralization etc.). Explanation of geophysical and group along the Ovacık thrust fault.
geochemical data. Reliable geological maps and sections should be available • These rocks are capped by andesitic flows and agglomerates of the middle
to support comments. Eocene Akçaalan Formation.

Mineralogy /Mineralization • The Karapınar Project has been identified as a low sulfidation Au-Ag deposit.
 Definition, frequency, size and other characteristics of the minerals inside the • Karapınar mineralization includes three quartz vein/silica zones, a quartz
ore. Effect of the secondary and economically non-valuable minerals on the stockwork zone and a quartz breccia zone.
steps of beneficiating the main mineral and the variability of each significant • The main vein structure is an epithermal quartz vein hosted in schist.
mineral within the deposit should be indicated. • Other silica structures are hosted in the metamorphic rocks or in the contact
zones between volcanic and metamorphic rocks.
• The different quartz vein and silica zones contain vein breccia and banded
textures as well as chalcedonic and sugary quartz.
Data compositing
(accumulation) methods.  In exploration result  This report includes a mineral resource estimation.
reporting, weighted  Results of the exploration work has not been included in the report.
average techniques,
maximum and/or
minimum grade cut
(e.g. cutting of high
grades), cut-off grades
are generally

13
 important and must be
stated. In places where
composited
intersections yield
high- grade results
over short lengths and
low-grade results over
longer lengths, the
procedure used for
such compositing must
be specified, and some
typical examples of
such intersections
should be given in
detail. The Modifying
Factors used for any
type of reporting on
metal equivalents
should be clearly
indicated.

Relationship between
mineralization widths and  These relationships are  Drillholes have been oriented to be as close as possible to perpendicular to
intercept lengths particularly important the mineralization as possible.
when reporting
Exploration Results. If
the relative geometry
of the mineralization
to drill hole angle is
known, its nature
should be reported. If
it is not known and
only drill hole
dimensions have been
reported, this effect
must be clearly stated
(e.g. ‘drill hole length,
actual true width not
known').

Diagrams
 Where possible, if the  All required plans, maps and sections were included in the report by
maps, plans and Competent Person in accordance with the UMREK Code.
sections (scaled) and
charts of intersections
significantly clarify the
report, then they

14
 should be included for
any material survey
being reported.

Balanced reporting
 If it is not practical to  This report is prepared to announce mineral resource estimation results and
report in depth all does not include exploration results.
Exploration Results,
one should try to
report both low and
high grades and/or
widths, so that
Exploration Results will
be representative.

Other available exploration

data  If other exploration
data are meaningful • 123 drill core samples were taken from HQ-PQ sizes core holes for specific
and tangible, they gravity and moisture content.
should be reported as • For determination of mineral paragenesis, 19 drill core samples have been
follows (not limited to investigated and reported in 9 Eylül University Geological Engineering Faculty.
them): geological • Koza has conducted Terra Spec mapping of alteration zones to better
observations, understand mineralization type and distribution at 600 samples.
geophysical • 15 drill core samples have been investigated for petrography of lithological
exploration results, units at ARGETEST Labs.
geochemical • CFT Turkey and Planetary Australia conducted 18.2 km Pole-Dipole IP and
exploration results, 124.2 km ground magnetic surveys completed by Koza personnel.
bulk samples - size and
method of
development,
metallurgical test
results, bulk density,
underground water,
geotechnical and rock
characteristics,
moisture content,
potentially deleterious
or contaminating
conditions and
characteristics.

Additional works • Koza plans to conduct additional drilling program at northern and southern of
 Nature and dimension the mineralization development.
of the planned future
development (e.g.
additional

15
exploration).
Descriptions of
estimated
environmental
liabilities

16
 SECTION 4 Mineral Resource and Mineral Reserve Estimations and Reporting
(Criteria applicable to reporting groups as shown )
Assessment Criteria UMREK Code Explanation Commentary
Exploration Results Mineral Resources Mineral Reserves

Database integrity  Measures taken to ensure data are not corrupted between • Koza uses Datashed as database management software in order to
first collection of data and being used to estimate Mineral ensure that the data is not corrupted.
Resource, e.g., recording and database errors. Data • Koza employ database specialists under Exploration Manager who is
verification and/or validation procedures used. a competent person under UMREK.
• Audit compared consistency of sections and drillhole sample data.
• Audit compared assay results supplied from ALS Global &
ARGETESTand database.
• Database have been also independently reviewed by SRK Consulting
(U.S.), Inc. at the last quarter of 2019.

Geological interpretation
 Definition of geological model and the inferences made • The orebody has been defined using a nominal cutoff grade of 0.2 g/t
from this model. Estimation procedure used to ensure Au.
continuity of mineralization, and discussion of the • The bounding surface between the transition and sulfide material
sufficiency of the given database. Discussing alternative was generated using core photos, core logs and with the knowledge
interpretations and their potential impact on the of the project manager.
estimation • Drillhole and surface data is utilized while resource model is created.
• Extension and ongoing infill drillholes suggest that the mineralization
shaping interpretation is sufficient.
• Vein and vein brachia , S and Sb assemblages are guide for the Au
and Ag mineralization.
• There is no alternative model at this time.

Estimation and modelling

techniques  Nature and appropriateness of the applied estimation • Datamine Studio RM Version 1.4.126 was used to create orebody
techniques and key assumptions, including treatment of wireframes and grade estimation.
extreme grade values, compositing (included with length • Studio RM Advance Geostatistics module and MS Excel were used to
and/or density), interpolation parameters, maximum report statistical analysis.
projection distance from data points and the final area of • 2 different oxidation levels for the mineralization were defined as
the estimation. Interpolation refers to estimation transition and sulphide zones. A surface wireframe was created to
supported by sample data. Extrapolation refers to separate these two oxidation level and block model was divided into
estimation stretching beyond areal borders of sample data. 2 metallurgical domains using that boundary.
Validation refers to the existence of previous estimations
and/or mining production losses and whether Mineral
• Inverse power of distance squared (IPD2) was used for grade
estimation. Estimation conducted on the 2 different domains
Resource estimation is taking these data properly into
individually. IPD3 and NN estimations also calculated to make a
consideration. Assumptions made with regards to the
comparison.
recovery of by-products and other minerals which could
• Domains characterizes different mineralization zones which have

17
 possibly affect beneficiation of the ore. If block model different Au distribution and average grade. Extreme grades capped
interpolation is done, block size with relation to average for each domains separately. 6 g/t Au grade were used as cap value
sampling spacing and applied exploration. All assumptions for both zone. Outliers were defined using scatter plot, probability
used to establish selective mining units (e.g., non-linear plots and quantile analyses.
kriging) modelling. Validation process, the checking process
used, comparing model data with drill hole data, and use of • Koza conducted an investigation of sample lengths to determine the
reconciliation data, if any. compositing length. The sample length distribution has been plotted
 Detailed explanation of tonnage and grade estimation on frequency charts to analyze the distribution and aid in the
(section, polygon, inverse distance, geo-statistical or other designation of an appropriate composite length. It has been seen that
methods) and the methods used. Explaining how geological 88.9% of samples are 1 meter in length or less and 1 meter has been
interpretation was used to control resource estimation. chosen as composite length.
Discussing the basis of using or not using grade cutting or • An omni-directional search ellipse was used in 3 passes for
capping. If a computer method has been selected, interpolation. 50x50x50 meters ellipse was used for the 1st pass with
explanation of the program and parameters used. Geo- minimum number of 12 samples, 75x75x75 meters was used for the
statistical methods have multiple variations; therefore, 2nd pass with minimum 12 samples and finally a 100x100x100 meters
these need to be explained in detail. The selected method ellipse was used for the 3rd pass with minimum 10 samples. All
has to be justified. Geo-statistical parameters (including search passes are restricted as maximum 5 samples per drillholes.
variogram) and conformity to geological interpretation • As and S grades were also estimated into block model
need to be discussed. Experience from geo-statistical
methods applied to similar deposits must be taken into
• Parent cell estimation was utilized using cell dimensions of 10x20x10
in XYZ respectively. The blocks are orthogonal and have not been
account.
rotated. Cell discretization was used as a grid of 3x6x3 to ensure a
 Variation of length (along the layer/seam direction or the
more representative estimate. Domain control was also applied to
other way), plan width and upper and lower limits of
ensure appropriate sample selection during the estimates. Subcell
mineral resource as a sub-surface depth to the Mineral
sizes are 1 meter in all directions as selective mining unit (SMU).
Resource.
 All metals (or other components) to be treated (including • Block model verification has been undertaken by comparison of block
those deemed to be dump material) must be indicated. A grades to composite grades, comparison of different interpolation
statement must be added to indicate that there are no techniques (ID2,ID3,NN), creating swath plots in all directions and
other deleterious minerals that need to be separated or if reviewing section by section visually.
otherwise describe a mitigation plan

Metal equivalents or other

combined representation of  In any report containing reference to metal equivalents (or • There are no metal equivalent calculation at Karapinar project.
other multiple components other content equivalents), the following minimum data
must conform to these principles:
Individual assays for all metals included in the metal
equivalent calculation;
o Assumed commodity prices for all metals.
(Companies should declare the actual assumed
sales prices.) Discussion of the spot price is not
sufficient when declaring the price used for
calculating metal equivalent.)
o For all metals, metallurgical test results and
basis from which assumed recoveries have been
derived (metallurgical test study, detailed
mineralogy, similar deposits etc.);

18
 o A clear statement indicating it is the company’s
opinion that all the elements involved in metal
equivalent calculation have a reasonable
potential of recovery and sale; and
o Calculation formula.
 In many cases, the metal selected for equivalent based
reporting, should be the one that has contributed most to
the metal equivalent calculation. If this is not the case, a
clear explanation for choosing another metal must be
included in the report.
 Estimations of metallurgical recoveries for each metal are
particularly important. In many projects, metallurgical test
data may not be available during the Exploration Results
stage or may not be estimated with reasonable confidence.
 In general, overall metal recoveries are calculated on the
basis of a flowsheet showing the mass balance. This should
be indicated by the test work, and it should be shown that
results are related to the ore body in question and is not
just the sample treated.

Cut-off grades and

parameters  The basis of the applied cut-off grades or quality • Open pit resources are inside the pit optimization shell and are stated
parameters must be included (if possible, including the at a cut-off grade of 0.20 g/t Au for transition and 0.43 g/t for
basis of the equivalent metal formula). The cut-off grade sulphide due to different recovery values of the metallurgical
parameter can also be expressed as economic value per domains. The gold price is US$1500/oz, process cost of $S4.98/t and
block, instead of grade. gold recovery of 65% for transition and 30% for sulfide.

Tonnage Factor/In Situ Bulk

Density  Must indicate whether assumed or determined. If assumed, • Bulk density determinations are made on selected diamond drill
the basis of assumptions. If determined, the method used, samples. A total of 43 HQ sized samples were collected from 10
frequency of measurements, nature, size and drillholes. All the used samples for density determination are within
representation reliability of samples. the orebody.
• Initial determinations using Archimedes method were made. Core
was covered with wax to preserve pore space and the samples were
weighed in water and air.
• Outliers were taken out the data set and 2.43 g/cm3 has been
determined as initial density. This measurement has been considered
appropriate for using in the block model.

Mining factors or
assumptions  Appropriateness of the  Methods and assumptions • Only Open pit mining method is adopted at this stage when the
recommended mining made for converting the mineralization shaping, average grade and topography are
method and Mineral Resource into a considered.
mineralization type, Mineral Reserve (through • Internal and external mining dilutions is negligible quantity when the
minimum mining application of appropriate estimated block were considered and will be reconsidered after infill

19
 dimensions and internal factors, through drilling program.
(or external, if optimization or through • Detailed geotechnical and hydrogeological studies for pitshell area
applicable) mining preliminary or detailed haven’t been started yet at this stage
dilution to be indicated. design). Relevant design • A resource pit shell was used to contain the resource tonnage. The
It is not always possible issues, selection, nature and overall slope angles for resource pitshell were taken 420 as an
to make detailed appropriateness of mining assumption. Mining costs are Koza Gold’s current costs. The gold
assumptions related to parameters including pre- price is $1600/oz. and the gold recovery and process cost are listed
mining factors, when strip, access etc. and mining above and mining cost of US$ 2.3 m3
estimating Mineral method. Geotechnical
Resources. Basic parameters and
assumptions are hydrogeological regime (e.g.,
required to determine pit slopes, stope sizes,
reasonable prospects for dewatering methods and
eventual economic requirements etc.), grade
extraction. These would control and assumptions
include access issues made through drilling prior
(boreholes, inclined to production. Main
shafts etc.), geotechnical assumptions made and the
and hydrogeological Mineral Resource model
parameters (pit slopes, used for pit optimization (if
stope dimensions etc.), appropriate). Mining dilution
infrastructure factors, mining recovery
requirements and factors and minimum mining
estimated mining costs. widths used and the
All assumptions must be infrastructure requirements
clearly indicated. of the mining methods
selected. Historic reliability
of performance parameters,
if applicable.

Metallurgical factors or
assumptions  The proposed  The proposed flowsheet and • Preliminary metallurgical testwork were completed at Koza Gold’s
metallurgical process the appropriateness of these metallurgy laboratory.
and its appropriateness processes to the • Metallurgical samples were selected by resource geologist to be sure
to the style of mineralization of the that the samples are characteristic in terms of reflecting the
mineralization. It is not deposit. Whether the process mineralization.
always possible to make is unique or incorporates • Samples were taken domain bases and the samples are characteristic
detailed assumptions well-tested technology in lithology that lies in the wireframe, assay results (Au, As and S) and
related to metallurgical previously used on the type spatial distribution in the mineralization.
factors, when estimating of mineral deposit. Nature,
Mineral Resources. Basic quantity and
• Fine and coarse bottle roll tests were made with the reject samples.
assumptions are representativeness of the • Fine bottle roll tests suggest for transition and sulphide zones gold
required to determine metallurgical tests. Existence recovery of 79% and 37% respectively
reasonable prospects for of bulk samples or pilot-scale • Coarse bottle roll tests suggest for transition and sulphide zones gold
eventual economic test studies, and the recovery of 65% and 30% respectively.
extraction. Availability capability of these tests and • Coarse bottle roll test results were used for all recovery assumption
of metallurgical tests, test results to represent the (cutoff grade calculation and pitshell optimization).

20
 recovery factors, whole ore characteristics.
allowances for by- Metallurgical recovery and
product credits or any upgrading factors used
deleterious minerals or and their relevance to those
elements, infrastructure defined in test studies. All
requirements and assumptions and allowances
estimated processing for deleterious minerals or
costs can be given as elements affecting the
examples. All process or their variability
assumptions should be within the mine must be
clearly indicated. The indicated. Environmental,
exact definition of health and safety risks for
minerals, or the required each section of the flowsheet
assays to ensure and the planned mitigations
appropriateness of the to overcome these risks must
process, and all be detailed.
unwanted or possible  Tonnages and grades
by-products should be reported for Mineral
revealed, and Reserve, and whether they
appropriate process are related to the material
steps should be included delivered to the facility or to
in the flowchart. the resulting recovered
material, must be indicated.
Comments must be made
with regards to the
appropriateness of usage of
the existing equipment in the
facility within the
recommended life of the
mine.
Mineral Resource estimation
for Mineral reserve  Declaring the Mineral • There is no mineral reserve estimation.
conversion Resource estimation used as
a basis for Mineral Reserve
conversion. Clear statement
whether Mineral Reserves
have been reported as part
(inclusive) of Mineral
Resources.

Cost and revenue factors

 State basis for  The derivation of the • Current costs of Koza Gold’s operating mines were used for cost
assumptions. assumptions made in assumption.
 Currency, exchange relation to the project capital • Currency is used as USD
rates and dates of and operating costs. • The exchange rate used for financial analysis was TRY:USD of 6.5:1.
estimates. See Table 2. Assumptions made for
revenues including the main

21
 grade(s), metal or
commodity prices, foreign
exchange rates,
transportation and
treatment charges, penalties
etc. The allowances made for
royalties payable according
to state and private rights.
Basic cash flow inputs for a
given period. See Table 2.
Market assessment
 Demand, supply and stock • There is no any market assessment for precious metals.
situation for a particular
mineral, consumption trends
and factors that could
possibly affect supply and
demand. Defining the
market framework, and
following customer and
competitor analysis, possible
price and volume
estimations for products and
the basis for these
estimations. Market
assessment may indicate
that minerals cannot be sold
in the produced quantities;
hence reserve estimations
might be needed to be
revised.

Other
 All obstacles such as  Impacts of natural risk, • There are no obstacle such as land access, environmental or legal
land access, infrastructure, permits, potentially affecting mining.
environmental or legal environmental, legal, • There are operating mine and advanced projects in the district.
permits, potentially marketing, social or
affecting mining. governmental factors on the
Location plans of possible viability of the
mineral rights and titles. project and/or classification
and estimation of Mineral
Reserves. Conditions of
important ownerships and
approvals related to the
construction of the project,
mining leases, discharge
permits, government or
statutory approvals etc.

22
 Environmental obligations.
Site plans of Mine State
rights and ownership.

Classification
 Basis of classification of  Basis of classifying Mineral
the Mineral Resources Reserves into various • Resource was stated as inferred at this stage considering confidence
into varying confidence confidence classes. Does the on geology and drill spacing.
categories. Whether all resultant classification
relevant factors have properly reflect the
been properly included Competent Person’s opinion
in the calculation, e.g., on the deposit? The portion
relative confidence in of the Probable Mineral
tonnage/grade Reserves derived from
calculations, continuity Measured Mineral Resources
of geology and (if any).
distribution of metal
values, quality, quantity
and data. Does the
resultant categorization
properly reflect the
Competent Person’s
opinion of the deposit?
Audits and reviews
 Audit or review results of  Audit or review results of • The resource estimation was conducted by Gokhan Egehan who has
Mineral Resource Mineral Reserve been serving as a Senior Resource Geologist at Mine Geology and
estimations. estimations. Resource Department of Koza Gold.
• Reporting of the exploration results and QA/QC were audited by
Gökhan Çiçek who is a competent person under UMREK. Gökhan
Çiçek has been serving as Exploration Manager at Koza Gold and he
is Professional Member of YERMAM.
• The resource estimation was audited by Gökhan Bal, Mine Geology
and Resource Manager with Koza Gold. Gökhan Bal is a competent
person under UMREK and JORC Code being Professional Member of
YERMAM and Member of AUSIMM.
• The resource estimation was also independently audited by Leah
Mach, Principal Resource Geologist with SRK Consulting (U.S.), and
Inc. in accordance with JORC.

Discussion of relative
accuracy/confidence  Where applicable, a statement for relative accuracy and/or • Estimated IPD2 grades were compared to IPD3 and NN grades to
confidence for the Mineral Resource and Mineral Reserve check for bias. NN and IPD grade are very close to each other.
estimation, by using an approach or procedure deemed to • Sample grades and block grade comparison were completed and
be appropriate the Competent Person. As an example, considered within acceptable ranges.
application of statistical or geo-statistical procedures to • Local grade comparison were performed by using swath plot along X,
quantify the relative accuracy of the reserve within the Y and Z axis for the blocks.

23
stated limits of a confidence category or, if such an • Tonnage-grade curves were investigated for the sensitivity analyses.
approach is not possible, qualitative discussion of the
factors that could affect the relative accuracy and
confidence of the estimation. Is the statement related to
global or local estimations, and if local, indicate the
tonnages and volumes which need to be related to
technical and economic assessment? Documentation
should include the assumptions made and the procedures
used. Where the statements of relative accuracy and
confidence of the estimation are accessible, estimation
should be compared to production data. Discussing the
tests of the production sequence by conditional simulation
on the uncertainty of the tonnages and grades of
production increments.

24