Before and After the 2015 Trustee Appointment

Pre-2015 management left behind a structure that developed reserves, increased production, produced at low cost and verified major investments through independent organisations.

Koza Gold’s 2014 indicators clearly demonstrate the operational scale before the appointment of trustees: 4.20 million ounces of reserves, annual production of 316.5 thousand ounces and a cash cost of US$440 per ounce. The use of international technical consultancy and external valuation mechanisms in investment decisions was a fundamental element of the management approach.

The comparison shows that the operational strength left by the pre-trustee management was severely eroded. Total gold resources fell from 13.40 million ounces to 9.066 million ounces, while reserves fell from 4.20 million ounces to 2.551 million ounces. The 2025 annual report did not disclose a new year-end 2025 figure for resources and reserves, but repeated the data as at 31 December 2024. Compared with 2014, production fell by 62.6% while the number of employees increased by 78.3%; production per employee fell by approximately 79%. Unit cash cost rose from $440 to $2,334 per ounce, reaching 5.3 times its former level.

One of the most striking deteriorations concerns operating expenses: operating expenses were 10% of revenue in 2014 but rose to 27% in 2024, an increase to 2.7 times the previous ratio. Even after falling to approximately 20.2% in 2025, the ratio remained twice its 2014 level.

In 2024, the company reported an operating loss from mining of approximately $0.15 million, while earning approximately $37.4 million in interest income and $33.4 million in FX-protected deposit and foreign-exchange income.

In 2025, operating profit was approximately $98.0 million; in addition, approximately $54.8 million in interest income and $6.2 million in FX-protected deposit and foreign-exchange income were recorded. It is therefore incorrect to treat the 2024 net result in particular as evidence of successful mining operations: core operations made a loss that year, while significant support for the result came from the management of cash and financial assets outside mining.

* Total resources comprise measured, indicated and inferred resources and include reserves. The 2024 total is 3.662 + 5.404 = 9.066 million ounces.   ** The 2025 ratio was calculated by dividing marketing/sales/distribution, general administrative and R&D expenses by revenue.   *** Interest income is shown separately. “FX-protected deposit and foreign-exchange income” is the total of fair-value increases in FX-protected deposits and disclosed foreign-exchange gains. Dollar amounts are approximate and were converted using annual average TRY/USD rates derived from the company’s disclosed average realised gold prices. As the 2024 and 2025 financial statements apply inflation accounting, the dollar equivalents should be read as indicative comparisons.

Theoretical gross metal value at today’s gold price

The calculation uses a rounded reference price of $4,400 per ounce for 4 September 2026. These figures are not company value, sales revenue or net present value; they represent the theoretical gross value of the metal in the ground. No deductions have been made for production loss, metallurgical recovery, capital and operating costs, tax, state royalty, time or discounting. Not all resources qualify as economically recoverable reserves. Using the 2025 disclosed cash cost of $2,334 per ounce, the simple price–cash cost difference is approximately $2,066 per ounce, but this difference must not be interpreted as profit or project NPV.

If the pre-trustee production and cost structure had been maintained

This scenario assumes that the production capability inherited by the trustees and the 2014 cash-cost discipline had been maintained in the 2026 price environment. The result is striking: if the 2014 scale had been maintained, the simple annual price–cash cost contribution could have been approximately $1.253 billion, whereas the same indicator based on 2025 production and costs is approximately $244.5 million. The difference is approximately $1.009 billion, and the contribution under the 2014 structure is approximately 5.1 times greater. This calculation is solely a comparative indicator; it is not a revenue forecast, EBITDA, net profit, company value or NPV. It does not include exchange rates, realised sales price, grade, recovery rate, inventory movements, capital expenditure, overheads, tax, state royalty or financing effects. In addition, reliably calculating what reserves would have been from 2015 to the present would require complete annual data on production, new discoveries, reserve conversion and feasibility studies.

If the gold price had not risen from its 2015 levels to approximately $4,000 in 2025, and if the cash left by the pre-2015 management together with the exchange-rate and interest returns on that cash had not existed, a large company such as Koza Gold could have reached the point of insolvency during the trustee-management period.

For Mollakara, which was acquired and developed during the Koza Gold period, the independent SRK study projected an investment of $105.109 million. The total amount subsequently announced rose to $250 million, a difference of $144.891 million.

Cost progression

Under the 2023 contract, construction works were disclosed as TRY 4,990,012,400 plus VAT, while machinery and equipment were disclosed as US$40.710 million plus VAT. At the exchange rate on the contract date, the total corresponded to approximately US$225 million. The financial statements as at 31 December 2023 included an advance of TRY 1,700,486,000 to Fernas. The contract was signed on 8 August 2023 and the site was handed over on 11 August; on 18 December 2024, it was announced that the work had been transferred to a joint venture between Artemisia Turizm Otelcilik and Yapı ve Yapı İnşaat.

The disclosed information does not, by itself, explain the increase in investment cost from $105.109 million to $250 million.

For the Himmetdede investment, the tender result of approximately $130.5 million was compared with SRK’s technical estimate at approximately the same level and BDO’s reasonableness assessment of $130.5–143 million. Although three separate control points existed, the investment was completed below the projected costs, and the investment amount was also confirmed by investment figures from the post-2015 trustee-management period, the former management was nevertheless prosecuted.

At Mollakara, by contrast, the actual investment cost exceeded twice SRK’s 2014 estimate. Activities conducted on behalf of the public would be expected to set an exemplary standard; yet the prudent investment decisions and actual costs of the pre-trustee management were penalised, while the trustee management increased the investment cost of the same project to more than twice the realistic estimate prepared under the former management.

It cannot be explained anywhere in the world, under any circumstances, that the pre-trustee management should be punished while the trustee management carries out a project at more than twice the cost projected by the former management.