MINING ACTIVITIES TO START SOON
[August 06, 2005, 21:54:13]

AzerTag, Azerbaijan
Aug 6 2005

A press conference dealing with the Agreement on the exploration,
development and production sharing for perspective gold fields
Gedabey, Gosha, Ordubad guru (Piyazbashi, Agyurd, Shekerdere, Keleki),
Soyudlu, Gizilbulag and Vezhnali in the Azerbaijan Republic was held
at Hyatt-Regency Hotel in Baku.

Speaking at the press conference president of the Azerbaijan
International Mines Operating Company (AIMOC) Rza Veziri noted oil
was not the country’s only wealth, but it was quite rich in other
mineral resources. He mentioned that as early as 1920, the Siemens had
developed copper fields in Gedabey, and in late 19th century, French
archeologists had carried out exploration works in Nakhchivan adding
huge ironstone, gold, solver and copper resources were discovered by
soviet including local specialists in Nakhchivan, Kelbajar, Gedabey
and Dashkesan. Mr. Veziri announced that in the Agreement ratified
by Azerbaijan parliament in 1997, the share of Azerbaijan is 51%
and that of AIMOC is 49%. Noting the rise in gold price in October
2004 allowed to commence realization of the Agreement, he advised
the preparatory works had already been completed. “Drilling of two
wells in Liyazbashi area in Ordubad (Nakhchivan) would start in the
next month, and a processing plant will be constructed nearby in two
years,” he said. According to him, the first-phase investments will
make up $50 million, while on the next phases the amount will reach
$600 million. “Minimum workforce including engineers from the outside
will be involved in the project, at least 500-700 local residents
will be provided with jobs, Mr. Veziri said. He promised the finished
products would appear in the market in the 3rd Q of 2007.

Besides, he has made things clear concerning the earlier reports
on alleged drilling operations by Indian company in the territory
of Kalbajar, Azerbaijan (the area covered by the production sharing
Agreement). It was noted that influential law firms and lawyers in New
York had been involved in this case. “If the information is confirmed,
Armenia will account to the international court. No proofs of the
illegal actions have been provided so far,” he said.

In the end, the company’s managers spoke of measures to realize the
Agreement, and answered questions from journalists.