Global Gold to invest $4.1 mln in Armenia
Thu May 25, 2006 10:22 AM ET

YEREVAN, May 25 (Reuters) – U.S.-based Global Gold Corp. (GBGD.OB: Quote,
Profile, Research), owner of a gold enrichment plant in Armenia, plans to
invest $4.1 million in exploration in the former Soviet republic this year,
a company official said on Thursday.
Ashot Boghossian, head of Global Gold’s office in Armenia, told Reuters the
company had invested $5.5 million in exploration since acquiring a 51
percent stake in the Tukhmanuk plant last year from local firm Mego Gold.
The cost of the acquisition was $3.5 million. Global Gold has paid $1.5
million and says it will pay the rest within two years.
Global Gold, headquartered in Greenwich, Connecticut, made a private
placement of some of its shares in March, raising $13 million, Boghossian
said.
“These funds will be used for financing mining projects in Armenia and
Chile,” he said.
He added the company would start exploration of the central part of the
Tukhmanuk gold deposit from the end of next month.
“We expect to extract the first 75,000 tonnes of ore this year,” Boghossian
said.
He added Global Gold would increase the Tukhmanuk plant’s current ore
processing capacity of 200,000 tonnes a year if necessary.
Armenia, like other gold-rich ex-Soviet states, has attracted foreign
investment since the collapse of communism.
The Armenian gold-mining unit of Canada’s Sterlite Gold Ltd. (SGD.TO: Quote,
Profile, Research) — Ararat Gold Recovery Co. — runs two mines, Zod in
eastern Armenia and Meghradzor in the north.
Management owns about 15 percent of Global Gold. The Firebird group owns
approximately 20 percent and Farallon Capital 18 percent, the company says
on its website.