CANADIAN COMPANY INTENDS TO MAKE LONG-TERM INVESTMENTS IN ARMENIA

Noyan Tapan
Aug 10 2006

YEREVAN, AUGUST 10, NOYAN TAPAN. The Canadian company Dundee Precious
Metals (DPM) purchased a large stake of Deno Gold Mining Company
(DGMC) CJSC (Armenia), which was founded in 2004, and intends to
make long-term investments in further development of the mines
near Kapan. Under an agreement signed in Yerevan on August 10,
the only shareholder of DGMC, British company Vatrin Investment
Ltd. passes 80% of its shares to Dundee Precious Metals. Paul Bushell,
representative of Vatrin Investment, told reporters that the deal’s
cost and other details will be announced later. At the same time,
Dundee Precious Metals expressed a willingness to invest 10 mln USD in
DGMC’s assets in the near future for research work and other capital
expenditures. For the same purpose, it is envisaged to get additional
crediting from the European Bank for Reconstruction and Development
(EBRD). DGMC located in Kapan is carrying out mining in the Shahumian
polymetal mine and Kapan’s central copper mine. DPM, which is one of
Canada’s leading mining companies, intends to increase the annual
extraction at the mine to 1 mln tons instead of the current amount
of 300 thousand tons. Jonathan Goodman, Chairman and Chief Executive
Director of Dundee Precious Metals, said that there are all the three
prerequisites for their business in Armenia. These are a) the country’s
commitment to developing this sector, b) experienced workforce, c)
the possibility to manage the assets for a long-term perspective,
paying attention to the environmental issues. "Our goal is not just to
get money and run," he noted. Paul Bushell expressed an opinion that
having such an investor as Dundee Precious Metals is a great success
for Armenia, as DPM intends to operate here for 20-25 years. "This
is your government’s policy success," he noted. EBRD representative
Mark Rachovides reminded that the bank has already allocated a 4.5
mln-dollar credit to DGMC, which has achieved a remarkable success
in organizing production at the abandoned mines. He added that the
bank anticipates to sign bigger deals with this company in the future.