ACP AND VTB BANK SIGN 257 MILLION-DOLLAR CREDIT AGREEMENT ON CREDITING OF TEGHUT COPPER AND MOLYBDENUM MINE’S OPERATION

Noyan Tapan
Dec 10 2007

YEREVAN, DECEMBER 10, NOYAN TAPAN. The credit program on operation
of the Teghut copper and molybdenum mine is the biggest one (with
the participation of the private sector) out of the credit agreements
signed in Armenia so far, the chairman of the Central Bank of Armenia
(CBA) Tigran Sargsian stated on December 8 after the ceremony of
signing the agreement between Armenian Copper Program (ACP) company,
which operates the mine, and VTB Bank (Russia). The Armenian prime
minister Serge Sargsian was present at the signing ceremony.

The chairman of VTB Bank Andrey Kostin said that 257 million-dollar
credit for operation of the Teghut mine was provided for 12 years. In
his words, this project is quite profitable for VTB: in addition to
the credit interest, the bank will also receive part of the profit
in the "outside" form of the Teghut company’s shares.

The president of ACP company and Teghut company (which was created
with the aim of implementing jointly with VTB the investment program
on operation of the Teghut mine) Valery Mejlumian said that VTB has
the same investment risks as ACP in the project of the Teghut mine’s
operation. According to him, the risks are related to the fact that
copper prices may fall in international markets.

In his words, the cooperation between ACP and VTB has other
directions as, by the agreements reached by the sides, VTB Group has
the primary right of participation in the projects implemented by
ACP in Armenia. ACP is currently doing geological exploration work
in several big copper-gold mines. The matter first of all concerns
two-three mines in Lori marz.

It was mentioned that ACP and VTB Group already have an experience of
successful cooperation for several years. In particular, the financing
of pre-export of black copper of 15 million dollars for three years by
ACP has been organized through VTB France Bank – member of VTB Group.