GEOPROMINIG IS READY TO INVEST $350MLN IN GOLD MINING IN ARMENIA

ArmInfo
2008-12-01 20:52:00

ArmInfo. In 2009-2011 GeoProMinig is going to invest $350mln in
gold mining in Armenia, Director General of GPM GOLD LLC (company of
GeoProMining Group) Dmitry Kalandadze said during the first melting
of gold at Ararat Gold Recovery Factory.

Members of the Armenian Government and the top managers of GeoProMining
attended the ceremony.

Kalandadze said that the money would be spent on modernization
of the existing factory and the construction of a new plant and a
tailing dump. The greater part of the money will be provided by the
shareholders, the remaining part will be borrowed from international
financial organizations.

After 1.5-year idleness due to purchase procedures, in early Nov 2008
GeoProMining started to develop Sotq deposit in northern Armenia.

Each year the company is planning to mine and recover 25,000-30,000
ounces of gold. This is not enough for earning profit."When
GeoProMining bought Ararat Gold Recovery Company we promised to
launch it and we have kept our promise even despite the present global
crisis. We are not seeking profit for the moment. Our priority is to
solve the social problems and to provide people with work as after a
long downtime we may lose highly-qualified personnel," Kalandadze said.

He pointed out that since the purchase of AGRC GeoProMining had already
invested $15mln for kee ping GPM GOLD LLC in working condition,
particularly, $8mln has been spent on restart of the factory and
organization of railroad transportation of ore from Sotq deposit to
Ararat. $3mln-3.5mln more will be spent for this purpose by the end
of this year.

D.Kalandadze said that the first 10-12 kg bars of Dore bead with 40-50%
gold content and 50-60% silver content will shortly be sent to Johnson
Matthey affinage plant for final processing, afterwards they will be
sent to the London Metal Exchange within ten days. The gold price is
still stable and the company’s leadership hopes that the price will
not drop, he said.

First Vice President of GeoProMining Group Roman Khudoley (Moscow)
said that he has come to congratulate the personnel and leadership
of the company on the first melting. The group implemented all its
liabilities while the world faces a crisis, and here a great role
belongs to the personnel and leadership, he said.

For his part, Armenian Economy Minister Nerses Yeritsyan told
journalists that GeoProMining displayed a good will having launched
the company and implemented thereby its liabilities. The pledge of
the work success is still the stable price of gold and adherence
to the investment program approved by the Armenian government,
the minister said. He added that the new shareholders promised to
introduce new technologies of gold mining and work methods supported
by the government.

To recal l, in August 2007 the Indian group Vedanta Resources signed an
agreement on selling 82,4% of shares in Canadian company StÒ~PrlitÒ~P
Gold, the main asset of which was the Ararat Gold Recovery Company
(AGRC) of GeoProMining company included in the Industrial Investors
Group. The total amount of the package sale made up $86 mln.

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