Going for Gold: Mining industry active again after dormant y

[MosJan]

Going for Gold: Mining industry active again after dormant years

By Ashot Gareginian

ArmeniaWeek reporter

A mine reopened in December after four silent years, is reviving the gold production industry in Armenia.

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Over the past four months, Sotk mine in the Gegharkounik region has unearthed 60,000 tons of gold-bearing ore and has provided jobs for about 320 employees (at $100 to $500 per month).

 

Ore from Sotk is refined at Ararat Gold Recovery Plant (AGRC) in the city of Ararat. The massive enterprise was built in 1976 and treated gold for all the Soviet Union Trans-Caucasian republics and Central Asia.

 

A smaller mine in Megradzor began operation in 1987, and produced about three tons of gold per year for the Soviet treasury.

 

But after collapse of the Soviet Union it became impossible to provide such wide range of production. Both Sotk and Meghradzor mines did not function until 1999.

 

In 1998 a joint stock company, Armgold (owned by the State) joined with a Canadian venture, Dynasty Mines, Ltd. to revitalize Armenia's gold mining industry and especially to restore the refining work in Ararat.

 

"Even without extraction of ore we are working hard enough", says Vardan Vardanian, deputy general director of AGRC. "We re-treat tailings accumulated during 26 years of plant's activity."

 

"Tailings" is the industry name given to sand accumulated from ore that is believed to contain traces of gold, silver and small portions of zinc.

 

About 12 million tons of tailings accumulated at AGRC by 1996. So far six million tons have been re-treated, producing three tons of gold.

 

New technology, introduced by First Dynasty Mines, made it possible to recover gold from this sand.

 

"We have implemented similar activities in Canada, Australia, South Africa," says Sergey Silayev, AGRC chief geologist, "and we have been successful."

 

(Since February, AGRC has been the sole shareholder. The Sterlite Corporation of India, controllers of First Dynasty Mines bought out the Government's shares for $3.25 million.)

 

Vardanian (pictured right) says that the world-wide gold market is not very strong these days, which is why the State was willing to sell out its share to First Dynasty.

 

Till now, First Dynasty has invested about $30 million and is expected to invest about $7 million more in the next five years.

 

By 2007, the enterprise expects to have extracted at least 13.2 tons of precious metal including nine tons from Sotk, 2.7 tons from Meghradzor and 1.5 tons from the tailings already collected in Ararat.

 

At present, the international price of pure gold is $290 per ounce (31.1 grams), $50 more than the 2001 index.)

 

But Armenian specialists are not excited about the increase, saying that the index fluctuates.

 

"We direct our efforts to increase production efficiency and reduction of expenses," says Deb Banyopadhay, AGRC president, "lest these fluctuations bring catastrophic consequences for us."

 

Banyopadhay says AGRC is also concentrating on strengthening its infrastructure by hiring young metallurgists, engineers, geologists, etc.

 

"Armenia's people, its workforce is its real treasure," Banyopadhay says.

Photos Courtesy of AGRC

 

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