Vitaly Nesis: Armenia is not Australia, but better than Russia

ArmInfo. The company Polymetal  liked Armenia, which predetermined the decision to make a significant  investment. Vitaly Nesis, the head of the company told in an  interview with Interfax.

According to him, before this, investment was small. "We looked at  how the industry works in the country, what is the regulatory system,  the workforce, suppliers, contractors, local communities and we liked  the country. It was decided to make a more significant investment,"  said Vitaly Nesis, adding that from the point of view of state  regulation, Armenia, of course, is not Australia, but somewhat better  than Russia.

Earlier it was reported that Polymetal Int (uniting assets of  Polymetal) completed the audit of the mineral resources of the  Lichkvaz project in Armenia. According to JORC, they are 600 thousand  ounces (18.7 tonnes) of gold equivalent for underground mining  processing. The Lichkvaz deposit contains 4.3 million tonnes of ore  with an average grade of 4.2 g/t, containing 600 thousand ounces  (18.7 tones) of gold equivalent. The mineral resources are confirmed  by independent auditors of CSA Global. In 2016, Polymetal planned to  conduct a significant amount of additional drilling in Lichkvaz in  order to estimate the JORC ore reserves in the third quarter of 2017  and prepare a combined operation plan for the Kapan and Lichkvaz  projects. Polymetal intends to extract and transport ore for  processing to the Kapan enrichment plant. The deal for its  acquisition was closed on April 28, 2016.

Polymetal International plc has increased its stake in the Lichkvaz  deposit in Armenia to 100%. The purchase was made for 1,084,853 of  its own shares for $ 9.7 million (0.26% of the increased share  capital).  The deposit is located in Meghri, Syunik region in the  south of Armenia, 380 km south of Yerevan. It is a region with  developed infrastructure (electricity, water, housing) and access to  skilled labor. According to the historical estimate of the deposit  (not JORC), the estimated resources are 2.4 million tones of ore with  a content of 6.9 g/t, which corresponds to approximately 0.5 million  ounces of gold equivalent. The deposit is a series of semi-vertical  zones of crushing and steeply dipping of veins 4-5 meters in  thickness, located in andesite. The length of the system is 800  meters along the strike and in the north it is covered with glacial  tilla. The Lichkvaz deposit is a part of the Mediterranean fold belt  (Tethys) and, in the opinion of the Company, has a high geological  exploration potential. In the mid-1990s, the Lichkvaz-Thei deposit  was owned by Iberian Resources. In 2008, the board of directors of  the Australian company Tamaya Resources, which owns 82.6% of the  shares of Iberian Resources, announced the conservation of the  project to extract gold at this deposit. According to the company,  depreciation expenses in Armenia were higher, and gold reserves are  lower than expected. In this regard, the company decided to postpone  the additional exploration of the polymetallic Lichkvaz-Tei deposit  in Meghri, which was considered promising.  According to preliminary  estimates of Iberian Resources, gold reserves in this deposit are 17  tons. It is noted that the mineralization of the deposit turned out  to be more complicated than expected and test works for the  organization of a cheaper production cycle were unsuccessful. Tamaya  Resources decided to turn off investment activities in Armenia and no  longer invest additional resources, since the development of the  Meghri deposit requires big funds. The preliminary cost of the  investment program for 2009 was $ 65 million.

The Polymetal company, registered on Jersey, is producing and  exploring in four regions of Russia - the Magadan and Sverdlovsk,  Khabarovsk and in Chukotka, as well as in the Republics of Kazakhstan  and Armenia. Group "ICT" of Alexander Nesis is the ultimate  beneficiary of about 27% of the share capital of Polymetal, 13% of  the company belongs to the Czech PPF Group NV Petra Kellner. In  addition, about 1% of the authorized capital is controlled by the  management of the company and the director, 19% by private persons  and 40% by individual investors.