Thursday, July 13 2017 17:44
Emmanuil Mkrtchyan

GeoProMining - ten years of work for the benefit of the country, at the forefront of gold mining

GeoProMining - ten years of work for the benefit of the country, at the forefront of gold mining

ArmInfo. One of the largest investors in Armenia, the Russian group of mining companies GeoProMining celebrates its 10th anniversary of work in our country. In 2007, the company acquired the first major asset in Armenia, GPM GOLD, which is developing the Sotq gold mine and managing the Ararat gold plant, and a little later Agarak Copper-Molybdenum Combine (AMMK). In connection with this date, the general director - ArmInfo analyst Emmanuil Mkrtchyan spoke with the president of the group Roman Khudoliy

Roman Nikolayevich, sum up the results of these 10 years of work in our country. How effectively did the company manage to work, taking into account the fact that soon after the acquisition of assets a global financial and economic crisis broke out? Due to what you managed not only to survive it, but also to practically reach the level of profitability of production?

In 2007, the assets we acquired in Armenia were in a completely horrible condition, the equipment were almost completely depreciated, the organization and culture of production, to put it mildly, desired the best. The efficiency of production was very low, our predecessors accumulated huge debts and not only for payments to the budget, suppliers, other contractors, but also for staff salaries. Arrears in wages was 9 months, and employees were on forced vacations. But that's not all, the former owners of the company developed all the oxide ores at the Sotq deposit, leaving only persistent sulphides, for the enrichment of which it was necessary to build a new plant, since the old technology in Ararat was not for this purpose.

Therefore, after the acquisition of the asset, we have set a very serious task of developing the project and constructing a plant for processing sulphide resistant ores. Together with the engineering companies Cors Resource and Extract Technologies, we have come a long way in designing, building, implementing the most modern technology for processing sulfide ores - Albion. To start the plant it was necessary to prepare a mine. We conducted a global modernization, buying from the Japanese company Komatso 22 units of equipment - dump trucks, excavators, loaders ...

On Agarak copper-molybdenum combine was, actually, the same situation. In total, for our assets in Armenia, taking into account their acquisition and technological modernization, we spent about 500 million USD for this period. I think, despite the crisis risks, the difficult technological and managerial decisions, we have passed this way very dignifiedly.

What are the company's medium-term plans for the strategic development of its two Armenian assets?

We, of course, are not going to dwell on this, although I can say that the investment return has just begun, literally the last year. The return on investment (ROI) is still minimal in terms of the amount invested, but, nevertheless, the process has started. After all, when an investor decides to enter an asset, he first of all thinks about how long he will be able to repay the investment and what profit he can expect. After the acquisition of the Sotq asset in 2008, GPM Gold extracted and processed only 136 kg of gold in marketable products. In the current year, we will produce about 4 tons. The difference, as you can see, is enormous, we managed to make such a leap. Today we process about 1.3 million tons of ore at the Ararat factory, in the medium term we intend to bring the volumes up to 1.5 - 1.7 million tons and set a goal to produce gold up to 5-6 tons per year. This will require additional investment, which we now carry out through our own and attracted funds.

Similar is about the Agarak. We are well aware that with such a low content of ore base in copper deposits, in conditions of low world prices, it is possible to bring production to an acceptable level of profitability only through scaling. Strategically, we plan to increase the productivity of the copper-molybdenum asset from 3.5 million tons of ore processing to 6 million tons at the initial stage. These actions will make it possible, even at low prices, to work without interruption. This is a serious task, requiring significant additional investment. Only this year GeoProMining sent over $ 3 million to further technical re-equipment of Agarak Copper-Molybdenum Combine.

You work in Russia, other countries, once worked in Georgia. What makes Armenia different, does our country have its own strengths that make it attractive for foreign investors?

You know, Armenia has become for us a native, because 10 years - a considerable time. Yes, in relation to other countries, here there are advantages, the main of which are historical mining competencies, hardworking and professional workers.

One must have a big risk appetite to invest such significant investments in the crisis period of uncertainty.

Yes, these 10 years were quite difficult for us, as for many. We invested our own money, borrowed money, invested in technology, production and all this in the crisis of 2008, then in 2012 a new crisis broke out, which has not ended yet. That is, we, figuratively speaking, "caught" all the crises, and when they ask me how I work in such conditions - I answer that, frankly speaking, in other conditions we almost did not work. Management and the team have coped with this task, we are developing steadily, unlike many companies.

It is interesting to know your expert opinion on the issue of the transition of the country's mining industry to the deeper processing of raw materials through the construction of its own smelting production, the project of which was already developed in Zangezur before the crisis of 2008-2009 and the possibility of creating a small refinery?

The theme of the construction of a smelting plant for the processing of copper, molybdenum concentrates periodically appeared during these 10 years. I know that the Chinese have made an offer to build a copper smelter and it is now being studied. But in order for the smelter for copper to be effective, it is necessary to process not less than 80-100 thousand tons of copper in concentrates. Probably, such a volume, taking into account the commissioning of new capacities, can be achieved in Armenia, and this will be beneficial for extractive companies with high logistics costs. However, nevertheless, it is necessary to weigh all the pros and cons again, because we are all in the market and the local auditor should not yield to existing processors.

As for the refinery, the alloy Dore, to date, only GPM Gold produces in Armenia. For the construction of the refining factory, resource capacities are needed. Even if we increase production to 6 tons of gold, this plant will be unprofitable. When other fields are put into operation, and in general gold production will reach 30 tons and higher in bars Dore, this issue is worth considering. But we must take into account that there are a large number of refining industries in the world, only 11 plants in Russia - and almost all of them are under-loaded. If it is difficult to build a plant in Armenia to reach a competitive cost, I do not see such opportunities in the near future. Some have already gone bankrupt, for example, the Kolyma plant in Russia. This topic is quite subtle, Dore's producers, unlike concentrates producers, do not have logistics problems, transportation costs are minimal.

And the last question. "Resources for good" is the motto, apparently chosen by your company for the purpose of implementing its social policy, taking into account the fact that the enterprises in Vardenis, Ararat and Agarak, in fact, are city-forming, providing jobs for up to 70% of the local able-bodied population?

Realizing that our enterprises have a city-forming nature, in 2011 the company moved from disparate projects to a system approach to corporate social responsibility and launched a comprehensive program covering all aspects of social life, from attentive attitude towards employees and ending with minimizing the impact of production on the environment. We constantly interact with state authorities and local administrations, which allows us to react as sensitively as possible to the needs of the inhabitants of the regions, to send charitable funds to those projects that are most relevant to the local population.

We are long-term and honest investors, when we bought GPMGold, there worked 550 people, now the team consists of 1050 people, an increase of almost 2 times. Over $ 170 million was paid to the budget of the Republic of Armenia. As for wages, at our enterprises it is one of the highest in the industry.

So, we invest in social projects: development of infrastructure, in the areas of fire safety and security, energy supply, water supply, repair hospitals, schools, kindergartens. Support for socially vulnerable groups of the population is also traditionally one of the priorities of the social work of GPM. We also render all possible assistance to local authorities in carrying out various environmental measures, improvement and creating comfortable conditions for the residents of Vardenis, Ararat and Agarak. In total, for these 10 years we have invested about $ 8 million in the implementation of various social programs and charity.

POST A COMMENT
Input digits     


News
Armenia will create its own database of grape varietiesArmenia will create its own database of grape varieties
EDB: In the short term, we should expect a further slowdown in the  growth of the Armenian economyEDB: In the short term, we should expect a further slowdown in the  growth of the Armenian economy
VWFA study: Several tens of autochthonous grape varieties revealed in  ArmeniaVWFA study: Several tens of autochthonous grape varieties revealed in  Armenia
Minister: Artsakh`s budget in 2019 may be surplusMinister: Artsakh`s budget in 2019 may be surplus
New strategy of Armenia`s mining industry is directed against  New strategy of Armenia`s mining industry is directed against  "offshore hide-and-seak" and aimed at revealing the real owners of  companies
PRC Ambassador: Chinese company Sinohydro Corporation is ready to  take part in the construction of PRC Ambassador: Chinese company Sinohydro Corporation is ready to  take part in the construction of "North-South" in the next phase -  Tranche-4
Relevant committee of NA recommended the draft budget for 2019 for  adoptionRelevant committee of NA recommended the draft budget for 2019 for  adoption
Construction of a complex for IT companies is planned in YerevanConstruction of a complex for IT companies is planned in Yerevan
Converse Bank initiated the first SME Banking Club seminar in ArmeniaConverse Bank initiated the first SME Banking Club seminar in Armenia
Expert: Armenian banks need to focus on digital banking and  electronic channels when servicing SMEsExpert: Armenian banks need to focus on digital banking and  electronic channels when servicing SMEs
Nikol Pashinyan held a meeting with major businessmen of ArmeniaNikol Pashinyan held a meeting with major businessmen of Armenia
Argentinean businessmen intend to establish experimental agricultural  enterprise in Armenia Argentinean businessmen intend to establish experimental agricultural  enterprise in Armenia 
From 2021 Armenia will not attract more budget loansFrom 2021 Armenia will not attract more budget loans
Acting  Minister of Economic Development and Investments of Armenia  and representatives of the World Bank discussed issues related to  improving the business environment. Acting  Minister of Economic Development and Investments of Armenia  and representatives of the World Bank discussed issues related to  improving the business environment. 
Veolia Jur: Regulatory charges are false and unfoundedVeolia Jur: Regulatory charges are false and unfounded
Armenian Prosecutor General`s Office forced subsoil users to start  paying their obligations to the state budget and budgets of local  communitiesArmenian Prosecutor General`s Office forced subsoil users to start  paying their obligations to the state budget and budgets of local  communities
Armenia is in negotiations with the Russian side to reduce prices for  supplied gasArmenia is in negotiations with the Russian side to reduce prices for  supplied gas
Director General of Gazprom-Armenia: It will be profitable to  purchase Iranian gas only if it is 10% cheaper than Russian gasDirector General of Gazprom-Armenia: It will be profitable to  purchase Iranian gas only if it is 10% cheaper than Russian gas
Armenian government does not intend to revise concession agreement  with Russian Railways OJSCArmenian government does not intend to revise concession agreement  with Russian Railways OJSC
Hrant Tadevosyan: Up to 2030, $ 480 million to be invested in  modernization of Armenian gas transmission systemHrant Tadevosyan: Up to 2030, $ 480 million to be invested in  modernization of Armenian gas transmission system
ArmInfo released the 55th jubilee analytical bulletin covering  Armenian insurance marketArmInfo released the 55th jubilee analytical bulletin covering  Armenian insurance market
Armenian government took another risk mitigation measure for farms  attracting credit resources Armenian government took another risk mitigation measure for farms  attracting credit resources 
Director General of ``Gazprom-Armenia``: At the end of the year it  will be clear will gas prices remain the same or will they be  changed?Director General of ``Gazprom-Armenia``: At the end of the year it  will be clear will gas prices remain the same or will they be  changed?
Expert: The number of producers of high-quality honey is growing in  ArmeniaExpert: The number of producers of high-quality honey is growing in  Armenia
For the second half of 2018, the Cabinet of Ministers approved the  implementation of 90 community programs worth 2.45 billion dramsFor the second half of 2018, the Cabinet of Ministers approved the  implementation of 90 community programs worth 2.45 billion drams
Armenia and Iran discussed the possibility of opening a Halal office  in ArmeniaArmenia and Iran discussed the possibility of opening a Halal office  in Armenia
Discussions on fighting tax evasion and capital outflow from the  country to offshore companies started in YerevanDiscussions on fighting tax evasion and capital outflow from the  country to offshore companies started in Yerevan
Tourism potential of Armenia presented at WTM London exhibitionTourism potential of Armenia presented at WTM London exhibition
Creation of agricultural and land exchange is planned in ArmeniaCreation of agricultural and land exchange is planned in Armenia
Financial authorities of Armenia are on the way to all-out declaring  of income Financial authorities of Armenia are on the way to all-out declaring  of income 


Exchange rates
12.11.2018
RUB7.22-0.07
USD488.570.62
EUR549.84-3.35
GBP627.52-6.91
CAD369.850.05
JPY42.890.04
CNY70.32-0.06
CHF484.020.09

Experts
Association of Organic Agriculture is being created in ArmeniaAssociation of Organic Agriculture is being created in Armenia
Pailak Tadevosyan: Governments change in Armenia, but taxation  approaches do not changePailak Tadevosyan: Governments change in Armenia, but taxation  approaches do not change
Rouben Indjikian: Everyone should follow the established unified and fair rules of the gameRouben Indjikian: Everyone should follow the established unified and fair rules of the game
Mher Arakelyan:  Armenia`s payment business has great prospectsMher Arakelyan:  Armenia`s payment business has great prospects
Rating-Agentur Expert RA GmbH and AmRating issued an industry report  on Armenia`s banking systemRating-Agentur Expert RA GmbH and AmRating issued an industry report on Armenia`s banking system
Igor Nazaruk: Each planted sprout has the right to a successful prospect if it is cherished and taken care ofIgor Nazaruk: Each planted sprout has the right to a successful prospect if it is cherished and taken care of
Ara Khzmalyan: Armenia is comfortable to Russian touristAra Khzmalyan: Armenia is comfortable to Russian tourist
The Armenian delegation to the US followed the advice of President TrumpThe Armenian delegation to the US followed the advice of President Trump
Outflow of population and passivity of the Diaspora pushes property prices downOutflow of population and passivity of the Diaspora pushes property prices down
Finombudsman: Amendments to the Civil Code on the imposition of fines and penalties will reduce the number of outstanding loans and  non-creditworthy consumersFinombudsman: Amendments to the Civil Code on the imposition of fines and penalties will reduce the number of outstanding loans and non-creditworthy consumers
Vahan Shakaryan: If we promote Armenia, the promotion of economic sectors will not be a run with obstacles, but a light run for short distancesVahan Shakaryan: If we promote Armenia, the promotion of economic sectors will not be a run with obstacles, but a light run for short distances
Gagik Aghajanyan: There is no need to look for alternatives - it is necessary to work and develop actual   directionsGagik Aghajanyan: There is no need to look for alternatives - it is necessary to work and develop actual   directions
Vitaly Nesis: Armenia is very promising from the geological point of viewVitaly Nesis: Armenia is very promising from the geological point of view
The market of OSAGO goes into virtual spaceThe market of OSAGO goes into virtual space
Ishkhan Mkhitaryan: ArCa and Mir complete the technological part of the project of interaction, business for banksIshkhan Mkhitaryan: ArCa and Mir complete the technological part of the project of interaction, business for banks
The second stage of implementation of the program for prolonging the lifetime of the power unit N2 of the Armenian NPP beginsThe second stage of implementation of the program for prolonging the lifetime of the power unit N2 of the Armenian NPP begins
Successful business is forging for years - to the jubilee of IC Successful business is forging for years - to the jubilee of IC "INGO Armenia"
Armen Shahnazaryan: The double increase in the insurance portfolio of EIAA ICJSC by the end of 2018 is quite feasibleArmen Shahnazaryan: The double increase in the insurance portfolio of EIAA ICJSC by the end of 2018 is quite feasible
Expert: Real estate market of Armenia started demonstrating weak  signs of recovery in I half-yearExpert: Real estate market of Armenia started demonstrating weak signs of recovery in I half-year
Amulsar: Ecology and РeopleAmulsar: Ecology and Рeople

Search by date

Government Bonds

 

ISIN AMGB1029A250
Auction ID AMGB1029A250A
Date 12.05.2017
Issue date 29.10.2015
Issue volume (AMD) 50 000 000 000
Maturity date 29.10.2025
Coupon year yield 11.00%
Auction volume (AMD) 1000 000 000 - 2.000 000 000
Auction date 12.05.2017
DLS
Total amount (AMD) 1 000 000 000
Amount of the total bids (AMD) 787 200 000
Amount of the total accepted bids (AMD) 787 200 000
Cut of yield (%) 10,6447
Weighted avrage yield (%) 10,6447
Auction max  yield (%) 10,6447
Auction min  yield (%) 10,6447
Number of participants 5
ArmEx

 

СПРОС (Покупка)

USD

Средневзв. Цена

482,00

ПРЕДЛОЖЕНИЕ (Продажа)

  USD

Средневзв. Цена

-

СДЕЛКИ

USD

Цена откр.

482,00

Цена закр.

482,00

Мин. Цена

482,00

Макс. Цена

482,00

Ср/взв. Цена

482,00

-0.16

Кол-во сделок

1

Объем (инвал.)

200 000

0бъем (драм)

96 400 000

Commented
Veolia Jur: Regulatory charges are false and unfoundedVeolia Jur: Regulatory charges are false and unfounded
Armenian Prime Minister: We are gaining momentum for economic takeoffArmenian Prime Minister: We are gaining momentum for economic takeoff
By the end of 2018, By the end of 2018, "Galburdjian Group" will launch the production of  sesame oil in Armenia
Expert: Armenia has a problem with effective use of water resources,  rather than small hydropower stationsExpert: Armenia has a problem with effective use of water resources,  rather than small hydropower stations
Investment forum Investment forum "Energy Week 2018" to be held in Armenia
Expert: It is necessary to start implementing the program for the  construction of a new nuclear unitExpert: It is necessary to start implementing the program for the  construction of a new nuclear unit
The updated feasibility study of construction project of electricity transmission line Armenia- Georgia will be ready by the end of the year - the Ministry of EnergyThe updated feasibility study of construction project of electricity transmission line Armenia- Georgia will be ready by the end of the year - the Ministry of Energy
Eurasian Development Bank wishes to expand its activities in ArmeniaEurasian Development Bank wishes to expand its activities in Armenia
$ 100 million to be invested in repatriation project Build Armenia$ 100 million to be invested in repatriation project Build Armenia
FRV: Armenia`s growing desire to increase renewable energy sources is  a decisive factorFRV: Armenia`s growing desire to increase renewable energy sources is a decisive factor
Suren Papikyan: It`s safe now to do business in Armenia, assures  Armenian MinisterSuren Papikyan: It`s safe now to do business in Armenia, assures  Armenian Minister
Armenian state debt started reducing up to $6.7 bln to June 1 2018Armenian state debt started reducing up to $6.7 bln to June 1 2018
Minister: Implementation of program on liberalization of the electric  power complex of Armenia will be completed within the next two yearsMinister: Implementation of program on liberalization of the electric  power complex of Armenia will be completed within the next two years
Nikol Pashinyan: In a number of cases after paying fines and  penalties the borrowers will be allowed to take new loan Nikol Pashinyan: In a number of cases after paying fines and  penalties the borrowers will be allowed to take new loan 
German bank KFW urges Armenia to build power line in the direction to  GeorgiaGerman bank KFW urges Armenia to build power line in the direction to  Georgia
Anna Chobanyan-one of most likely candidates for new Head of General  Department of Civil Aviation Anna Chobanyan-one of most likely candidates for new Head of General  Department of Civil Aviation 
IFAD confirms its readiness to develop and implement new joint programs with Armenia`s Agriculture MinistryIFAD confirms its readiness to develop and implement new joint programs with Armenia`s Agriculture Ministry
Rosselkhoznadzor asks not politicize the issue of deliveries of tomatoes from Armenia to RussiaRosselkhoznadzor asks not politicize the issue of deliveries of tomatoes from Armenia to Russia
Armenian nuclear power station has a resource for work for another 30  yearsArmenian nuclear power station has a resource for work for another 30 years
Premier: Construction of a new nuclear power plant in Armenia is one of the priorities of the new government of the countryPremier: Construction of a new nuclear power plant in Armenia is one of the priorities of the new government of the country
In Armenia, an online service has been activated that allows  calculating the cost of customs clearance of a carIn Armenia, an online service has been activated that allows calculating the cost of customs clearance of a car
Gyumri programmers won on hekaton Gyumri programmers won on hekaton "Innovative ideas for tourism development"
Armenian Lori opens a large international ski resortArmenian Lori opens a large international ski resort
A number of light and alcohol industry enterprises of Armenia will be  provided with state supportA number of light and alcohol industry enterprises of Armenia will be provided with state support
Expert: The attitude of Armenian public to the nuclear power industry is demonstrated not by the promiseExpert: The attitude of Armenian public to the nuclear power industry is demonstrated not by the promise
Expert: The biggest gap in procurement legislation is the lack of an institution for accountability for its violationExpert: The biggest gap in procurement legislation is the lack of an institution for accountability for its violation
Maxim Sokolov: Russian Federation remains the main trade partner of  ArmeniaMaxim Sokolov: Russian Federation remains the main trade partner of Armenia