Gold mining and the mining sector in general is very important to the economy of Armenia contributing over a half of its total exports. The major mineral is molybdenum but Armenia is also known to have significant gold deposits located throughout its territory. The country has about 13 operational gold and gold polymetallic mines. There also several other deposits still under development. This means that the country still has great potential for gold investors to consider.
Armenia Gold Mines
Armenia has a history of gold mining that dates back many centuries. Most of the early gold mining was done in the early years to fund the construction of religious castles in early Asia. During the Soviet Union era the country had a modest gold sector with production in 1989 just over two metric tons of gold.
The gold production went through a depression following the split from the union in 1991 to below 1000 kgs in 1995. The country, however, has recovered and now gold is one of the most important exports. The growth in gold production in the past few years has been aided by the legal reforms enacted in 2012. In collaboration with the International Finance Corp (IFC), the government of Armenia reviewed and enacted its new mining laws in 2012 thus further opening up its mining sector. This has seen a surge in the domestic gold production over the past few years. The new mining laws allow for a two level royalty structure that helps motivate investments in the sector.
Current Mining Ventures in Armenia
When you invest in the country’s mining sector you get a 4% royalty based on your gross revenue, then12.5% royalty based on your earnings. All these royalties are important deductions that come before a 20% corporate tax and any interest is levied.
The gold mining sector in Armenia has several foreign investments. The First Dynasty Mines, which is registered in Canada, was the first foreign company to invest in the country’s gold sector. In 1997 the First Dynasty Mines bought a stake in the Ararat gold mining plant. The plant was later transformed to the Ararat Gold Recovery Company before it was sold to GeoProMining Gold in 2007.
GeoProMining gold is the largest gold mining company in Armenia operating both the Ararat gold extraction plant and the Zod (Sotk) mines. The company reconstructed the gold processing plant at the Zod mines in 2013 to apply a new Albion technology. This technology was developed by the Australian company Xstrata Technology and was first applied in the Dominican Republic. Armenia now becomes the second country in the world to apply it. The Albion technology allows the company to simultaneously process different types of ores. This is expected to help boost the gold output from the mine to about 4.6 tons annually.
Another important player in the country’s gold sector is the Lydian international, another Canadian gold mining company. The company owns and operates the Amulsar Open pit gold mine which is located in South Armenia. The company made its major discovery in 2006 and begun development of the mine in 2012 with production starting in 2015. The Amulser gold deposit is estimated to contain about 2.3 million Oz of gold deposits at 0.8 g/t and about 9.98 million Oz of silver at a grade of about 3.4g/t. It is estimated the gold mine will produce about 6.25 tons of gold each year for 10 years.
Another major player in the Armenian gold mining sector is the Dundee Precious Metals Inc. through its subsidiary Deno Gold which owns and operates the Deno gold project in southern Armenia. The project is estimated to contain about 400,000 tons of polymetallic gold and silver ore. The company is also working on the shahemyan deposits still within the Deno gold project.