Friday, April 17 2015 04:43

 Polymetal International plc company is the leading gold and silver mining group, operating in Russia and Kazakhstan. Polymetal purchased a 25% stake in the company owning Lichkvaz exploration licence in Armenia (including part of intracompany loan). The consideration comprises 429,260 shares equal to US$3.5 million and agreed an earn-in program to take its ownership to 50%, the company press-office reports. This is the company?s first asset in Armenia, its resource estimation is 19 tons of gold.  

Vitaly Nesis, Group CEO of Polymetal. said : "I hope this high-grade project will grow through exploration and provide us with an optimal stepping stone into a new jurisdiction for Polymetal.  Polymetal purchased a 25% stake in the company owning Lichkvaz exploration licence in Armenia (including part of intracompany loan). The consideration comprises 429,260 shares equal to US$3.5 million. Polymetal has also entered into agreement for financing of exploration activities (no more than 15 km of exploration drilling), technical research as well as JORC feasibility study in exchange for a right to increase its share in the project up to 50% after the completion of these tasks. As   result of the issuance of consideration shares, Polymetal's share capital will comprise 423,031,984 shares. ?n application has been made to the London Stock Exchange and

UKLA on the official list and consideration shares are expected to be admitted to trading on or around 20 April 2015."
Lichkvaz is located in the Meghri area of the Syunik-Marz province of southern Armenia, 380 km south of Yerevan. The infrastructure in the area is developed with power, water, accommodation and skilled labour force available. A previous resource estimate (not compliant with JORC) puts the total mineral endowment of the property at 2.4 Mt of material at 6.9 g/t in the inferred category for approximately 0.5 Moz of gold equivalent contained /18.7 tons/. 

To note,the geology of the project is characterised by a series of near-vertical shears and steep westerly dipping vein sets ranging up to 4-5 metres in width, hosted in andesite. It is estimated that the reactivation will result in 150-200 thsd tons of saleable ore per year. At such a flow the project will last 10-15 years- this depends on the reserve increment possibility and additional investments into the survey. 

To remind, Iberian Resources Company owned Lichqvaz-Tey mine in the 90s. In 2008 Tamaya Resources (the company owns 82.6% of Iberian Resources? shares) Board of members announced about the shut-down of the gold-mining project implemented in the mine. According to company?s estimation, the amortization costs appeared to be higher, and the gold reserves appeared to be smaller in Armenia. According to Iberian Resources preliminary estimation, there are 17 tons of gold reserves in the mine. The mine mineralization appeared to be more complex than expected. Tamaya Resources made a decision to stop the investments for Meghri mine requires a lot of funds. In 2009 the preliminary investment cost was 65 mln USD. 

The exploitation of mines in Meghri causes the concern of Armenian ecologists. They believe that the mines contain (according to Soviet estimations) so-called powdered uranium. The Ministry of Nature Protection RA officially rebuts the data.