Polymetal Plc, based in Russia, will restore mining at the Lichkvaz gold mine in the south of Armenia. To do that, the company will complete a resource estimate in line with the Australasian JORC code, based on exploratory drilling in 2015, representatives of the press service of Polymetal told Armenian News – NEWS.am.

The resource estimate will determine whether to explore further and with what density.

Gold-bearing ore, extracted at Lichkvaz, will likely be shipped several thousand kilometers up north, to Kapan ore mill, another asset in Armenia recently acquired by Polymetal along with the nearby Shahumyan gold-polymetallic mine.

“Keeping in mind that currently the Kapan processing plant works below capacity, we will increase its productivity ratio, eliminating bottlenecks in underground mining at Shahumyan and shipping ore from Lichkvaz, after the mine enters into operation”, the press service told.

It’s not yet clear whether the ore from Lichkvaz will be processed into a separate gold concentrate, ore will be used in the production of gold-copper concentrate, currently made of Shahumyan ore. This will be determined after ore samples at Lichkvaz undergo a technical study.

As of today, Polymetal is not planning to work with Ararat gold extraction plant, owned by GeoPromining Gold LLC (subsidiary of another Russian mining holding, GeoPromining), which produces dore bars.  

Commenting on environmental studies, the press service told that the environmental impact assessment of the Shahumyan (a.k.a. Kapan) mine is compliant with Armenian legislation, while the EIA for Lichkvaz will be updated as soon as the company finalizes the extraction plan.

Assets of Polymetal Plc in Armenia include Lichkvaz mine and Shahumyan mine with its processing plant. The plant and licenses for both mines have been recently acquired. In November, the company increased interest in Lichkvaz gold mine from 25 to 100%. On March 2, 2016, it announced the acquisition of Shahumyan mine and a mill from the Armenian subsidiary of Dundee Precious Metals, an international mining company based in Canada.

In December 2015, Polymetal Plc was added to the FTSE4Good Index.

Earlier, non-JORC inferred resource estimate for Lichkvaz is 2,4 million tons ore with an average content of 6.9 g/t gold (very high grade compared to other mines in Armenia – editor), or around 0.5 million Troy ounces of gold (15,5 tonnes). 

In 1999, the mine license for Lichkvaz was granted to the Armenian Sipan-1 company. In 2005, the company was purchased by an Australian company, Iberian resources, which in 2007 was taken over by another Australian business, Tamaya resources. The following year, the company divested its Armenian assets.

In 2015, Polymetal bought the mine license from an Armenian subsidiary of Neva-Rus, a financial corporation from Russia.