U.S.-based Global Gold Corp., owner of a gold enrichment plant in Armenia, plans to invest $4.1 million in exploration in the former Soviet republic this year, a company official said on Thursday.
Ashot Boghossian, head of Global Gold's office in Armenia, told Reuters the company had invested $5.5 million in exploration since acquiring a 51 percent stake in the Tukhmanuk plant last year from local firm Mego Gold.
The cost of the acquisition was $3.5 million. Global Gold has paid $1.5 million and says it will pay the rest within two years. Global Gold, headquartered in Greenwich, Connecticut, made a private placement of some of its shares in March, raising $13 million, Boghossian said. "These funds will be used for financing mining projects in Armenia and Chile," he said.
He added the company would start exploration of the central part of the Tukhmanuk gold deposit from the end of next month. "We expect to extract the first 75,000 tonnes of ore this year," Boghossian said. He added Global Gold would increase the Tukhmanuk plant's current ore processing capacity of 200,000 tonnes a year if necessary.
Armenia, like other gold-rich ex-Soviet states, has attracted foreign investment since the collapse of communism. The Armenian gold-mining unit of Canada's Sterlite Gold Ltd. -- Ararat Gold Recovery Co. -- runs two mines, Zod in eastern Armenia and Meghradzor in the north.
Management owns about 15 percent of Global Gold. The Firebird group owns approximately 20 percent and Farallon Capital 18 percent, the company says on its website.
(RFE/RL photo: A gold mine in Zod.)