First Dynasty Armenia 2: Terms Weren’t Disclosed

YEREVAN (Dow Jones)–First Dynasty Mines Ltd. said First Dynasty–its Global Gold Armenia affiliate and the Armenian Ministry of Industry expect to conclude a joint venture agreement whereby Global Gold Armenia will acquire a 50% interest in the Zod and Meghradzor mines on or before Sept. 30. Terms weren’t disclosed. In a news release–First Dynasty said this agreement should lead to expansion of the Zod and Meghradzor mines to an initial production rate of about 200,000 ounces of gold a year–and construction of an associated refinery. The company said it announced in February that it had agreed to invest in Global Gold Armenia–which is a party to a multi-stage joint venture -including restarting the Zod and Meghradzor mines – with the Armenian Ministry of Industry and Armgold–a state-owned gold mining company. Feasibility studies for both mine projects are underway–it noted. The company said the current ore resource has been estimated at 6 million ounces of gold–calculated using Russian ore reserve methodology. The targeted completion date for the feasibility studies is the second quarter of 1998. First Dynasty said it has committed a loan facility of up to $1 million to the Armenian government to facilitate work required at the mines prior to the signing of the definitive agreement–expected by the end of September. Parallel with the redevelopment of Zod and Meghradzor–construction is continuing at the Ararat tailings reprocessing facility. Commissioning is expected in the fourth quarter of 1997–and gold production of 24,000 ounces a year is expected. Global Gold Armenia is managing the project and–under a production formula indexed to gold recovery–should receive about 16,000 ounces a year of the production–First Dynasty said. First Dynasty is a Canadian mining company.

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