Ararat Plant Pours First Gold

YEREVAN (PRNewswire)–The government of Armenia and First Dynasty Mines jointly announced Thursday that the first bar of gold was poured on Wednesday at the Ararat Tailings Plant.

The ceremony was presided over by Acting President and Prime Minister Robert Kocharian. His Holiness Karekin I–Catholicos of All Armenia’s–opened the ceremony and blessed the plant.

During his speech–Kocharian said–"First Dynasty and Armgold have done an excellent job in cooperating to build this plant. I look forward to a rapid extension of this cooperation to the redevelopment of the Zod and Meghradzor Mines."

Marcus Randolph–President of First Dynasty responded by saying–"It has been less than thirteen months since First Dynasty came to Armenia. To finalize all necessary agreemen’s and construct a plant in such a short period of time reflects the high quality of local craftsmen and contractors and illustrates the willingness of the government to support foreign investment."

The Ararat Plant cost approximately $12 million to construct and is believed to be the first gold project in the former Soviet Union to have been built on budget by a western company.

Gold production is expected to be 25,000 ounces per year at a cash cost of $220 per ounce ($20 per ounce lower than previous estimate). Profits from the plant are to be distributed based on a formula indexed to metallurgical recovery.

First Dynasty Mines Armenia (formerly Global Gold Armenia) will receive a minimum of 50 percent of profits rising to 67 percent if gold recovery is 50 percent or less.

The $12 million capital cost of the project will be repaid preferentially to First Dynasty Mines Armenia over four years–or until fully recovered if insufficient operating cash flow is available during the first four years of operation.

First Dynasty Mines Ltd. is earning a 100 percent interest in First Dynasty Mines Armenia by funding Armenian project development.

As of December 31–1997–DM’s interest in First Dynasty Mines Armenia was 66 percent reflecting investment of $17.5 million.

First Dynasty’s common shares trade on the Toronto Stock Exchange under the symbol FDM and are quoted on the NASDAQ National Market under the symbol FDYMF.

First Dynasty is one of the major foreign companies investing in Armenia and its interest in Armenia’s gold reserves sparked controversary when Azerbaijan–through its foreign ministry–attempted to lay claim to the Zod Gold mines.

Azerbaijan claimed that the mine was in its territory and the agreement signed with Dynasty was in violation of international norms and principles.

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