First Dynasty Mines Announces Ararat Plant Gold Exports

YEREVAN (PRNewswire)–Marcus Randolph–President of First Dynasty Mines Ltd.–announced Wednesday that the Ararat Plant in Armenia has exported its first shipment of gold. The shipment–containing approximately 312 ounces–was sent by commercial air to Johnson Matthey’s refinery in the United Kingdom. The purchaser of the gold was Gerald Metals Inc. of the US. Future shipmen’s–containing approximately 1,000 ounce of gold each–should leave for the UK every two weeks.

"We are very happy with the arrangemen’s we have made with the Armenian government for streamlining gold exports," said Randolph. "This was the first time a private company had shipped gold from Armenia and it demonstrates that we have the necessary transportation–security and customs procedures in place."

The Ararat tailings project is a joint venture between First Dynasty Mines Armenia and Armgold–the Armenian State gold mining company. The joint venture is recovering gold from 12 million tons of tailings–mostly from the Zod mine–using a cyanide-in-leach process. Gold production at Ararat is expected to be 25,000 ounces a year–at a cash cost of $220 per ounce. The project life is eight years. 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.

After repayment of capital recovery–First Dynasty Mines Armenia will receive a minimum of 50 percent of profits–rising to 67 percent if gold recovery is 50 percent or less. First Dynasty Mines Ltd. is earning a 100 percent interest in First Dynasty Mines Armenia by funding the Armenian project development. Completion of the acquisition of a 100 percent interest in First Dynasty Mines Armenia by FDM is expected during 1998.

Feasibility studies are also underway on the Zod and Meghradzor mines and results are expected to be available in June.

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.

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