Arminfo
9 февраля, 2012
Интервью с президентом компании GeoProMining Романом Худолий

Накануне, 8 февраля, международная группа горнодобывающих компаний GeoProMining, администрация Араратской области и Aрмянский Фонд Социальных Инвестиций подписали протокол о сотрудничестве в сфере социального развития региона. В рамках программы в качестве первого шага компания обязалась выделить 90 млн. драмов на строительство детского сада общины Айнтап. О проектах GPM в области социальных инвестиций и реализации программы корпоративной социальной ответственности (КСО) корреспондент АрмИнфо попросил рассказать президента компании Романа Худолия.

– Роман Николаевич, с подписанием протокола компания, видимо, начинает новый год с новыми социальными программами. Но вначале, пожалуйста, подведите итоги своей работы по КСО за год минувший.

– Группа компаний GeoProMining подводит итоги своей работы в 2011 году, в том числе и в области проектов корпоративной социальной ответственности. Компания продолжает успешное развитие своей деятельности на предприятиях в Армении, Грузии и России, и залогом этого успеха является внимательное отношение компании к своим сотрудникам и жителям регионов, где работают наши предприятия.

В Армении общий бюджет социальных инвестиций GPM Gold и Агаракского Медно-молибденового комбината (АММК) в 2011 году превысил $1,5 млн. долларов. Мы внимательно проанализировали проекты прошлого года, получили рекомендации международных специалистов в области КСО и провели консультации с местными администрациями для определения насущных нужд местного населения. На основе этой информации составлен бюджет 2012 года. Мы продолжим развивать основные направления нашей корпоративной программы “Ресурсы во благо”, уделяя особое внимание проектам по работе с нашими сотрудниками, их семьями, а так же вопросам экологии.

– “Ресурсы во благо” – это девиз или все же философия?

– Ну как Вам сказать, это скорее наш философский подход, ведь устойчивое развитие является одним из основных стратегических принципов GPM в качестве долгосрочного и добросовестного инвестора. Поэтому в 2011 году компания перешла от разрозненных проектов к системному подходу к корпоративной социальной ответственности и запустила комплексную программу “Ресурсы во благо”. Программа охватывает все аспекты социальной ответственности – внимательное отношение к сотрудникам, минимизация воздействия производства на окружающую среду, забота о местных сообществах и тесное взаимодействие с органами государственной власти в области социально-экономического развития. Именно эти сферы станут основными приоритетами компании в области КСО в 2012 году.

– “Один в поле не воин”, гласит мудрая пословица. Насколько успешно в рамках КСО протекает сотрудничество с местными общинами или к примеру с тем же Фондом социальных инвестиций?

– Очень успешно. Уже в течение нескольких лет GPM проводит проекты в сфере социального развития регионов совместно с Армянским Фондом социальных инвестиций при Правительстве Армении, который реализует на территории страны программы Всемирного банка. В рамках стратегического партнерства с фондом и местными администрациями мы вложили 308 млн.драм ($800 000 тыс. долларов) в проект капитальной реконструкции Дома культуры города Варденис, который является важным муниципальным центром для проведения различных культурно-массовых мероприятий. Планируется, что в середине 2012 года работы будут завершены.

Сегодня, как вы знаете, наша компания подписала новое соглашение с Фондом социальных инвестиций и администрацией Араратского района. Это благотворительный проект по строительству детского сада в общине Айнтап, который в ответ на нужды жителей инициировал Президент Армении Серж Саргсян во время своей поездки в Араратский регион в середине прошлого года. Благодаря нашей активной поддержке и фонда, планируется, что новый садик примет первых детей уже в начале 2013 года.

Хочу подчеркнуть, что постоянное взаимодействие с органами государственной власти и местными администрациями дает GPM возможность чутко реагировать на нужды жителей регионов, в которых работает компания, и направлять благотворительные средства в те проекты, которые наиболее актуальны для местного населения. Так, компания регулярно вкладывает средства в социальные проекты: развитие инфраструктуры, в сферу пожарной охраны, энергообеспечения, водоснабжения, ремонт больниц, школ, детских садов. Поддержка социально незащищенных групп населения традиционно является одним из приоритетов социальной деятельности GPM. Мы также оказываем посильное содействие органам местного самоуправления в проведении различных природоохранных мероприятий, благоустройства и создания комфортных условий для жителей Вардениса, Арарата и Агарака. Значительные средства в 2011 году были направлены на приобретение мусороуборочной техники и машин для уборки снега, в 2012 года планируется приобретение подметальных машин и муссоросборных урн для поддержания в чистоте городских улиц.

– Какими социальными привилегиями, если можно так выразиться, пользуются работники ваших предприятий?

–Компания ведет себя как ответственный работодатель: заработная плата на предприятиях является одной из самых высоких в отрасли. Проводятся тренинги по повышению квалификации сотрудников различных специальностей, что способствует профессиональному росту персонала. Сотрудникам предоставляется достойный социальный пакет. Ежегодно проводятся осмотры для сотрудников в лучших медицинских центрах страны. Для детей сотрудников традиционно компания организует красочные новогодние праздники и спортивно-культурные мероприятия.

Сейчас на GPM Gold работает около 815 человек, и запуск новой линии с использованием новой уникальной современной технологии “Альбион” на Араратской золотоизвлекательной фабрике, строительство которой началось в 2011 году, позволит в перспективе создать новые рабочие места. АММК обеспечивает занятостью 930 человек.

Хочу особо отметить важность того, что предприятия GеоProMining в Армении являются монопроизводственными и обеспечивают работой 70-80% работоспособного населения Агарака, Вардениса и Арарата. Это обстоятельство налагает на нас большую ответственность.

– Охрана окружающей среды – один из самых острых вопросов, постоянно находящихся в центре внимания армянской общественности. Поэтому, не редко ваша компания подвергается критике со стороны экологических НПО. Какие меры принимаются для того, чтобы максимально сократить наносимый производством природе ущерб?

– Вы совершенно правы – любое промышленное производство оказывает воздействие на окружающую среду, и ответственность компании состоит в том, чтобы постоянно работать над минимизацией такого воздействия. Компания проводит регулярные проверки воздействия производства на окружающую среду и строго следит за тем, чтобы все нормативные показатели были соблюдены.

Поэтому каждое мероприятие, направленное на развитие компании осуществляется только после подробных консультаций со специалистами по защите окружающей среды. Мероприятия, предусмотренные программой модернизации производства, соответствуют лучшим международным экологическим стандартам, о чем свидетельствует участие в проекте ведущих мировых экспертов-экологов компаний Fraser Alexander, Epoch, и Digby Wells Environment . Новая уникальная современная и очень дорогостоящая технология “Альбион”, которая будет использоваться на новой производственной линии Араратской золотоизвлекательной фабрики, соответствует лучшим мировым экологическим стандартам.

В своей работе мы ориентируемся на нормы и требования экологического законодательства Армении и вместе с тем стараемся прислушиваться к мнению местных специалистов-экологов, представляющих профессиональные экологические организации, отдавая себе отчет в необходимости такого сотрудничества во благо общей для страны выгоды. Но вместе с тем, нередко приходится сталкиваться и с представителями общественных организаций, которые на волне формируемого ими же общественного мнения, без углубленного профессионального экспертного изучения проблемы, поднимают бурю в стакане воды. Мы и в этом случае готовы к диалогу, но желали бы проводить его не в режиме “сотрясания воздуха“.

– Говорят “не хлебом единым жив человек”

– Традиционно, во всех регионах своего присутствия GPM уделяет повышенное внимание поддержке национальных традиций, культуры и искусства. Мы выступили одним из генеральных спонсоров празднования 20-летия независимости Республики Армения, приняв активное участие в организации и подготовке праздничных мероприятий. Как международная компания GPM активно участвует в проектах, направленных на укрепление взаимопонимания и расширения межгосударственного сотрудничества между Россией и Арменией. С 2009 года компания поддерживает проект по улучшению знания русского языка жителями Армении, который проводит Армяно-Российский благотворительный фонд поддержки русского языка под эгидой Посольства России в Армении. GPM финансирует открытие компьютерных классов по интерактивному преподаванию русского языка. Классы оснащают современными техническими средствами связи и подробными методическими пособиями. Этот благотворительный проект продвигает изучение, распространение и популяризацию русского языка в Армении как неотъемлемой части мировой культуры, действенного инструмента межнационального общения, рабочего языка СНГ и развития экономического сотрудничества Армении и России.

Совместно с посольством России в Армении GPM поддерживаем Русский драматический театр им. К.Станиславского в Ереване, который является одним из наиболее выдающихся очагов культуры и популярной площадкой для постановки произведений русских и армянских драматургов. В декабре 2011 года состоялась премьера постановки пьесы по рассказам Сергея Довлатова “Абанамат”, которая стала возможной благодаря финансовому содействию компании.

Ну и само руководство группы никогда не упускает шанса во время визитов в Ереван глубже знакомиться с богатейшим культурно-историческим наследием армянского народа. Во время своей поездки в Армению в конце прошлого года мы с Председателем Совета Директоров группы Симаном Викторовичем Поваренкиным посетили Музей истории Армении и с большим интересом познакомились с экспозицией, посвященной истории горнодобывающей отрасли Армении.

Arminfo
10 February, 2012
unofficial translation Русский 

The international mining group GeoProMining, administration of the Ararat district and Armenian Social Investment Fund signed a protocol on cooperation in the region’s social development. The first step in this programme entails the company’s allocation 90 million drams toward the construction of a kindergarten for the community of Aintap. ArmInfo’s correspondent asked CEO Roman Khudoliy, to speak about GPM’s social investment projects and corporate social responsibility (CSR) programmes.

– It seems that with the signing of this protocol, the new year has begun with new social programmes. But first, please sum up the results of the previous year’s CSR programme.

– GeoProMining is in the process of summing up its results for 2011, including our CSR projects. The company is continuing to successfully develop its business in Armenia, Georgia and Russia, and one guarantee of this success is the company’s attentiveness to its employees and the residents of the areas in which our enterprises work.

In Armenia the total social investment budget of GPM Gold and the Agarak Copper-Molybdenum Mine Complex in 2011 exceeded $1.5 million. We carefully analyzed last year’s projects, solicited recommendations from international CSR specialists and consulted with the local governments to help determine the most urgent needs of the local population. Using this information, we compiled the budget for 2012. We continue to develop the main focus areas of our Resources for Good programme, paying particular attention to our relations with employees and their families as well as issues brought up ecologists.

– “Resources for Good” – is that your motto or is it more of a philosophy?

– Well, I would put it this way: it is our philosophical approach; after all, sustainable development is one of the core strategic principles of GPM as a long-term and conscientious investor. So in 2011 the company decided to shift from disconnected projects to a systemic approach to corporate social responsibility, and we launched the Resources for Good programme. It encompasses all aspects of social responsibility – looking after employees, minimizing the environmental impact, taking care of local communities and closely cooperating with government officials in social and economic development efforts. These are the areas that will be the company’s top CSR priorities in 2012.

– As they say, one cannot fight alone. How successful has your CSR cooperation been with local communities or, for example, with the Social Investment Fund?

– Very successful. For several years now GPM has been implementing regional social development projects together with the Armenian Social Investment Fund of the Government of Armenia, which implements World Bank programmes within our country. As a part of our strategic partnership with the fund and local authorities, we invested 308 million drams ($800,000) in a major reconstruction project for the House of Culture in the town of Vardenis, which is an important municipal centre for holding various cultural and public events. This work should be completed by mid-2012.
Today, as you know, our company has signed a new agreement with the Social Investment Fund and the administration of the Ararat district. This is a charity project to build a kindergarten for the community of Aintap. The project that was proposed by Armenian President Serzh Sargsyan in response to the residents’ needs during his visit to the Ararat district in the middle of last year. Thanks to our active support and that of the fund, the new kindergarten will welcome its first kindergarteners in early 2013.

I would emphasize that continual cooperation with government bodies and local authorities provide GPM an opportunity to respond to the needs of the residents of regions where the company works and to allocate charity funds to the projects which are most essential for the local population. Thus, the company regularly invests in social projects: infrastructure development, fire-fighting capacity, energy supplies, water supplies, repair of hospitals, schools and kindergartens. Support for the most vulnerable segments of the population has traditionally been one of the priorities of GPM’s social efforts. We also make a diligent effort to cooperate with local self-government in engaging in various environmentally oriented activities, town maintenance efforts and the creation of comfortable living conditions for the residents of Vardenis, Ararat and Agarak. In 2011 a substantial amount of funds went toward the acquisition of garbage removal equipment and snowploughs. In 2012 street sweepers and litter disposal containers will be acquired to help maintain cleanliness on the city streets.

– What kind of social privileges, if they can be called that, do the employees of your enterprises enjoy?

– The company behaves as any responsible employer should: salaries at our enterprises are among the very highest in the industry. Training opportunities are provided in various specialities, which helps ensure the professional growth of personnel. Employees are offered a decent social benefits package. Each year all employees undergo medical check-ups in the best medical centres of the country. The company traditionally organizes lively New Year’s celebrations and sports and cultural events for the children of employees.

Right now approximately 815 people work at GPM Gold, and the launch of a new processing line using the unique cutting-edge Albion technology at the Ararat gold extraction plant, the construction of which began in 2011, will create new jobs in the near future. The Agarak Copper-Molybdenum Mine Complex employs 930 people.

I would like to point out the importance of the fact that GeoProMining’s enterprises in Armenia are the core industries of these towns, employing 70-80% of the workforce in Agarak, Vardenis and Ararat. This fact places a great responsibility on us.

– Protecting the environment is one of the most pressing issues persistently facing Armenian society. Thus it’s not uncommon to hear criticism of your company coming from environmental NGOs. What measures are being taken to minimize damage to nature?

– You are quite right – any industrial production has an impact on the environment, and it is the company’s responsibility to minimize this impact. Our company regularly assesses the impact of our operations on the environment and strictly monitors the situation to ensure full compliance with norms.

Thus every step that is taken toward further development of the company is preceded by in-depth consultation with environmental protection specialists. The steps laid out in our production modernization programmeme correspond to the best international practices, as demonstrated by the participation of world class experts and environmental firms such as Fraser Alexander, Epoch, and Digby Wells Environment. The new unique and very expensive Albion technology, which will be used at the Ararat gold extraction plant, corresponds to the highest world environmental standards.

In our work we are oriented toward the regulations and requirements of environmental protection legislation of Armenia, and at the same time we strive to listen to the opinions of local ecologists representing professional environmental organizations, knowing full well the value of such cooperation for the common good of the country. At the same time, it is not uncommon for us to come up against representatives of public organizations which, playing off public opinion formulated by them and without in-depth professional expertise on a particular problem, can stir up a tempest in a teapot. In such situations we are also open to dialogue, but we would prefer that this dialogue take place without a big brouhaha.

– As they say, “man cannot live on bread alone…”

– Traditionally, in all areas where we operate, GPM pays a lot of attention to supporting national traditions, culture and art. We acted as one of the general sponsors of the celebrations of the 20th anniversary of Armenia’s independence, playing an active role in the organization and preparation for celebratory events. As an international company, GPM plays an active part in projects aimed at strengthening mutual understanding and expanding bilateral cooperation between Russia and Armenia. Since 2009 the company has been supporting a project aimed at improving the Russian language skills of residents of Armenia. The project is run by the Armenian-Russian Philanthropy Fund for Support of the Russian Language under the auspices of the Russian Embassy in Armenia. GPM finances open computer classes for interactive Russian language instruction. Classes are equipped with modern communication technologies and detailed instructional literature. This charity project promotes the study, advancement and popularization of the Russian language in Armenia as an inseparable part of world culture, a practical instrument for international communication, the working language of the CIS and development of economic cooperation between Armenia and Russia.

Together with the Russian Embassy in Armenia, GPM supports the Stanislavsky Russian Drama Theatre, one of the most prominent cultural institutions in Yerevan and a popular venue for staging plays by Russian and Armenian playwrights. In December 2011, a play called Abanamat, based on several of Sergei Dovlatov’s short stories, debuted at the theatre thanks to financial support from our company.

During visits to Yerevan the group’s top management never passes up the opportunity to become better acquainted with the extremely rich cultural and historical heritage of the Armenian people. During a trip to Armenia near the end of last year, Siman Povarenkin and I visited the Museum of the History of Armenia and with great interest explored the exposition dedicated to the history of Armenia’s mining industry.

8 February 2012, Yerevan

GeoProMining (GPM or the Company), the diversified international mining group, today signed a cooperation agreement with Ararat Region authorities and the Social Investment Fund on the social development of the region, as part of which the Company will co-finance the construction of a kindergarten in the community of Aintap. GPM is involved in the project as part of its social-responsibility programme Resources For Good.

The idea for the new kindergarten came from Armenian President Serzh Sargsyan. During a visit to Ararat Region on 6 July 2011, Sargsyan learned about progress made on social and economic development in the region. The president also met local inhabitants who told him that one of their biggest needs was for a new kindergarten.

Construction began in July 2011, and will cost 300 million drams. The Armenian government will contribute 80 million drams, GPM 90 million and the Social Investment Fund 130 million.

After the ceremony, officials from GPM, the Ararat Region administration and the Social Investment Fund were given a tour of the construction site and noted the rapid progress made to date. The work is planned to be completed in October 2012.

“We have enjoyed a constructive working relationship with GeoProMining, one of the largest mining companies in our region, for some time,” Ararat Region governor Edik Barsegyan said. “GPM takes its social mission very seriously, and helps the city and the region to improve its infrastructure, supports education, culture and sport and programmes for young people. Support for the kindergarten is further evidence of GPM’s attitude to the needs of our region.”

“We are delighted to support this project, which directly meets the needs of the local population and pushes forward the development of the region as a whole – one of the goals of our fund,” said Ashot Kirakosyan, executive director of the Social Investment Fund. “This is not the first project we have undertaken with GeoProMining. We have also worked with them on the reconstruction of the House of Culture in Vardenis. In GeoProMining, the Armenian Social Investment Fund has found a reliable and willing partner, and we are delighted to be continuing our collaboration.”

At the ceremony GPM CEO Roman Khudoliy said: “As a socially responsible company, GeoProMining is actively involved in the social and economic development of the regions where we have assets. We maintain a continuous dialogue with local authorities and administrations, and can therefore react quickly to meet the needs of local communities. Helping to develop the social infrastructure in these regions is one of the priorities in our Resources For Good programme, and we are delighted about this public-private partnership that will help meet an urgent need of the local community.”

About GeoProMining:

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of gold and other metals assets. GeoProMining engages in mining activities in Armenia, Georgia and the Russian Federation.

24 December 2011, Yerevan

GeoProMining, a diversified international mining group, has organised a New Year party for the children of employees at its Armenian assets, GPM Gold and the Agarak Copper-Molybdenum Combine (ACMC). More than 500 children will today travel to Yerevan, where the company has organised a New Year show and presents. The party is part of GPM’s social-responsibility programme Resources For Good.

The entertainment organised by GPM includes a special performance by the Yerevan Drama Theatre. Afterwards, Father Christmas and other magic characters will entertain the kids in the foyer with sweet treats. The children will take part in games and competition, and each of them will be given a Christmas present of educational books and encyclopaedias specially chosen for different age-groups.

“GeoProMining is very aware of its social mission, particularly in those regions where our facilities are the main employers. Looking after our employees and their families is one of the most important components of our social-responsibility programme Resources For Good, and we have planned a number of events for our employees and their children in 2012,” GPM General Director Roman Khudoliy said.

“We have worked hard with our HR department to get today’s party ready – choosing the programme and the presents, and organising transport, as our facilities are located a significant distance from Yerevan. The Company does everything it can to look after its professionals, and this event demonstrates GPM’s concern for its employees far better than any words can. For next year we have planned a special programme for employees’ children, including lots of cultural and sporting events,” GPM Gold Director of External Relations Ruzanna Grigoryan said.

About GeoProMining:

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of gold and other metals assets. GeoProMining owns mining assets in Armenia, Georgia and the Russian Federation. In Armenia, GeoProMining owns the Agarak Copper-Molybdenum Combine (ACMC) and GPM Gold, the company developing the Zod mine and managing the Ararat gold extraction plant.

15 December 2011, Yerevan

GeoProMining, a diversified international mining group, has supported a production of Abanamat by Russian writer Sergei Dovlatov at the Stanislavsky Russian Drama Theatre in Yerevan. The production is part of a project to boost knowledge of the Russian language in Armenia that GPM supports through its corporate social responsibility programme Resources For Good.

Abanamat is based on several of Dovlatov’s short stories (“The Zone”, “Underwood Solo”, “The Reserve”, “New American”, “Armenian Themes”), with the author as the central character in each case getting into real-life situations that are by turns absurd and amusing, and sometimes affecting or simply sad. Almost all members of the theatre are involved in the production. The director is Alexander Grigoryan, a highly respected and decorated director and Artistic Director of the Stanislavsky Theatre.

GPM actively supports initiatives in culture and the arts in all regions where it has a presence. In Armenia, the Company supports the Stanislavsky Russian Drama Theatre, one of Yerevan’s outstanding cultural institutions and a popular space for stagings of works by Russian and Armenian writers.

“GeoProMining works hard to strengthen cooperation between Russia and Armenia, including in culture and the arts,” GPM General Director Roman Khudoliy said. “As an international company we fully understand the importance of information and cultural exchange, and projects such as this one not only lead to greater knowledge of the Russian language but also boost mutual understanding between our countries.”

About GeoProMining:

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of gold and other metals assets. GeoProMining owns mining assets in Armenia, Georgia and the Russian Federation. In Armenia, GeoProMining owns the Agarak Copper-Molybdenum Combine (ACMC) and GPM Gold, the company developing the Zod mine and managing the Ararat gold extraction plant.

GeoProMining is considering moves further downstream in antimony production as it looks to strengthen its position in a market dominated by China.

The company has antimony-gold mining assets in Russia’s Yakutia republic, as well as other base and precious metal operations in Georgia and Armenia.
It produced 2,643 tonnes of antimony in the first half of the year, marking 74% growth from the corresponding period in 2010. It expects concentrates output to increase by around 30% in its 2011-12 production season, group first vp Sergei Nossoff told Metal Bulletin.

While it will continue to develop the mining assets, which were acquired in 2008 and opened in 2010, it is also interested in moves further downstream.

“Antimony is a very exciting metal, with more modern-day applications, and we want to expand further our production, including downstream production,” Nossoff said.

“We’re looking at a number of suitable technology solutions and we are thinking of building a smelter in Russia, close to Europe. There are a number of development routes we’re taking to further expand and feed the European market. It’s a market that you want to do business with,” he said.

To maximise the value realised on its concentrates – which are around 66-67% antimony with a significant gold content – GeoProMining has forged a more direct relationship with buyers in China, he said.

“We got involved in this business and started developing the mines and looking at sales of antimony concentrate. We discovered that between us and the final end user of our product there were maybe seven or eight layers of traders present,” he said.

“So gradually we got rid of them one by one and started dealing with end-product distribution, which improved our profit margins greatly,” he said.

China is the world’s largest producer of antimony, but a ban on new foreign investment in mining, a crackdown on illegal mining and a consolidation of smelting capacity has placed severe constraints on supply in the past two years.

As domestic demand for antimony grows in end-products including fire retardants, batteries and capacitors, the supply of the metal outside China is forecast to grow increasingly tight over the medium term.

Antimony was identified as one of 12 critical raw materials for the EU in a European Commission-backed report published last year, primarily due to the lack of supply outside China.

“It’s clear from the [EU] report that industry and politicians see a lot of future in antimony and other rare earth metals; they need to be strategically preserved and supply should not be dependent on one nation or one producer,” Nossoff said.

“You have a look at substitutes and I believe there aren’t many for antimony, so it’s got that uniqueness and rarity in the world. We’re looking to expand that business and it’s very interesting for us, we’re looking to become an increasingly significant player,” he said.

The company’s antimony assets – the Sentachan and Sarylakh-Surma mines in Yakutia – have some of the highest known ore grades in the world, with a combined grading of 14%, as well as significant gold content.

Collectively, both mines contain more than 5% of global antimony reserves, according to data presented by the company. It has committed more than $30 million in capex to develop the assets, and both have a combined mine life of 17 years.

“We need around 100,000 tonnes of ore to produce 7 tonnes of antimony, which is fantastic. You might need 30 times more ore with a 1% content, but it’s just a phenomenal deposit and we’ve been very lucky,” he said.

“If [a Chinese producer] operate a 1.5 km underground mine and gets around 1% content in the ore, the cash costs will be very high, which pushes up the price for the underlying commodity,” Nossoff told Metal Bulletin.

“Obviously there are a lot of cost efficiencies in buying good-quality concentrate … We believe we have a certain bargaining position even in China that can allow us to get the best price,” he said.

Virtually all the concentrate it produces is sold into China, shipping out of Port Magadan.

While antimony miners in China face declining ore grades, metal producers in the country are now operating at low utilisation levels and are growing more dependent on imported concentrates.

“Their grades are very modest I would say in comparison to ours. What we actually found was that there were three Chinese producers with a lot of downstream capacity [and only 50% is being used],” he said.

“Their owned supplies were 30% in some cases so they’re looking for that extra 20% from other miners or traders naturally,” he said.

China’s growing reliance on foreign concentrates was identified in data presented by Antaike earlier this year, as it warned that the domestic market was in deficit last year. The country imported 27,700 tonnes of antimony in concentrates in 2010, up 146% from 2007.

While GeoProMining recognises value in moving further downstream to maximise value on its output, it is also aware there are risks in becoming an antimony metal producer.

“There’s a danger for us exploring further downstream. From one side it’s attractive because it gives you a complete cycle but on the other side you have to brand the product and develop the product,” he said.

“You’ve got companies like Twinkling Star, which has got its brand known worldwide and … there is never an issue about quality. You’ve also got other producers that also produce good steady downstream products,” he said.

GeoProMining would also welcome the fungibility provided by an official trading exchange, he said.

“Hopefully metal will get more recognition and get officially traded – the LME would be fantastic, or Shanghai. And that would give further quotations rather than fragmented quotations from different sources,” he said.

“Especially after the crisis happened you had $4,000 [per tonne] in one place and $6,000 in another. You can’t be $2,000 apart, it doesn’t make sense,” he said.

Metal Bulletin trioxide-grade antimony prices were $13,000-13,600 per tonne on December 2. It traded as low $4,100-4,300 per kg in early 2009 before soaring dramatically as smelter closures in China began to bite.

© Metal Bulletin

6 December 2011, Yerevan

GeoProMining, a diversified international mining group, announces that Armenian Deputy Prime Minister Armen Gevorkyan visited the Agarak Copper-Molybdenum Combine (ACMC) during an official trip to the Megri region, where he was briefed on the company’s production facilities and investment programmes.

Mr Gevorkyan visited the new enrichment facility that the company is building and which is fitted out with cutting-edge flotation equipment. Company management told the deputy prime minister about progress on construction of the new building, planned to be completed by the end of the year, as well as the staff training programme and organisational changes at the facility. The investment programme will see some 40 jobs created at ACMC.

Following his visit, Mr Gevorkyan praised the pace of modernisation at ACMC, which is one of the largest production facilities in the region, and noted in particular the importance of creating new jobs for the future of the Agarak region.

In June 2009, the government of Armenia provided ACMC with stabilization credit for anti-crisis measures to support a program to reduce costs and increase ACMC’s competitiveness. In December 2009, ACMC began repayment of the government credit. In 2010, ACMC returned to profitability, and is seeking to further improve its manufacturing and financial performance in 2011-2012.

Notes to editors

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of gold and other metals assets. GeoProMining engages in mining activities in Armenia, Georgia and the Russian Federation.

28 November 2011, Moscow

GeoProMining Group (“GPM”), a diversified international mining group, announces select unaudited IFRS financial results for the six months ended 30 June 2011. Consolidated revenue increased 50%, compared to the six months ended 30 June 2010 to USD 181.8 mln and EBITDA amounted to USD 75.0 mln (up 87% y-o-y).

IFRS results for GPM are provided in the tables below:

Key financial highlights

USD mln, unaudited	1H 2011	1H 2010	Change, %
Revenue	181.8	120.9	50%
EBIDTA	75.0	40.1	87%

Key operating highlights

	Units	1H 2011	1H 2010	Change, %
Gold	Koz	65.9	65.1	1%
Copper	t	6,351	6,473	(2%)
Antimony	t	2,643	1,520	74%
Molybdenum	t	135	95	42%
Silver	Koz	113.7	48.6	134%

Commenting on the results, GPM CEO Roman Khudoliy said:

“We are pleased to report strong financial and operational performance in the first half of the year, with attractive fundamentals across all of our key metals.

“Having built our business through a series of successful acquisitions, we continue developing and upgrading these assets through an ongoing investment programme. We are committed to further enhancing our profitability and maintaining our competitiveness by improving our overall operating efficiency and production capacity.”

About GPM:

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of gold and other metals assets. GeoProMining engages in mining activities in Armenia, Georgia and the Russian Federation.

With the price of gold tripling over the last five years, some commentators have suggested that a bubble is forming in the gold market. Markets can become overheated, of course, but I believe that what we are seeing today is better explained as a return to a gold standard. Essentially, people want to know that their money is safe, especially with the extra liquidity and inflation that we now see in the global economy.

For Russia and the Commonwealth of Independent States, this represents a considerable opportunity. Russia still has untapped gold reserves that could provide a stable and significant pillar of the economy for years to come. Gold miners were among the first Russian companies to issue initial public offerings, and sustained private and public investment will be the key to securing the industry’s future.

For private and even for institutional investors around the world, protecting their capital has never been more important. We can forget about the concept of stability as it was in our parents’ day, when one could reasonably expect healthy returns on bank deposits over a period of 10 to 15 years. If people today have any faith left in banks, it is in central and state-owned banks at best. Moreover, inflation, currency swings and shifts in purchasing power all erode the value of individual deposits.

Elsewhere, share prices have been rocked by volatility for more than three years, with benchmark indexes still below 2006 levels. Currencies — whether the dollar, British pound or euro — are no longer the inviolable state-backed beacons of stability they once were. Nor is sovereign debt necessarily a safe haven, with even the United States having its credit rating downgraded and experts talking about multiple defaults in the euro zone.

Debt issues in Europe are still being resolved, and there will be a lot more money printed and borrowed. These issues will take time to be resolved. European countries like Greece, Portugal, Italy and Spain are concerned about the sustainability of their growth potential and the heavy exposure of their banking institutions to each other’s debt. We see more and more wealthy nationals from these countries shifting toward gold.

Gold, by contrast, has remained attractive to individual and institutional investors as a store of absolute value. In emerging markets, particularly where financial institutions are underdeveloped, people are buying physical gold — and at above-market prices. Russia is no exception as the world’s sixth-largest consumer of gold last year.

Central banks also store significant amounts of the metal in their reserves, with those from emerging economies among the biggest buyers. Again, Russia is no exception. The Central Bank has increased its gold stocks by about $8 billion this year, despite some limited sell-off to defend the ruble. By contrast, mature economies are selling gold to support their own liquidity.

Yet even as demand has increased, supplies are dwindling. There are few gold fields left with reserves of 30 million to 40 million ounces. Even major mining companies are looking closely at deposits of less than 5 million ounces. Some underexplored areas remain — including in the Sakha republic and Siberia — but nobody expects that giant deposits will be discovered.

Nor are production costs getting any cheaper, despite the introduction of more modern mining methods and technology. Artisanal mining, the main technique used in the Soviet Union, is declining, as deposits of placer gold dwindle. Industrial mining, which has replaced it, is more expensive. Since input costs such as fuel, equipment and chemicals are rising, getting the metal out of the ground is becoming more difficult technically, and environmental requirements are becoming stricter.

Not even the bravest economist at present would try to forecast the outlook for various economies over the next 10 or 15 years. But current trends clearly illustrate that economic influence is shifting toward consumer countries and away from producers. In 20 years, consumer nations — those with large populations, a middle class and a young and educated population — will wield much greater influence than their producer counterparts.

This presents natural resource-based economies such as Russia with something of a balancing act. Russia has for some years declared its intention to rebalance the economy away from its traditional energy bias in favor of innovation, financial services and high-tech sectors such as nanotechnology. But the country’s mineral wealth still has much to offer. Some metals, such as lead, are no longer as important as they were, but others, such as gold and copper, are crucial to the global economy and Russia as well.

Production requires investment and supporting infrastructure to mine the ore, process it and deliver finished products to consumers, while meeting sustainability and social commitments. Private companies, both Russian and foreign, have already demonstrated that they have the appetite to make Russia’s gold-mining industry a success. This, combined with the state’s efforts to create a favorable investment environment, should lead to the continued successful development and growing importance of the Russian gold industry for years to come.

Siman Povarenkin, a global investor in metals, mining and medical technology in Asia, Europe and Latin America, is the main shareholder in GeoProMining.

This comment appeared in The Moscow Times (www.themoscowtimes.com)

GeoProMining (“GPM” or the “Company”), a diversified international mining group, is pleased to announce the start of its new 2011/2012 production season of the Company’s gold and antimony deposit at the Sentachan mine in Yakutia.

Representatives of the Territorial Administration of the Federal Service for Ecological, Technological and Nuclear Supervision completed the compulsory inspection of the technical condition of the Sentachen mine and gave permission to begin the 2011/2012 production season.

This event was preceded by extensive preparatory work carried out over a considerable period of time, as the mine is located in a remote region with limited vehicle access. Work can be carried out on the mine on a seasonal basis.

Traditionally, the production season in Sentachan begins in October and ends in April of the following year. Since September 2011, the Company has been actively preparing for the start of the 2011/2012 season: equipment, personnel and supplies for resident employees were transported by helicopters to the mine. Technical resources and the necessary supply of diesel fuel were delivered by road at the end of the previous season in April 2011. The road is opened in February and runs through the frozen beds of the Elga and Adycha rivers and is used until the end of April for the transfer of ore and materials for the next season.

During the 2011/2012 season, the Company intends to replace and upgrade mining equipment as it seeks to increase production volumes. GeoProMining regularly modernizes and provides technical upgrades to its operations in Yakutia.

Notes to editors

GeoProMining, founded in 2001, is an international, privately held company with a diversified base of metals assets. Its production capacities include Dore gold bars, as well as copper, molybdenum and antimony concentrates. GeoProMining engages in mining activities in Armenia, Georgia and the Russian Federation.