In terms of mining projects, a clear priority for us is Teghout copper molybdenum deposit, not only due to its scale, but also because the other key project - modernisation of the Alaverdy copper smelter, would be pending for Teghout to secure long-term concentrate supply to the smelter.

As part of its strategic decision to move towards upstream integration, the company has acquired licenses for exploiting two major Armenian deposits, and conducting exploratory works at six other locations. Aside from Teghout, the company currently possesses 25 year exploitation rights for Alaverdy copper deposit as well. Development and expansion of Alaverdy deposit after the experimental mining conducted in 2002-2003 is a project that would allow extracting about 65,000 tons of copper with an initial investment of about USD 6.6 mln.

The company, together with its affiliates, is doing extensive exploration work at other deposits and prospects such as Hankadzor (copper), Tandzout (copper-gold-sulfur) and Margahovit (gold).

ACP has committed itself to implementation of what we call Armenian Copper Programme - one that is aimed at efficient processing of copper (as well as other non-ferrous) resources of the country. Part of the program has to do with reconstruction of metallurgical facilities the company possesses, with adjacent production of sulphide acid, thus securing environmentally friendly copper processing. Following directions outlined in its strategic plan, the company has started preparatory work for complete reconstruction of metallurgical facilities. The current metallurgical technology suffers from an environmental drawback, as it does not allow utilization of sulphide gases, which therefore results in atmospheric emission of sulphide anhydride. In order to tackle this challenge, as well as to multiply smelting capacity with parallel increase of its efficiency, we have contracted Outokumpu Lurgi (then Lurgi Metallurgie GmbH) to conduct a Prefeasibility Study for reconstruction of metallurgical facilities. Findings of the study finalised in 2001 suggest a potential of quadrupling smelting capacity at the factory, with a complete utilization of resulting sulphide gases for production of sulphide acid. In order to achieve this, the company would need to invest about € 44 mln.

In addition to this modernisation option, the company is exploring other possibilities as well. In particular, studies were made for the use of oxygen flame smelting technology in Alaverdy, and notable volume of equipment was imported from Europe for this purpose. Recently discussions with Ausmelt have taken place to try to assess the feasibility of installing Ausmelt technology. Still, any serious advance in the modernisation project would be dependant on securing primary raw material supply for the whole duration of such project.