Armenian Blister Copper Producer ACP Reported $9 Million Net Profit

August 03, 2012 | 10:49

YEREVAN.- Armenian blister copper producer Armenian Copper Programme
CJSC earned 3 bln 676 mln Armenan drams of net profit in 2011 (about $9
million at current exchange rate). As told in the annual report of ACP
(part of Vallex Group holding) for 2011, profit has declined by 4.6%
compared to 2010.

The company reported 42 billion 668 million AMD in revenue in 2011,
the majority of which, 42 bln 534 mln (+15.1% against 2010, or ~$104.4
mln), was earned from blister copper sales.

“A” grade blister copper, produced by the company, has gold grade of
up to 150 g/t, silver – up to 300 g/t (copper – no less than 98.5%).

Gold value in end product accounts for around 25-35% of sales revenue.

Within cost of sales, 32.8 billion drams were spent for copper
concentrate, which is 12.5% more than in 2010. The supply mix of ACP’s
smelter in the town of Alaverdi consists of concentrate from Drmbon
deposit in Nagorno-Karabakh (55%, run by another Vallex subsidiary,
Base Metals CJSC) and that of Zangezour copper-molybdenum combine CJSC

The company paid 349 million drams in environmental fees; taxes
other than income tax equaled 93.5 million. Income tax amounted to
1.1 billion, compared to 932.5 million in 2010, deferrals reducing
this to 842.2 and 802 million respectively.

In 2011 another Vallex Group entity, Teghout CJSC, signed a credit
line agreement with VTB Bank Armenia, totaling $283.3 million. The
funds are attracted for development of Teghout copper-molybdenum
deposit in the north of Armenia. Soviet exploration estimated its
resource at 1 million 630 thousand tons of Cu and 99 thousand tons
of Mo, which makes it the second largest nationwide.

As told to at Vallex Group press service, total investment
in Teghout mine development and processing plant construction have
reached about $155 million. This included purchases of fixed assets
and mining equipment. In 2010 the company invested 6.6 billion AMD
in fixed assets, while in 2011 this was augmented to 14.8 billion.

Besides, in 2012 Teghout CJSC obtained insurance coverage of around
$283 million for its property, plant and equipment, and ACP CJSC
allocated 7.6 billion AMD for the same goal.

Total assets of Armenian Copper Programme CJSC at the end of 2011
reached around 60.7 billion drams (around $149 million). 100%
of company’s shares are owned by the president of Vallex Group,
Valery Mejlumyan.

The main properties of Vallex in Armenia and Artsakh (the
Nagorno-Karabakh Republic) are Drmbon copper-gold deposit and
processing plant in Martakert district of the NKR, copper smelter
in Alaverdi, and Teghout copper-molybdenum deposit with processing
plant under construction (both in Lori marz of Armenia). Alaverdi
copper deposit, mined in Soviet period, is now idle.

From: Emil Lazarian | Ararat NewsPress

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Emil Lazarian

“I should like to see any power of the world destroy this race, this small tribe of unimportant people, whose wars have all been fought and lost, whose structures have crumbled, literature is unread, music is unheard, and prayers are no more answered. Go ahead, destroy Armenia . See if you can do it. Send them into the desert without bread or water. Burn their homes and churches. Then see if they will not laugh, sing and pray again. For when two of them meet anywhere in the world, see if they will not create a New Armenia.” - WS