Amulsar Questions and Answers

Geoteam CJSC
37 Hanrapetutyan street, 4 floor
Yerevan 0010, Armenia
tel. /fax +374 10 546037 / 586037

The Project is the largest private investment project in Armenia at
the moment. According to preliminary estimates, the Project will
contribute an estimated USD 488 million to the budget of the RA during
its operational life, in the form of taxes and royalties.
In response to the questions addressed to Geoteam

During the last 8 years Geoteam CJSC has held 11 public hearings and
more than 170 meetings with the communities. Taking into consideration
the fact that the Amulsar mine is not being operated yet, the number
of such community meetings is unprecedented. During these 8 years
representatives of the affected communities have been provided with
the details of the Project, issues have been discussed and responses
given to any question raised. We have achieved an atomosphere of
mutual trust and continuous open communication with the communities.

Nevertheless, even if one community resident is not satisfied with the
answers to his/her questions, we are happy to discuss the questions
addressed to us in the form of the open letter sent on March 12th.

Below is the brief content of the questions and the answers of the
Company specialists:

1. Since 2011 the location of the heap leach facility has changed
three times. `…What advantages does the selected area have as
compared to the first two; whether the ecological, health and
environmental risks are smaller or greater, since the area is closer
to the communities than the previous ones’.

First of all, we would like to remind that about 600 heap leach
facilities are operating all over the world, including in the USA,
Canada, Australia, Chile, Russia, etc. Some of them are adjacent to
communities, forests, and water resources. The Amulsar HLF will be a
modern facility, subject to current best-practice design principles.

A geotechnical survey is carried out before selecting a location for
the heap leach pad, and if the area meets stability, safety, and other
technical criteria, it is deemed suitable. In this respect, two former
locations selected in 2011 and 2013 were not significantly better or
worse as compared with the current location.

According to the specialists and independent experts, the pad could
operate safely for the environment in either the two former locations
or the currently selected one.

However, two amendments were made in the Armenian legislation during
the last 3 years. According to the first amendment, the immediate
impact zone of Lake Sevan was extended in 2012 to cover the area where
the heap leach facility was planned at the time, prohibiting ore
processing in this area. And according to the second amendment, a 3 km
buffer zone was set in 2013 around the inactive Spandaryan-Kechut
tunnel, and this area was also considered as part of the Lake Sevan
immediate impact zone.

Irrespective of our belief that both the first and second locations
would have ensured safe operation of the pad from environmental,
health or other viewpoints, to stay compliant with the Armenian
legislation the Company has changed the pad location.

The new location was selected as a result of the two-month activity of
the joint working group with the RA Government.

Furthermore, the Company has invested significant funds and 5 years of
work to identify the environmental risks not only of the pad, but also
all the infrastructre of the Amulsar mine, and to design the
mechanisms of their management, involving about 50 international and
national specialists and organizations, which is unprecedented for
Armenia and also exemplary in complying with international standards.

2. `Which international standards envisage building the cyanide pad
500m far from the community, within the newly planted orchards of
Gndevaz, if it is internationally accepted that such facilities should
be 30 km far from the settlements?’: We would be happy to familiarize
ourselves with any regulatory document, according to which `it is
internationally accepted that such facilities should be 30 km far from
the settlements’.

We and numerous international experts who have worked on the Project
are not familiar with any international standard which sets such a
limited zone around the heap leach pad. As we have already mentioned,
as long as the pad is properly managed and complies with technical
requirements, it can operate safely in the neighbourhood of

In 2013 we visited the USA with the mayors of Gndevaz, Gorayk and
Saravan and visited the Cripple Creek and Victor mines, where various
infrastructure, including the heap leach facility, are 500m from the
town of Victor and 900m from Cripple Creek. There are many other such

The Amulsar pad will be 1 km away from the nearest community, Gndevaz,
and at a considerably lower elevation.

Finally, Geoteam employees have been working closely with the
inhabitants of the adjacent communities for 8 years, having
established warm and friendly relationships with them. Most of our
employees – engineers, geologists, social and environmental
specialists – spend a considerable part of their working time at the
communities and Amulsar. The safety of the communities and our staff
is top priority for us, and we are working to assure this in the

3. `You plan to use 2,000 tons of sodium cyanide per year. 4 million
tons of solution will be obtained for preparing a solution with 500
mg/l concentration. You will pour out this 4 million tons in a year on
the heap leach pad with an area of 134 ha and you plan to develop 2
ponds: collection ponds (with 200,000 m3 capacity) and HLF storm event
ponds (with 170,000 m3 capacity). We would like you to explain what
ecological calamity may be caused to Vayots Dzor by the 3.63 Mt
cyanide solution and waters in 134 ha HLF area polluted by million
tons of heavy metals, cyanide, hydrochloric acid from rainfalls and
snowmelt, flowing into the Arpa River, as a matter of fact, all the
villages irrigate the fields by the waters of Arpa’.

The heap leach is a closed cycle facility and there will be no
industrial discharge to the Arpa River or any other environmental

Cyanide is used to extract gold from the ore stacked on the heap leach
pad, which is designed to ensure there are no releases, thus
preventing the possibility of both environmental and economic lossess.

The calculations of the author of the letter regarding the 3.63 Mt of
cyanide solution is likely a result of misunderstanding. As mentioned
in many sections of the EIA report, the cyanide solution will be
supplied by a closed circulation system. This means that at a given
period there will be 415-470 m3 circulating diluted cyanide solution
in the pad, with about 230kg cyanide dissolved in approximately 460t
water, which will be pumped back to the process without any
emission. The cyanide and water content will be refreshed
periodically, as the cyanide decays during the production process.

Now as for `million tons’ of heavy metals: the metals to be extracted
from the ore are the gold and silver, and the overall content does not
exceed 350 tons of metal over the life of the mine. As for other
metals, the ore naturally contains only trace concentrations. The
concentration of the traces of metals in the ore in heap leach will
not be more than it was in the rock naturally. Once again, the heap
leaching is a closed circuit and neither the gold or silver nor the
trace amounts of other metals will discharge into the
environment. After the mine closure the heap leach will be rinsed for
12 months, cleaned from cyanide, drained down, covered with clay and

As for the snowmelt and rainfalls, again there will be zero discharge
of process waters into the Rivers Arpa and Vorotan or other natural
environment. The Surface Water Management Plan is summarized in
Section 5.2.5 of the EIA and Appendix 16. The third pond out of those
mentioned will be empty and will have 170 000m3 capacity. It is
designed to collect storm event waters. All surface waters related to
the production process will be collected by the drainage system and
pumped back to the production process, as it is done in hundreds of
modern mines in the world. Additional drainage will be built
underneath the pad to collect snowmelt waters.

4. `Acquiring the lands for the heap leach facility and other
infrastructures you will destroy the orchards and fields there. You
are requested to make clear is it possible to use or sell to you as
food the crops from the orchards and gardens several dozen meters far
from that area.’

The majority of the orchards in Gndevaz are outside the land areas to
be acquired by the Company. The areas to be acquired for locating the
infrastructure will be demarcated and separated from the community
lands. As already mentioned, the heap leach facility does not have
process discharge and the materials used in the pad will not have any
contact with the community lands.

However, despite all the safety measures in the design, it is natural
that some of the inhabitants may have concerns about the potential
impact on the orchards. Taking into consideration the potential of
such concerns, the Company has undertaken an additional commitment to
carry out monitoring of the produce from adjacent orchards, and to
inform all stakeholders of the results.

The studies predict there will be no damage to the orchards adjacent
to the HLF. Nevertheless, if it turns out that there has been any
impact, inlcuding economic loss due to the activities of the Company,
then the Company will be committed to compensate these losses.

Locally produced food will be an important source of supplies for the

5. `You state that in the heap leach pad the pH of sodium cyanide
should be 11 and more in order to change the acid to base, and there
will be no hydrogen cyanide emission, a small quantity of which is
killing. You are requested to explain how are you going to fulfill it
in 134 ha area with 4 Mt solution under -30 to +300C temperature, in
rain/snow, or what equipment will be installed on 134 ha area that 600
kg will be emitted when 20 tons of cyanide vapours pass through that
device and 300 kg from 10t of hydrochloric acid. In case of fulfilling
all this, whether the 4 Mt alkaline solution and 600 kg cyanadie, 300
kg hydrochlorid acid are not hazardous for the local residents and the
ecology of the area.

To wrap-up the discussion of cyanide and to dispel the doubts on the
=80=9Cmillion tons’ used in Amulsar, we’d like to say that IN TOTAL
only 1.1 million tons of sodium cyanide annually is produced all over
the world, with only 6% of this used in the mining industry
worldwide. The remaining 94% is used in production of metallic
(galvanical) materials, chemical fertilizers used in agriculture,
paints, plastic, pharmaceutics, cosmetics and other production.

There is cyanide in nature as well. For example, the kernel of one
bitter almond may contain 6.2 mg cyanic acid. The kernels of apricot,
apple, peach and more than 1,000 species of plants contain cyanide
(according to the website of the International Cyanide Management

As already mentioned, there will not be `million tons’ of
solution. The very dilute solution (500 mg cyanide in a liter of
water, which is 0.05% cyanide) is circulating; there will be about
460t of solution in circulation at any given time. The statement on
the hydrogen cyanide emissions is also a result of misunderstanding.
The heap leach will not be generating any emissions of hydrogen
cyanide. There is a small risk of hydrogen cyanide emission during the
preparation of the reagents, which takes place in an enclosed facility
within the process plant. As mentioned in Section 5.1 of the EIA, any
possible emissions would be collected by the ultimate air ventilation
system, and filtered in scrubbers. The circulating system in the
scrubbers is formed by a diluted solution of sodium hydroxide, which
absorbs vapours of cyanic acid and hydrochloric acid and neutralizes
them. The effectiveness of the scrubbers is 97%.

Of course, as in the case of other chemical materials used in various
industrial sectors, special safety measures are required for using the

The Company has committed to obtaining, transportation, storage and
use of cyanide in compliance with the requirements of the
International Cyanide Management Code.

In accordance with the above Code and the Company’s preliminary
Cyanide Management Plan, the staff working with cyanide in future will
receive rigorous training to ensure safe storage and use of cyanide.

As for the pH, the internationally accepted way to ensure high pH is
to add lime to keep the pH at level of 10.5 and to prevent generation
of the hydrogen cyanide (gas).

As a further precaution, hydrogen cyanide gas detectors will be
located at the cyanide mixing tanks and within the surrounding areas
to identify even small amounts of emissions.

We have grouped the below-mentioned questions as the presented
statements are not always followed by a relevant question.

The letter states the fact that the samples analysed by Geoteam
contain other metals, besides gold and silver.

`(bismuth, cadmium, cobalt, chromium, copper, ferrum, gallium,
molybdenum, nickel, lead, antimony, scandium, titanium, uranium,
strontium, vanadium, zinc and wolfram) and toxic elements (arsenic,
beryllium, thallium, selenium, mercury and cadmium), all of which are
very toxic for human organisms’.

It is worth reminding that the mining operations at Amulsar have not
been launched yet and current activities will neither increase nor
decrease the metals concentrations in ore or soil within the project

Our studies show that the ore, water and soil within the surrounding
area contain certain metals. In the analysed soil samples from the
project area, concentrations of arsenic, lead, cobalt, copper, nickel
and antimony are regularly found to be higher than Armenia’s Maximum
Allowable Concentrations. It indicates that the concentrations of
these metals are `naturally’ elevated in the area, as a result of the
characteristics of the underlying geological strata from which the
soils are derived.

In addition, the sampling of waters has revealed elevated
concentrations of the above-mentioned metals in the Vorotan, Arpa and
Darb rivers. The springs and tributaries within the area also exhibit
low pH, that is they tend to be acidic. Groundwater originating from
beneath Amulsar is often similarly elevated in lead, nickel, copper
and iron. Again, these `naturally’ elevated metal concentrations
reflect the underlying lithology. The concentrations of the metals are
not expected to increase due to the mining.

`In the open pit area of 113.9 ha annually 12088.2 tons of explosives
will be used: each well will be charged with 239.6 kg of explosives,
50452 explosions will be carried out, dust emission accounts for
761.56 tons per year and dust will be spread in distance of 100-1000m,
noise level will be almost inaudible in adjacent communities. If the
person, who made these calculations, had been to Amulsar, winds would
have blown him off for 100 meters… Emissions in case of mine
development will be as follows. Inorganic dust – 1185.8 t/y, Nitrogen
dioxide – 1365.86 t/y, Carbon monoxide – 1107,75 t/y, Hydrocarbons –
222.4 t/y, Hard particles – 113.92 t/y, Sulfur dioxide – 106.35
t/y. We would like you to clarify the ecological impact in the area
and Vorotan-Arpa Tunnel.’

The calculations have been made by international and local specialists
who have been visiting Amulsar and making wind measurements, during
different seasons, within 6 consecutive years and comparing them with
Armenian Hydrometeorological Service data. A dust settlement model has
been developed as part of the environmental studies. According to this
model, the dust generated by blasting will mostly settle within a 100
meters’ radius and the small particles within a 1000 meters’ radius of
the open pit. Gorayk, which is the closest community to the open pit,
is located at a distance of 4 km.

Amulsar is not the most challenging deposit in terms of climate. There
are a lot of other projects in the world that are being operated in
much more challenging climatic conditions, including those located in
close vicinity of cities. For example, the Swedish Kiruna deposit that
is just adjacent to the city.

The modern blasting methods make it possible to significantly reduce

The composition of the dust was estimated from chemical analysis of
more than 20,000 samples of ore rock and more than 50,000 samples of
barren rock, and modelling was then undertaken to estimate the
resulting concentrations of the elements in the soil (due to dust
settlement) at the end of mine operations.

The element concentrations were then compared with both ecological and
human health screening criteria and were concluded not to present a
risk to either cattle grazing on the soils or to humans drinking milk
or eating beef from the cattle.

With respect to the impact of blasting on the Vorotan-Arpa tunnel, a
preliminary assessment has indicated that there is no risk. The
tunnel is 3 km horizontally and 1km vertically removed from the open
pits where blasting will take place, and is in a different geological

`Barren Rock Storage Facility is located in the area of 140 ha in a
distance of 5 km from the open pit and 7 km from Kechout reservoir,
which is located in the drainage basin of Kechout and Spandaryan
reservoirs. Annually around 46.7 million tons of ore and 10 million
tons ore will be transported here, which will be crushed with three
crushers located in a distance of 4.5 km, and then transported via
four overland conveyors, on a 1200mm wide belt, for 7.2 km up to track
stucking spot adding thousands tons of sodium hydroxide. Afterwards 3
trucks of BelAz-7513 make will transport them to the heap leach
facility located in a distance of 1 km. If we spread the crushed ore
in the area of 134 ha, we will get a layer of 8 meters high…’

To clarify, barren rock is not crushed; it is taken directly from the
open pit to the Barren Rock Storage Facility. It is the ore that is
crushed. The conveyor will be covered to minimize the dust
emission. Lime will be added to the ore before placement on HLF to
neutralize the acidity.

`….where you mention that dust emission of one ton of ore will make
up only 1.5 grams after passing the filters of three crushers, a
technology any pharmaceutical plant will be jealous of.’

The mentioned figures are a reality for many modern mining
operations. And this is how it is done: the primary crusher building,
secondary/tertiary crusher building, and screening building are all
enclosed structures, and each building will be fitted with a separate
dust collection system. Dust hoods will be placed over the conveyor
transfer points and crusher feed points within the crushing and
screening buildings. Thus, emissions will be very low.

Finally, about the economic benefits, Jermuk, inconsistence of the
future mining and agriculture, as well as the developments, following
the mine-closure in 13 years.

Briefly, on figures. The Project is the largest private investment
project in Armenia at the moment. According to preliminary estimates,
the Project will contribute an estimated USD 488 million to the budget
of the RA during its operational life, in the form of taxes and
royalties. Another USD 156 million will be paid as taxes due to
operation of other associated small and medium business entities. The
wage fund will make an estimated USD 230 million. The annual average
effect on the overall GDP of Armenia is calculated to make some USD
120 million. This is a good opportunity for an economic effect, which
is obvious even for a non-economist. It will create many investment
opportunities for community development, agriculture, tourism and
other sectors both in Jermuk and surrounding communities. The
efficiency of the funds application, the strategic investments and the
management will depend on the joint efforts to be taken by all the
parties, namely the communities, State authorities, civil society and,
to a certain extent, the company. On the effective management of the
investments within the 13 years will depend the economic

As to the compatibility of agriculture and mining, this will be
possible if correct management is provided. There are many examples of
countries that have both large agriculture and mining sectors – the
US, Australia, Brazil, Canada, Argentina and Spain among them.

The Amulsar mine closure process is planned to meet all the
international standards. It is worth mentioning that around USD 10
million is stipulated for the mine closure, including environmental,
social and land and water management plans.

And lastly, we would like to remind that all the above-mentioned
figures, percents and industrial processes descriptions represent a
well-tested and widely used technology.

The lack of trust in mining is easy to understand and the concerns and
anxiety are fully legitimate and appropriate considering the previous
experience of Armenia.

However, there are hundreds of operating mines in the world now and
many are modern and well-managed operations. The mining sector, just
like the other industries, has reported a fast technological growth
over the last decades. Some of the deposits in developed and
developing countries apply the above-mentioned practices and
environmentally sound management and provide economic benefits for the
country. We believe that it will be possible to achieve the same in
Armenia as well. However, we understand the concerns and are ready to
continue the dialogue and arrange meetings with international experts
as requested by the authors of the letter.

With best regards,


Copyright © All rights reserved.

From: A. Papazian

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