Name: Kapan mine.

Location: The mine is located in Kapan province, Armenia.

Controlling Company: Polymetal International.

Brief Description: The mine comprises a fully mechanised underground mine, with a current capacity of about 400 000 t/y; the Lichkvaz deposit; a conventional 750 000 t/y flotation concentrator and various infrastructure facilities. The operation produces gold, copper, silver and zinc concentrates sold to international markets and is expected to contribute more than 100 000 oz/y of gold equivalent once it has ramped up to full production.

The operation has an expected mine life to 2023.

Brief History: The first artisanal mining activities in the Kapan area date back to the mid-1800s. Industrial-scale exploitation at the Shahumyan deposit began only in 1923. About 230 000 t of ore was mined from the deposit by 1953, when mining was redirected towards the neighbouring Centralni deposit, transforming the Shahumyan deposit into an exploration area.

As a result of a large and focused exploration programme, the first GKZ mineral resource estimate was prepared for the Shahumyan deposit in 1976. Development of the deposit ceased in about 1990 owing to the collapse of the Soviet Union, but resumed in 1994. By 2003, about 2.7-million tonnes of gold ore was mined underground. In 2006, the asset was acquired by Dundee Precious Metals and a year later the company was awarded the Kapan exploration licence.

Polymetal International acquired the Kapan mine in 2016, making it the company’s first operating asset in Armenia.

Products: Gold, copper, silver and zinc concentrates.

Geology/Mineralisation: The Kapan project is located within the relatively underexplored Lesser Caucasus, part of the extensive Tethyan orogenic belt that can be traced from central Europe, across parts of the Middle East and South Asia. The mineralisation of the deposit is characterised by narrow, steeply dipping and east–west striking polymetallic vein sets (copper/zinc/lead/gold/silver) that are surrounded by a wide zone of argillic alteration and disseminated mineralisation from 10 m to 25 m wide. Mineralisation is primarily semimassive to massive sphalerite, pyrite, chalcopyrite, galena and bornite and occasionally, found with the latter mineral assemblage of tennantite, tetrahedrite, enargite, chalcocite, covellite, lead, gold, silver, bismuth tellurides and native gold and silver.

The Lichkvaz gold deposit is a part of the Tethyan belt and is tied to the Debaklinsky fault zone, which has submeridional stretch. The gold sulphide mineralisation is localised in the tectonic structures of the north-eastern strike, which extends for about 1 km. The mineralised bodies within the mineralised zones do not have sharp boundaries and are delineated by sampling. The mineralisation-bearing zone is traced for 950 m along strike and is not closed in either direction. The vertical scale of the mineralisation is more than 600 m and is open at depth. true thickness of the orebodies varies from 1 m to 10 m, with an average of 4 m, and the maximum depth is about 400 m from the surface. The material composition of the ore is a characteristic of disseminated and vein-disseminated deposits with gold/copper/polymetallic mineralisation.

Reserves: Total proven and probable reserves as at January 1, 2018, were estimated at 5.1-million tonnes with a gold equivalent grade of 4.2 g/t.

Resources: Total mineral resources as at January 1, 2018, were estimated at ten-million tonnes with a gold equivalent grade of 5.9 g/t.

Mining Method: Underground, sublevel open stoping.

Major Infrastructure and Equipment: Kapan is a fully mechanised mine. Broken material is loaded onto load, haul, dump vehicles and transported to the surface for further processing.

Following two-stage crushing and grinding ore is processed through a 750 000 t/y conventional flotation plant that produces copper/pyrite and zinc concentrates, both containing gold and silver material. Produced concentrates are bagged and shipped off to third-party offtakers.

Prospects: The underground mine is currently undergoing several improvement measures aimed at debottlenecking the mine to increase its capacity.

Contact Details:
Polymetal International
Tel +7 812 334 3666
Fax +7 812 753 6376
Email ir@polymetalinternational.com
Website https://www.polymetalinternational.com