Vallex Group launches mining at Teghout copper-molybdenum deposit

On December 20, Armenian President Serzh
Sargsyan visited the Teghout copper- molybdenum deposit. The President attended
the grand ceremony dedicated to completion of construction of an ore mining and
dressing plant and the launch of the industrial process. In addition, the
President familiarized himself with the results of the overhaul of the
M-6-Teghout highway, which is 3.7 km long.   

The first phase of the Teghout project implies
extraction and processing of 7 mln tons of ore per annum. At average rates,
within the next 10 years the annual output will be about 64 thsd tons of copper
concentrate with up to 31% copper content and about 760 tons of molybdenum
concentrate with up to 50% molybdenum content.   

With nearly $350 mln invested in the first phase of
the Teghout deposit development, the copper and molybdenum concentrates
produced by Teghout cjsc will annually amount to nearly 190 mln USD (7 thsd USD
per ton). 

Valeri Mejlumyan, Chairman of Vallex Group, told the
media that the copper and molybdenum concentrates will be exported mostly to
Europe.  He emphasized that advanced
technologies have been introduced in the Teghout project and infrastructure
reforms have been conducted.

For his part, Robert Derdzyan, Deputy General Director
of Geology and Mining of Teghout cjsc, said that some 300 thsd tons of ore have
already been extracted and stored at Teghout. In 2015, the company is planning
to extract and process 7 mln tons of ore, in 2016 the given index is expected
to be 7.5 mln tons, and in 2017- 9 mln tons. In 4-5 years the output is
expected to total 12-14 mln tons.

As regards the environmental programs, the company
will launch a forestation project, which implies planting 714 hectares of
forests instead of the 375 hectares to be cut for the deposit development.  Teghout cjsc also gives high priority to
conservation of the cultural and historical monuments in the area of Teghout
deposit.   

Under an agreement signed, the Institute of
Archaeology and Ethnography of Armenian National Academy of Sciences is
conducting excavation and other explorations in the specified area and controls
the events of assessment and conservation of the monuments and other articles
of cultural and historical value, which have been discovered in the course of
land operations.   

Several ancient monuments particularly dating back to
the early Bronze Age have been discovered during the expedition in Teghout. The
expedition also found a medieval smeltery, which demonstrates that the mine was
used as early as hundreds of years ago.    

To note, Teghout cjsc was founded on 22 May 2006 by
Vallex Group.  Teghout Investments
Limited (Cyprus) is the sole owner of Teghout cjsc.  100% of Teghout Investments Limited's voting shares, in turn,
belong to Armenian Copper Programme cjsc owned by Valeri Mejlumyan.  By its reserves, the Teghout deposit is the
second largest deposit in the republic after the Kajaran copper-molybdenum deposit
in Syunik Province. In 1991, the approved reserves totaled 450 mln tons of ore,
including 1.6 mln tons of copper (0.355% content) and 99 thsd tons of
molybdenum (0.022% content).

The Government of Armenia approved the project on
development of the Teghout copper-molybdenum deposit in November 2007.