Armenia has great potential for exploration and the discovery of new deposits, but government reforms are needed before metals and mining companies would be able to exploit the country's mineral wealth, the head of the investment projects directorate at Polymetal International Plc, Tamara Golovina, told S&P Global Market Intelligence during an interview at the Moscow MINEX conference Oct. 12.
"The potential for the discovery of new deposits is big, but current legislation does not allow for it," Golovina said.
She went on to say the government's position on developing the mining industry is uncertain and metals and mining companies need assurances. If the government does decide to push ahead with the development of the industry, then they have to reassess their priorities and reassess their resources.
"We first came to Armenia with the impression that there was an abundance of deposits and we would be able to bring them into operation and everything would be good," she said.
Russian gold miner Polymetal acquired a 100% stake in the Lichkvaz project in Armenia in 2015 and acquired the Kapan project in 2016.
Kapan is operational and produced 14,000 ounces of gold in the second quarter of this year, while Lichkvaz is still in the development stage.
Golovina stressed that in the wider context of the Caucasus region, Armenia was more open than its neighbor Georgia.
"Georgia put huge barriers in the way of the development of the mining sector. Even the smallest assets carry an enormous price," she said, explaining that only major mining companies can afford to buy into the Georgian mining industry.
In addition, she said Armenia could be a feasible option for other Russian mining companies, as it is part of the Eurasian Economic Union and there is already a relatively well-developed infrastructure in place.