During early July, GeoProMining (GPM) held a groundbreaking ceremony for its new gold extraction upgrade at its Ararat gold extraction plant, located near Yerevan, Armenia. The President of the Republic of Armenia, Serzh Sargsyan, attended the event. The facility is using the Albion gold ore processing technology, which is part of a major capital expenditure program by GPM to upgrade its Armenian assets.

Over the course of the next three years, GPM Gold will invest approximately $100 million to improve efficiency and to maintain high environmental standards. To date, GPM has spent about $260 million to acquire and modernize its Armenian assets.

The Albion technology was developed in Australia by Xstrata Technology with the support of Core Process Engineering. GPM expects the process to significantly increase gold recovery from sulphide-bearing ore produced at the Zod mine. The goal is to increase gold production to an estimated 150,000 oz/y.

GPM has hired several engineering firms to assist with its plans to grow GPM Gold. The modernization program, according to the company, adheres to the highest international environmental standards, which has been confirmed by leading South African experts in environmental impact assessment including Fraser Alexander, Epoch and Digby Wells Environment. GPM has also hired Snowden to develop an efficient mining plan for the Zod mine. All necessary licenses and permits from the Armenian authorities are currently being processed in compliance with the local regulations. GPM plans to complete this investment project by 2013.

At the groundbreaking ceremony, GPM CEO Roman Khudoley said: "It is an honor to begin construction of this new upgrade at the Ararat gold extraction plant in the presence of President Sargsyan and other senior governmental officials. Our investments in increasing the efficiency and capacity of our assets will support the socio-economic development of the regions.

"Our team has a wealth of experience in successfully implementing complex mining industry projects," Khudoley said. "We are confident their professionalism and experience, combined with the leading international experts we have brought in, will help us to successfully complete the project on time and on budget."

Armenian President Serzh Sargsyan attended the groundbreaking ceremony.

Originally founded as Stanton Equities Corp. in 2001, the company acquired several mining assets in Russia, Georgia and Armenia. In 2007, the company acquired Sterlite Gold, which owned the idle Ararat and Zod assets. Later that year, the company was renamed GeoProMining and production at the Zod gold mine began again in 2008. The Zod mine extracts ore from one of the largest gold deposits in the Caucasus region. The ore is transported by rail to the Ararat facility where it is milled, processed by CIL and smelted into gold dore bars.

The planned investments in the Ararat plant are expected to enable GPM Gold to process higher volumes of ore from the Zod mine without the need to construct any additional processing facilities. Based on thorough testing of the ore, GPM decided to implement a solution it believes will significantly increase the gold recovery rate. The company is also investing into minimizing its impact on the environment. The Albion technology was first successfully implemented in the Dominican Republic, and the new facility in Armenia will be the second to adopt this technology.