Kapan mine was acquired by Polymetal International in 2016 and represents its first operating asset in Armenia. The asset comprises a fully mechanised underground mine with a current capacity of approximately 400 ktpa, a conventional 750 ktpa flotation concentrator and various infrastructure facilities. The mine produces gold-copper-silver and zinc concentrates sold to international markets. More than US$ 75 million has been invested in Kapan over the last 5 years.
The Kapan property is located in the south-eastern Armenia, 320 kilometres from the capital city of Yerevan. The area surrounding the operation hosts a number of other prospective deposits, including 100%-owned high-grade Lichkvaz gold deposit located approximately 70 km from Kapan.
Polymetal believes that the acquisition of Kapan is attractive as it provides the opportunity to:
- Enable synergies with Lichkvaz deposit by employing processing hub approach utilising excess capacity at the Kapan concentrator.
- Debottleneck underground mine and improve concentrator utilisation
- Streamline the cost structure leveraging Polymetal's experience in mechanised narrow-vein underground mining in the FSU
- Establish a strong operating platform to pursue further opportunities in Armenia
An improvement of the concentrator utilization is planned in 2 stages:
- 650 ktpa to be achieved by 2H 2017
- 900 ktpa to be achieved by 2H 2018 (including feed from Lichkvaz)
We are undertaking significant additional drilling in 2017 with the objective to produce a JORC-compliant ore reserve estimate and a combined Life of mine Plan for Kapan and Lichkvaz in Q3 2017.