On 11.06.2012 EcoLur recieved letter addressed to EcoLur President Inga Zarafyan from "Geoteam" CJSC numbered Հ/Ա– 2012/27 and signed by Company Director Hayk Aloyan.

 The letter particularly says, “LETTER OF DEMAND(about retracting the statements made public on 21 May 2012)  Hereby we would like to inform you that during the discussion in Aviatrans hotel on 21 May of this year you made manifestly untrue statements discrediting the business reputation of "GEOTEAM" CISC, in particular the following

(quoted):

"...So the company, "GEOTEAM" CJSC, received positive opinion on an EIA in 2009. We have studied both the EIA in question and the protocol of the public hearings which fail to present the risks; the risks are not presented. But since they have not exploited that small land plot, we are speaking about the Tigranes land plot, I would like to say that this is the style of the Company, that is to say they control a large area, but they submit EIAs for small land plots, but this time they tried to submit such an extended project. And there is a huge controversy regarding that project because if you visit the website of the Ministry you will see two projects there. One of them speaks about cyanide and very dangerous initiatives and the other doesn't. It is obvious that the one discussed during the public hearings is the one without any mention of cyanide. On the other hand, as it turned out, nothing is clear because "Lydian" declared that since they have already received a positive opinion about the cyanide from the Ministry, no public hearings had taken place, but the Minister said that there is no such positive opinion, and we never understood what had in fact happened. We realize that there is a game going on here the rules of which are more or less clear, but we do not know what is happening in the game..." end of quotation.

Thus, the expressions discrediting the business reputation of "GEOTEAM" CJSC are in particular the following:

"...I would like to say that this is the style of the Company, that is to say they control a large area, but they submit EIAs for small land plots..."

"…We realize that there is a game going on here the rules of which are more or less clear..."

The following information is manifestly untrue:

"...there is a huge controversy regarding that project..."

"...One of the project speaks about cyanide and very dangerous initiatives and the other doesn't. It is obvious that the one discussed during the public hearings is the one without any mention of cyanide. On the other hand, as it turned out, nothing is clear because "lydian" declared that since they have already received a positive opinion about the cyanide from the Ministry, no public hearings had taken place..."

The   abovementioned   statements   have   been videotaped, and the video titled "Jermuk will become a national park" has been posted on the  official website of "Ecolour" NGO. Furthermore, it is already available at "Youtube" where 197 people have viewed it as of the moment of preparing this letter.

Thus, we hereby demand that the abovementioned defamatory statements discrediting the business reputation of our company be publicly retracted in their entirety in the manner and within the timeframe prescribed by the provisions of Article 8 of the Law of the RA on Mass Media.

In addition, we also inform you that if Ecolour does not, in the manner and within the timeframe prescribed by the provisions of Article 8 of the Law of the RA on Mass Media, retract in its entirety, the abovementioned defamatory and manifestly untrue statements, then "GEOTEAM" CJSC will have no other recourse but to apply to the court with the aim of upholding and enforcing its legal rights and obtaining compensatory damages for harm suffered, in accordance with RA legislation.”

EcoLur reminds that in reply to the discussions on 21 May, Geoteam Company circulates via mass media an official press release, where the opinion expressed by EcoLur President Inga Zarafyan was commented point by point. The press release said the following expression: “We think that several comments by EcoLur are intentionally false and defamatory.”

On 25 May EcoLur displayed Geoteam’s response on its website  (http://www.ecolur.org/hy/news/mining/geoteam-company-accusing-ngos-of-bias/3861/) Thus, the requirement posed by Geoteam in its later letter on 11 June was already met, as in accordance with the policy EcoLur runs all the stakeholders, including Geoteam company, can express their own standpoint on webpages of EcoLur, http://www.ecolur.org. It should be noted that under Article 8 (5) of RA Law “On Mass Media” cited by the company, information disseminator may publish response with or without refutation. Thereby, with publishing the response EcoLur met the requirement of refutation before receiving the letter.

Geoteam publicly accuses EcoLur of defamation, which is qualified under Article 135 of Criminal Code of Armenia, as dissemination of deliberately false and defamatory information humiliating reputation and dignity or good name of another person.

Nevertheless, the expressed opinion doesn’t aim to discredit the company’s image, but aims to reveal Amoulsar project risks and standpoints of all stakeholders. This opinion doesn’t contain signs of defamation, is not discrediting and false information. It should be noted that this is already the third letter to EcoLur with a demand to refuse from the expressed opinion and threats to sue for damages.

EcoLur thinks that in this manner Geoteam Company seeks to exercise pressure on EcoLur and says discrediting statements and allegations addressed to us without any proof and grounds.

In our turn, we state that the expressed opinion has the following substantiation:

The first project on developing Tigranes section of Amoulsar mine, Geoteam Company submitted in 2009 and was issued positive opinion of environmental impact expert assessment from Nature Protection Ministry of Armenia. What about expanded project, in the course of discussion on Amoulsar project on 18 April 2012, First Deputy Minister Simon Papyan applied to Geoteam Company and its shareholder Lydian International: “Will you start mine development without approval of ore processing project (cyanide production)?” Lydian International chief Executive Tim Coughlin: “Under law, the first permit pertains to mine development and waste disposal. Meanwhile we should receive permit for mining disposal. In-detailed project costs US $ 6 million. Naturally we won’t make any investments unless we know all the permits are issued.” Minister Aram Harutyunyan: We gave our consent to conduct works in the territory of 24.6 ha, as this is tourism zone. There was an agreement not to submit expansion project. Why was the territory was enlarged 12 times? I’m asking the expert. Please explain, why ore output was increased twice? Why isn’t the whole cycle covered? We are involved in the process step by step, out of which we can’t get. Let them prepare the whole cycle, as ore processing may include the use of chemical substances, particularly cyanide. We have Spandaryan reservoir there, and I wouldn’t like to have any cyanide production in its surroundings at any cost...’

We have a question: how Nature Protection Ministry issued its conclusion on cyanide production, if Geoteam Company asserts in its official press release: (http://www.mediamax.am/am/news/business/5062/, http://www.ecolur.org/hy/news/mining/geoteam-company-accusing-ngos-of-bias/3861/): “The EIA on ore processing clearly lays down the use of liquid soda cyanide and heap leaching process for Amoulsar project.  The public hearings on this particular EIA was held on 28 November 2011 in Gorayk, about which an announcement was published in the “Azg” newspaper one month before. Besides newspaper announcement, information about hearings was published in monthly bulletin of the company and displayed on company website. The information about hearings and venue was approved in the same way in October 2011. The EIA was approved on 5 December 2011.”

For our part we would like to mention that on 28 November 2011 Geoteam Company administration held public hearings in Jermuk town (http://www.youtube.com/watch?v=0XlmgAGY-fg&feature=player_embedded) and the question who held public hearings on the same day in Gorayk is left open. EcoLur tried to find the answer to this question from Nature Protection Ministry and asked to provide the following information: whether hearings on cyanide production were held? We also asked the Ministry to provide them the minutes of public hearings and information whether cyanide production was submitted in separate EIA. The ministry reply says: visit www.mnp.am, and that’s it. The website of Nature Protection Ministry has three documents on Amoulsar. The first document “Expanded project on opencast development of Amoulsar gold mine” displayed on 07.03.2012 says nothing about cyanide production. The second document, “Amoulsar gold-bearing quartzite mine” displayed 20.04.2012 also says nothing on cyanide production. The third document, “Program on Planned gold extracting in Amoulsar surroundings through heap leaching” contains description of cyanide production. Nevertheless, neither any data nor information about public hearings have been provided. Besides, at the public hearings in Nature Protection Ministry on 18 April, Minister Aram Harutyunyan stated that conclusion on cyanide production hasn’t been issued yet.

It should be noted that the Ministry displays on its website all the announcements about upcoming public hearings and provides information how it’s possible to learn about the project for the participation in hearings. This is official procedure for environmental impact expert assessment, which wasn’t carried out for cyanide production.

On the other hand, on 12 March 2012 Lydian International Company circulated press release (http://www.lydianinternational.co.uk/press-releases/2012-03-12/lydian-receives-environmental-approval-for-processing-at-amulsar-using-heap-leach-technology) in foreign mass media (not in Armenian mass media), as part of the permitting process for the development of its Amulsar project, it received environmental impact assessment approval for the Company’s planned processing of gold-silver using cyanidation-leaching technology. On the same day, Geoteam Company was holding hearings on Amoulsar project in Saravan Village. The information was displayed on the ministry website together with the project where the part about cyanide production was missing.

The abovementioned gives reasons for the opinion that public has extremely contradicting information about the procedure of receiving permit for cyanide production and various versions of Amoulsar project submitted for public discussions. But it pertains to risks posing threat to environment, health and safety of people connected with mining industry:

- threat of polluting water resources with industrial wastes, such as Spandaryan and Kechout reservoirs, Vorotan and Arpa River drainage basins, and eventually Lake Sevan,

- threat of radiation risks, as there are uranum demonstrations 5 km far from Amoulsar,

- threat of loss or change in the composition of Jermuk mineral waters arising from explosions at open mine,

- risks connected with accumulation of millions tons of dumps and cyanic production,

- loss of 'Jermuk' brand as a center of resort zone, as its development is prescribed by government decision and where millions of investment have been made,

- loss of biodiversity, particularly red-listed species,

- risks for people health.

www.ecolur.org website pages display informational and video materials reflecting:

- public opinion and opinions of independent experts: Hrachya Avagyan, Dr. in Geomineralogical Sciences, Ruben Yadoyan, PhD in  Geominerological Sciences, Engineer-Hydrologist Qnarik Hovhannisyan, Eleonora Gabrielyan – President of Armenian Botanical Society, Dr. in Biological Sciences, one of the authors of Red Book of Armenia, WWF-Armenia Head Karen Manvelyan, PhD in Biological Sciences, WWF-Armenia Expert, field researcher Alexander Malkhasyan, Nazeli Vardanyan, Director of 'Armenian Forest' NGO, Lawyer, Geographer Levon Galstyan, Karine Maysuryan, Head of Experimental Laboratory on Studying Natural Medicinal Factors and Ecomedicine of Institute of   Balneology and Physical Medicine, PhD in Chemical Sciences, Greta Gabrielyan, Chairman of 'Environmental Academy' NGO, Silva Adamyan, Chairman of 'Center for Bird Lovers' NGO, Qnarik Grigoryan, Expert of 'Women for Health and Healthy Environment' NGO, representatives of public civic initiatives such as 'Jermuk Won't Become a Mine', 'Trchkan Supporters', 'Teghout Supporters', 'Heritage' political faction and ANC, heads and doctors of three medicinal-resort complexes in Jermuk, local administration of Jermuk, as well as materials expressing the viewpoint of Nature Protection Ministry of Armenia (Nature Protection Minister, First Deputy Minister Simon Papyan, official replies of the ministry to EcoLur enquiries signed by Ministry Staff Head Edgar Pirumyan, EIA, official minutes of public hearings,)

- viewpoint and comments of Lydian International chief Executive Tim Coughlin, Geoteam Company: Director Hayk Aloyan, Chief Environmentalist Armen Stepanyan, company experts drawing up the company EIA- engineer-hydrologist Valeri Prazyan, Vram Tevosyan, Karen Aghababyan, official press releases of the company addressed to public, including EcoLur,

- Viewpoint of main shareholders of Geoteam Company – EBRD and IFC, a member of WB.

Geoteam Company states that it follows international standards, policy of IFC and EBRD. In this regard we would like to say, that EBRD directors at the annual meeting in London 2012 once again declared about the principles of social and environmental responsibility in their projects, while in the dialogue with public they people in charge assured they intend to introduce the best European standards in mining sector. Instead of threats to public, which signals about risks and address their demands to Amoulsar project, we call for Geoteam Company to start practising dialogue. At the same time, we would like to apply to Lydian International Company, which owns 95% of Geoteam shares, as well as to international financial institutions, which are shareholders of Lydian International Company, to share responsibility for fulfilling principles of reducing environmental and social risks, as well as public participation in decision-making in important environmental matters.