Real estate prices in the tiny Vayots Dzor village of Saravan are on the rise.
A house that went for $1,500-$2,000 just a few years ago now goes for $10,000. So what’s behind the sudden “gold rush” in Saravan? That’s right; it’s the yellow metal itself.
You see, much of the village’s pastures abut Mt. Amoulsar and that’s where the gold ore is supposed to be. The Saravan village municipality has already handed over 1,363 hectares of land to the mining company Geoteam for prospecting and 136 hectares for mining operations.
In return, Geoteam pays the village an annual sum of 30 million AMD for leasing and other payments.
Saravan Mayor Simon Babayan told me that this new influx of cash has raised the spirits of local residents and authorities alike. They all see a rosy future on the horizon.
The mining company has installed a 7 kilometre gas pipeline through the mountains to the village. The village will have a new kindergarten this September and the upper fields will be irrigated for the first time. The International Fund for Agricultural Development will be setting up a 15 hectare experimental fruit-growing complex in the village.
Mayor Babayan points to all these projects as a harbinger of better days for Saravan and boasts that people have stopped leaving the village.
Saravan was populated by Azeri Turks before the war. After they left, Armenian refuges from Azerbaijan and young families from the local area moved in. Today, Saravan boasts a population of 346.
Only the peak of Mt. Amoulsar is visible from Saravan. Most of the lands leased to Geoteam lie 10-30 kilometres from the village and are hardly used for animal grazing. There just aren’t enough animals.
Geoteam CJSC is a 95% owned subsidiary of Lydian International Limited. Exploration activities undertaken in 2008 identified 16.4 t of gold reserves. In 2009 the company obtained a special Mining License from RA Ministry of Energy and Natural Resources, and in December 2009, after meeting all legal requirements, signed a Mining License Agreement. The company states that since incorporation in 2005, it has invested more than USD 15 million into its activities in Armenia.
Lydian International Limited, based in the British Channel Islands, is a publically quoted company listed on the Toronto (Canada) Stock Exchange (TSX:LYD). Lydian is a mineral exploration and development company with expertise and a proven track record in discovering and developing new gold deposits. Lydian’s largest shareholders are the International Finance Corporation, (part of the World Bank Group), the European Bank for Reconstruction and Development and Newmont Mining Corporation (the World’s second largest gold miner).
Amoulsar is a brand new gold discovery, the first for over 20 years in Armenia. It is located along a high ridge top between the Vayots Dzor and Syunik provinces.
Since discovery of the Amoulsar gold deposit in 2006, Geoteam CJSC has completed surface analysis of gold content in exposed rock outcrops, analysed the soil for trace indications of gold and conducted geophysical surveys to project the possible subsurface shape and extent of the gold deposit at Amoulsar. Since 2007 the Company has conducted four summer seasons of exploration drilling on the project. Drill holes have tested the gold content along the ridge top down to depths of up to 250 meters below the surface. In total 395 drill holes and 46000 metres of drilling have been completed by Geoteam by the end of 2010.
On its website, Geoteam says it will use an open pit method for extracting the ore. This ore will then be transported from the open pit area to a crusher which will reduce the size of the rocks. These smaller rocks will be transported to a heap leach pad and the gold will be extracted over a period of time.
The company claims that the heap leaching method is used internationally on many projects and is a recognised form of gold extraction process. Geoteam adds that it is currently focused on identifying all risks and completing a full risk assessment and risk prevention measures for the whole of the Amoulsar project.
The company claims that dust from drilling will not impact the local villages and the resort town of Jermouk some 13 kilometres away. Geoteam says that 95% of the dust will come to rest at distance of 100 meters from the site and the remainder will not travel more than 1,000 meters. A sanitary protection zone around metal ore deposits has been set at 1000 m and the closest village to the deposit is over 5 kms away, the company states.
Environmental activists argue that the site is used as a migratory passage for many animals registered in the red Book of Endangered Species and is important in terms of overall biodiversity. It is the natural habitat of many unique species of flora as well.
This doesn’t seem to concern local residents. All they want is jobs.
Saravan Municipality specialist Razmik Manoukyan says that they have voiced all their concerns to the company and that Geoteam has scientifically proven that any environmental or health threats are unsubstantiated.
“They’ve even installed radon gas meters in all the houses. All levels are at normal range even though mining operations have begun,” says Manoukyan.
Rouzan Asatryan, another municipality specialist, adds that environmental activists from Yerevan don’t know the full story and boasts that the company has even set-up a tree nursery in Saravan. The tress will be planted as a protective belt around the mine to further limit any dust fallout on the villages below.
Zara Gevorgyan, is a young biochemist living in Saravan. She’s married with a young child. She works at Geoteam as an assistant environmental specialist. She takes samples of the local air, water and soil. Some of the samples are sent to a lab in Armenia for analysis and the rest to an overseas testing facility.
“All the results are within internationally accepted norms. All that talk of uranium and other stuff is bogus and just meant to create panic,” says Zara, adding that she’d be the first to sound the alarm if anything was found to be a health risk given that she has a small child.
She says that at recent public hearings in Jermouk, Armenian activists weren’t able to provide valid data that uranium indeed exists.
Local residents say all this doomsday talk is the work of Ashot Arsenyan, the owner of Jermouk Group. They say that MP Arsenyan saw that many of his workers were leaving his employee (at around monthly wages of 60,000 AMD) for higher paying jobs at Amoulsar (120,000 AMD).
Right now, there are 8 Saravan residents working at the mine according to Razmik Manoukyan. The total labor force at Amoulsar is around 130. Geoteam says it will train another 200-300 locals for jobs at the mine.
Based on the prospects of even more job openings, Saravan plans to allocate an additional 100 hectares to Geoteam. This translates into an additional budgetary inflow of 24-25 million AMD.
Mayor Babayan says if all this new revenue, some 60 million, is reinvested in Saravan the village will resemble the Armenian equivalent of Las Vegas within 5 years.
“It’s just a pity that I don’t have a photo of what the village looked like before all this development. It would have been great to compare the new with the old.”