In the 2008 yearly financial report issued by the Estonian GILD Arbitrage Risk Capital Fund, the company says that it has invested 20 million Euros in Armenia. According to the report, the company has invested in Armenia’s mining sector via Melorama Holding Ltd., registered in Cyprus.

This firm has registered several subsidiary holdings in Armenia that have also acquired mines and performed mining studies. The report claims that it has spent 20 million Euros for such operations.

The question now before us is which specific mines has this off-shore company purchased? We have yet been unable to answer this question. In response to our inquiry, the government has declared that, “Melorama Holding Ltd. does not appear in the list of those companies duly registered as operating in the mining sector of the RoA.” This response can only mean that either the Armenian government is unaware of the transactions taking place in the mining sector or that Melorama Holding Ltd., for whatever reason, is conducting transactions through a third party and that its name does not directly appear in the list of shareholders.

Through the assistance of our colleague with the Estonian newspaper “Äripäev”, the shareholders of Melorama Holding Ltd. have been uncovered:

1. 25% of the company belongs to “AS Gild Fund Management” registered in Estonia.
2. 60% belongs to “Melorama Investments Ltd¦. This company is registered in the Marshall Islands; another off-shore zone.
3. 15% belongs to Davit Manukyan, whose address is registered at Yerevan, Aghbyur Serob Street 11/3, Apt. 2

No one lives at this address. Numerous phone calls went unanswered. The apartment belongs to RoA Presidential Advisor Andranik Manukyanor his son, Davit Manukyan.

We tried to get Andranik Manukyan’s comments on the matter but to no avail. His assistant repeated that he was away on a business trip and unavailable. We had informed them previously as to the nature of our inquiry. The assistant gave us the same answer even when we called a second time; this despite the fact that we had spotted Andranik Manukyan at an event in downtown Yerevan that very same day. Evidently the presidential advisor seeks to avoid comment on the matter. Mr. Manukyan had dealings with Armenia’s mines back when he was a minister in the government. It was through his meditation that the Hankavan gold mine was sold to the Russian-based company, GeoProMining. According to our information, the cost of the sale was U.S. $30 million.

An Estonian journalist severely questions whether such investments have actually been made. It cannot be ruled out but it is more likely that in 2008 a few Armenian gold mines were sold to this off-shore company.

This would signify that the RoA government has seen not one penny as a result of this transaction. It can also be assumed that the transaction took place outside of Armenia and that none of the proceeds reverted to Armenia.

Which mines have been purchased and who owns the exploratory and operational licenses for them? Who were those government officials that gave the go-ahead for the sale? One thing is crystal clear however. Not just anyone could have obtained the exploratory and operational licenses for the mines and then sold them without paying any tax to the government.

The article appearing in the Estonian newspaper “Äripäev” cited the quote of the Armenian government published in “Hetq” that Melorama Holding Ltd. Isn’t registered in any lists of mining sector shareholders.

Subsequently, the newspaper presented the following explanation given by Tõnno Vähk, Director of GILD Arbitrage Risk Capital Fund:

We can’t comment from whom and on what conditions we bought those assets (licenses) in Armenia, because there are strict confidentiality agreements. Also, this could significantly damage ongoing negotiations with potential investors. We have no need to share details of our investments with public; this information is available for investors. This kind of information (I asked the names of companies GILD has in Armenia) is not important for public and publishing it could only harm investors.

Melorama is a big group (altogether about 30 firms) and holding company (Melorama Holding Ltd) does not directly own any Armenian companies. According to the law only Armenian companies can own licenses. This explains why there are no direct investments from Cyprus to Armenian mining sphere.

We have nothing to do with Armenian former environment minister (Vardan Ayvazyan), we invested, when he was vacated from his position.

Facts and information you got from Armenian government and journalist are probably correct, but irrelevant and it has absolutely no meaning from our position.

According to the RoA National Statistics Service, Cypriot direct investment in Armenia during 2008 amounted to $10 million. However, this amount has no connection to the investments made in the mining sector. Before the mining sector was passed to the jurisdiction of the Ministry of Energy end Natural Resourcez , Environment Minister Aram Harutyunyan allocated several score of exploratory licenses. Most of the mines, essentially gold mines, were granted to the firm “Luliar Ltd.”

This firm belongs to Silva Hambardzumyan who also owns “G. Arshakyan Ltd”, another company that was granted exploratory licenses for a number of other gold and copper mines. Furthermore, two months ago Silva Hambardzumyan also purchased the company “Sipan 1”, which owns the operating licenses for the Meghri-Lijkvaz-Tey and Terterasar gold mines. The question arises – is there any connection between the Estonian investments and the mines owned by Sylva Hambardzumyan?

To be continued