John Sellar, Director of Deno Gold Mining Company, responds to questions posed by Hetq Online

- From 2005 till today, how many times has Armenia’s Ministry of Environmental protection conducted inspections of Deno Gold Mining?

- We have one annual inspection of all aspects including geological reserves calculations; the local inspectors do regular monthly inspections which include water sampling of our tailings dam. We have many informal meetings with the inspector. All environmental incidents are reported to the inspector and these incidents can result in additional inspections. 

What infractions were found, if any, as a result of each inspection ? What were the penalty amounts levied in each instance?

- There has been one non-compliance issue registered in official visits since 2005.  That was in December 2005 and the penalty was 10,300,000 AMD, there has also been one incident where the inspector visited site and 2,100,000 AMD was the penalty received by DGMC in June 2007. We will also be developing an internal system to measure compliance against international good practice as we develop and improve the operation over the coming years

What environmental programs are implemented in the course of your company’s operations?

- DGMC is committed to environmental best practice and has initiated a number of projects which have environmental benefits. 
Internal    

• water management onsite.
• Concerted effort to reduce natural resource usage, for example changing all heaters to more energy efficient ones.
• In 2006, some 800 fruit trees were gifted to the community of Khalaj.
• Machinery and people let to Marzpeteryan for activities which include waste dump clean up and run off water channel clean up.
• Large baseline study underway, the project is aiming to assess all environmental effects the mine has on the environment such as dust emissions, water discharges, etc.
• Commenced implementation of formal EMS.
• Developed long term plan for environmental improvements and rehabilitation of previous and historic sites.
• Improved tailings management.

What environmental programs are you planning to implement in the next two years?

- The company is upgrading all facilities currently and there have been improved technologies used in Process Plant. The environmental benefits from this upgrade include better management of process water, better filtration of dust. Improved vehicle maintenance decreases fumes to atmosphere. 

The Artsvanik tailings dam is a Russian designed construction. There were few environmental considerations when building. The new tailings dam situated over an old Soviet constructed tailings dam has improved environmental design. Decanted water will be returned to the process plant and reused, reducing the discharge of treated water to rivers. 

Deno Gold has allocated a portion of the community and sustainable development budget to environmental projects. This money will be spent on projects that benefit local people and the environment.

Continued comprehensive environmental monitoring program after baseline study is completed. Our long-term aim is to implement best practice water management, best practice waste management, improved rehabilitation, and so on.  We also intend to join forces with responsible Armenian and International NGO’s to contribute to community based environmental improvement projects.

The Artsvanik Tailings Dam utilized by your company was operating in an ‘emergency state of disrepair’ and in 2005 the Environmental Ministry notified you to have it rebuilt. What state is it in today?

- The Artsvanik Tailings Dam has not been operated in an ‘emergency situtation’. There were recommendations after the Design institute inspections. All the recommendations were completed. The TMF has been sucessfully running and is in the last few months of operation before we begin to use the new TMF. 

Where does the water from the tailings dam flow and how safe is it from an environmental perspective?

- Water is decanted from the surface of the tailings dam and is piped to the Volchi River. The water is analysed monthly by Deno Gold and independently monitored by the Environmental Inspector. The water generally does not exceed the maximum allowable concentrations (MAC) set for Artsvanik TMF discharge by the RA Environmental Ministry. Any circumstance where discharge exceeds MAC the Environmental Inspectors are informed. 

You had planned to construct a new tailings dam in Geghanush. Has work there been completed?

- Work on the new tailings facility is very close to completion. Commission is planned for November.Since late 2006 international dam consultants have been engaged to assist in review of the design and suggesting improvements.  Over the last several months much of the construction effort has been focussed on improvements designed to bring the new TMF more into line with internationally acepted norms.

What is the capacity of the new tailings facility and for how long can it be operated?

- We expect to use the new tailings dam for several years, depnding on the production levels of the mine. The capacity is 11.33 million cubic metres. However we also believe that this dam may be closed early (perhaps in several years rather than 20) if a better long term alternative can be found.

What chemical products are used during mining operations and what measures are taken to safeguard against their harmful properties?

- We have chemical laboratories onsite which constantly analyse samples. These labaratories are managed according to RA law. Reagents used in the ore concentration process are mixed and used onsite. We will be implementing European standards for the tracking and management of our chemical inventory and ensuring that any hazards are well understood and managed.

Where do you store waste ore and other waste materials and for how long?

- The ore comming out from the mine is stored next to crushers at the production area. The capacity of the area is about 20,000 tonnes. The waste ore is storing at the mine site area and in waste ore storing area 2ha provided by Kapan city council for that purpose. As new mine plans are developed new waste rock planning may be required.

What are the grades of gold and silver to be found in the deposits your company mines?

- DGMC is operating two mine deposits Centralny copper mine and Shahumyan polymetallic. Copper grade in Centralny mine varies from 0.9-4%. In Shahumyan mine copper  is 0.2-5%, gold 1-8 g/t.  However we must point out that mining is difficult and the grades produced in our mining operation often fall short of what is theoretically possible in spite of our best efforts.  We are currently working on introducing systems proved internationally to address this issue.  It should also be recognised that not all of the grade recovered from the mining operation can be turned into metal production as plant and recovery efficiency can vary.  Recovery can vary between 50% and 90% depending on the metal and the geochemistry and in spite of the efforts of the mill staff.

What is the process involved in the concentration of gold?

- Small quantities of gold are concentrated by simple flotation with the rest of our polymetal concentrates.  The gold is then sent away as a part of the flotation concentrate for smelting and gold metal production elsewhere.
 
What is the status of the firm’s safety management program ? How many tragic accidents have occured during the past two years?

Safety management in the company is progressing. There is a huge difference in safety aspect in comparison with the fact of two years prior and although we meet all RA safety requirements we feel that there is also much to do to ensure that the mine meets our goal for international best practice. The number of accidents registered in the company during the last two years are the following - 2006 - 2 fatalities and 6 incidents, 2007 - 2 incidents.  We have improved the safety systems on site and have employed additional safety specialists and expect to see further improvements in the next year.
    
On August 9th of this year a fire broke out at the production facility. What caused the fire and what damages resulted from it?

After re-agent preparation work some amount of re-agent was accidently left under the sun and reacted from the heat. The amount of re-agent was minor and it was removed from re-agent preparation area to waste bins where it started to react again and made smoke which was stopped in 5 minutes.  

What is the number of total plant personnel and how many are miners?

Totally there are 1428 employees out of which there are about 600 miners.

What is the average salary of the miners?

- The average monthly salary of the miners is around 150000 AMD per miner. In fact the average salary per miner for the staff working underground is around 250000 AMD.

What charitable and othercommunity-wide assistance programs have you implemented in the city of Kapan?

- Community sponsorship projects are running not only for Kapan city but also for other rural communities.

Here is the list of the projects completed so far: