Property Description and Location
The Kapan mining area is located in the south eastern corner of Armenia, 320 kilometres south of the capital city of Yerevan and forms part of the Tethyan tectonic belt. It is situated within the south eastern Syunik Region close to the Azerbaijan border. The Kapan plant site is located 1.5 kilometres east of the town of Kapan with the main mineralized zones occurring north of the town.
The Kapan Mine is owned 100% by DPM. The exploration license covers 350 km2.
The complex consists of the underground Shahumyan mine, with both rail and mechanized diesel transport systems, two primary crushing stations and ore stockpiles, a processing plant and various infrastructure facilities that were built to support the operation.
The Shahumyan underground mine is a polymetallic deposit, from which separate copper and zinc sulphide concentrates, both containing gold and silver by-products, are produced.
The town of Kapan, which is adjacent to the mining operation, has approximately 40,000 inhabitants. In addition, there are numerous villages in the Kapan area which can be accessed by asphalted road. The region represents a typical mountainous area located at the end of Arachadzor mountain range, which is the south eastern branch of the Bargushatk mountain range. Historically, the economics of the region have been dominated by mining. The main developments are the Kadjaran copper-molybdenum deposits and the Kapan copper-zinc mines. Agriculture, farming, gardening and cattle breeding are significant contributors to the economy of the region.
The Shahumyan polymetallic vein array was first discovered in the early part of the 20th century and was briefly exploited on a small scale during World War II. Detailed exploration of the Shahumyan deposit commenced in 1976 and to date at least 285,000 metres of diamond drilling and over 35,500 metres of underground access development from adits on the 780 metre, 820 metre and 860 metre levels and by two vertical shafts (not in use) have been completed. Below the 700 level short exploration drives have been completed at the 605 metre and 505 metre levels. The bulk of the historical surface and underground exploration drilling was conducted to the 550 metre mine level which is approximately 370 metres below the ground surface.
In 2008, three new declines were started to open up the deposit below the 780 level and provides access for mechanized equipment. To date, 1,200 metres of decline development has been completed and level development is underway on the 760 metre, 748 metre and 735 metre levels. Dewatering of the 700 metre level, through one of the two unused shafts, was initiated in February 2010 with pumped water reporting to the Geghanush tailings management facility. The water level has been lowered to the 714 metre level in preparation for further decline development.