YEREVAN, June 19, /ARKA/. A gold refining factory is to be built in Armenia, which is supposed to help the Central Bank to partially restore its gold reserves, the chairman of the Central Bank Artur Javadyan said today in the parliament.

In 2014 Arthur Javadyan and Vartan Sirmakes, the head of Technocert company and co-founder of Franck Muller and chairman of ArmSwissbank, signed a memorandum on intentions to establish a factory in Armenia for refining precious metals. The factory was to refine gold and silver concentrates, produce pure gold in standard bank bullions and sell them in Armenia and abroad.

Javadyan said today that the factory will provide Armenian gold producers with the opportunity to export not dore alloys, but gold bullions. They will also have the opportunity to hand their gold to the factory and receive bank bullions or simply sell gold ore to the factory.

Javadyan recalled that in late 2003 the Central Bank made a strategic decision not to use gold in its external gross reserves and sold 1.4 tons of gold for $17 million. The move was explained by ‘the high liquidity on the gold market over the past few years.’

The Central Bank said at that time that ‘the high correlation between gold and the euro means that even without gold in international reserves the necessary level of diversification can be maintained and at the same time the yield of international reserves can be raised.”

In 2004 the Central Bank converted the proceeds raised from the sale of gold reserves to pounds. After the pound gained 8.4% against the US dollar, the Central Bank’s real return was about 13%, while the return on investment in gold could reach a maximum of 9%, solely due to an increase in gold price.

The net income from the sale of Armenia’s gold reserves amounted to 3 billion Armenian drams. The entire gold reserve sold at more than $400 per troy ounce.

Javadyan said today the opening of the gold refining factory will allow acquiring bank bullions in Armenian drams in the local market.

"I hope that next year we will already have that opportunity; everything is ready, the equipment has been delivered, and the factory construction site has been selected. He said the Central Bank will possess 5-6% of shares of the factory," said Javadyan. --0--