Lydian International Ltd. (“Lydian” or “the Company”), a gold-focused mineral exploration and development company, provides an update on its Amulsar gold project in Armenia (“Amulsar” or the “Amulsar Gold Project”) and specifically the progress towards permitting and completion of the Company’s revised feasibility study “the FS”.
The FS, which incorporates the changes in scope, layout, and location first referenced in the Company’s news release of November 20, 2012 and in a subsequent release on December 17th, 2012 (which disclosed the positive results of a crusher optimization study carried out by SNC Lavalin) is intended to be a bankable document in order to facilitate the financing of the Amulsar Gold Project. As disclosed in the Company’s most recent MD&A filings, the target delivery date for the FS was Q3/2013 and recent discussions with all of the various contractors involved in the study indicate that this report is now approximately 95% complete and, except as noted below, tracking towards a delivery date which would meet this guidance.
However, during a Government session on July 18, 2013, the Armenian Government passed a resolution (the “Resolution”) that modifies the area defined as the “catchment basin” to Lake Sevan, Armenia's largest freshwater resource. The Resolution is yet to be promulgated and is then scheduled to come into force 10 days after its promulgation. According to the text of the Resolution, the borders of the catchment basin have been expanded to include the horizontal zone 3000 meters on each side of the “axis” to the Vorotan-Sevan tunnel. Based on the Company’s understanding of the Resolution, if projected to surface, the modified catchment basin includes the Company’s currently proposed location for its heap leach processing facility. Furthermore, the Resolution states that this part of the “catchment basin” is to be classified as the “Immediate Impact Zone” to Lake Sevan. This impacts the Company’s current mine layout plans as mineral processing activities are not permitted in this “Immediate Impact Zone”.
The Company has made inquiries with the Armenian Government regarding the Resolution and is seeking to better understand the impact the Resolution will have on the currently established Amulsar mine layout, including permitting and community approval of that layout, development plans and related activities such as the preparation and timing of any new feasibility study.
In response to the Company’s inquiries, the Government of Armenia has invited Lydian to participate in a joint working group with it. The working group process will almost certainly result in a delay to the delivery and publication of the FS. The Company understands that the working group will also concurrently review Lydian’s Environmental and Social Impact Assessment. The working group is expected to begin working within a week, with a view to reaching a conclusion in an expeditious manner.
Pending further clarity on the impact of the Resolution and the conclusions of the working group, Lydian is continuing to advance all of its exploration and development activities in Armenia. The Company has completed 30% of its planned 20,000 meter drilling program at Amulsar this year and continues to achieve important community support milestones.
About Lydian International
Lydian is a gold-focused mineral exploration and development company with expertise employing “first mover” strategies in emerging exploration environments. Currently Lydian is focused on Eastern Europe and, in particular, developing its flagship Amulsar gold project in Armenia. Lydian also has a pipeline of promising early-stage gold and base metal exploration projects in the Caucasus regions.
Lydian’s management team has a track record of success in grassroots discovery, in acquiring and developing undervalued assets, and in building companies. Lydian has a strong social agenda and a unique understanding of the complex social and political issues that characterise emerging environments. The Company’s significant shareholders include the International Finance Corporation which is a member of the World Bank Group and the European Bank for Reconstruction and Development. More information can be found on Lydian’s web site at www.lydianinternational.co.uk.