IFC has proposed to invest 40 million USD in Amulsar construction financing arrangement

According to the press release of Geoteam CJSC, IFC participation in the project financing may include:  exercise of its preemptive right to full or partial sale of Lydian International shares by Orion Mine Finance (Orion) and Resource Capital Fund VI L.P. (RCF) investment funds in an amount of 80 mln USD and the 25 million USD public equity offering. IFC also considers participation through stream agreement (partial or full purchase of produced precious metal at a fixed, set in advance price-ed. n.), term loan facility, and cost overrun 

facility.  Howard Stevenson, Lydian's President and CEO, stated, "IFC is an important shareholder and has been a valued resource and partner of Lydian for many years. IFC is a well-regarded investor known for successfully contributing to the environmental and social 

excellence of the projects it supports. We are pleased to have IFC join with Orion and RCF to provide financial and other support during the Company's development of Amulsar." Subject to all conditions being satisfied, completion of IFC's investment is expected by the end of June 2016.

 

IFC has been a shareholder of the Company since 2007 and presently holds approximately 7.9% of the Company's outstanding ordinary shares. To recall, in December 2015 Lydian International arranged a $330 million construction-financing package to be provided by Orion 

Mine Finance ("Orion") and Resource Capital Funds ("RCF"). 

 

Earlier on November 20 Lydian had announced value engineering results for Amulsar project with a pre-production capital costs decrease by 1.3% to $370 million and all-in sustaining costs decrease by 17% to $585/oz of gold. 

 

Orion Mine Finance is a mining-focused investment business with approximately $1.85 billion under management specializing in providing flexible capital investment solutions to mining companies in the base and precious metals sector. Orion has demonstrated capability in debt, equity, convertibles, offtake, streaming, and royalty investments. 

 

Resource Capital Funds is a private equity firm established in 1998 with a mining sector specific investment mandate spanning all hard mineral commodities and geographic regions. Since inception, RCF has supported 142 mining companies, with projects located in 45 countries and across 29 commodities. 

 

To note, Amulsar is a new gold discovery, the first for over 20 years in Armenia. Geoteam CJSC is carrying out geological exploration in the Amulsar area of RA Vayots Dzor Marz, under a Prospecting License, granted in 2006 by RA Ministry of Nature Protection. The key 

shareholders of the Lydian are IFC, EBRD and Newmont Mining Corporation.  The feasibility study demonstrates Amulsar as a compelling opportunity for a large scale, low cost operation 

utilizing open pit mining and conventional heap leach processing.  Highlights include:  total recoverable gold of 2.1 million ounces over a 10.4 year mine life; gold production averaging over 200,000 ounces per year; initial capital costs of $426 million; low all-in sustaining costs of $701 per ounce of gold; 84% gold recoveries and 2.8:1 strip ratio; accelerated after tax-cash flows to support early payback and project financing. The Amulsar project envisages creation 

of 1,500 jobs in the course of construction and 700 jobs throughout the entire operation of the mine within the next 10 years. Earlier Lydian Int. presented Amulsar project on the international expo and investment forum of the Prospectors and Developers Association of 

Canada, PDAC-2015.