ArmInfo. The European Bank for Reconstruction and Development (EBRD) plans to invest up to CAD 10.5 million to purchase Lydian International's shares as part of its capital increase. The funds will be used to finance the Environmental and Social Mitigation Measures (ESMM) undertaken as part of the Amulsar Gold Project in Armenia.
According to EBRD, the Bank plans to invest up to CAD 10.5 million to purchase the Company's shares as part of its capital increase. The funds will be used to finance ESMM undertaken as part of the project. The Bank is providing Lydian with an equity injection, which will be earmarked for financing of the ESMM (as defined in the ESAP, including financing a biodiversity off set programme. In addition, a passive wastewater treatment facility will be constructed to ensure protection of local water sources. As an existing shareholder in the Company, the Bank together with an independent E&S consultant was closely monitoring project advancements including detailed review of the various iterations of the Environmental and Social Impact Assessment (ESIA), numerous site visits, workshops and ongoing dialogue with the company and its advisors.
At the request of ArmInfo, Geoteam Managing Director Hayk Aloyan commented on the prospects and opportunities for the Amulsar Project with the additional equity participation perspectives of EBRD earmarked to support ESMM. "Geoteam and Lydian are committed to best international practice in Environmental and Social Management of our Amulsar project. The recent disclosure of the amended Environmental and Social Impact Assessment and a through consultation process with a multitude of stakeholders is yet another step towards ensuring that Amulsar becomes a world-class well managed mining operation. It is both our institutional shareholders', including IFC and EBRD, and our company management commitment to see this mine advance in line with industry best practice. Today mining industry worldwide has come up with modern and applicable technological measures to ensure safe and sound operations and my firm belief is that Armenia too can have a modern and safe mining industry. Amulsar will be an important step towards that goal. It is also important to mention that while the industry worldwide is experiencing economic down-cycle, Lydian has secured most of the investment needed to build the project that will benefit the shareholders and bring economic opportunities to Armenia," Hayk Aloyan said.
UK domiciled Lydian International Limited is the sole owner of Geoteam CJSC that was granted the Mining Right for its 100% owned Amulsar Gold Project. On May 17, the company published its updated ESIA for the Amulsar Gold Project. Geoteam CJSC was granted a Prospecting License in 2006. Since 2006, the investments in exploration and other activities in Amulsar have amounted to nearly US$80 million. Among key shareholders of Lydian are international institutional investors including IFC and EBRD. The company plans about $370 million capital investments in the Amulsar Project. According to the feasibility study, the proven reserves are 2.5 million ounces, the total recoverable gold is 2.1 million ounces over a 10.4 year mine life, gold production is averaging over 200,000 ounces per year (10 million tons of ore), low all-in sustaining costs of $585 per ounce of gold, 87% gold recoveries. Amulsar is the second largest deposit in Armenia in terms of the reserves. The peak workforce during the Project's construction phase could be as high as 1,300, while the total workforce during operations within the next more than 10 years is estimated at 650-700 employees.