ArmInfo. On February 5, Lydian International shares will complete the delisting process and cease to be listed on the Toronto Stock Exchange. This is stated in the official message of the company, received by ArmInfo.
According to information, in connection with the forced suspension of the Amulsar mine construction project, at the end of last year, the company had to appeal to a Canadian court to protect the interests of its beneficiaries and shareholders and begin the restructuring process. The report notes that the process of delisting the shares is connected with the illegal blockade of the field (by green activists - Ed. note) and the inaction of the government (Armenia), which led to the fact that Lydian was unable to attract additional financing to cover unforeseen expenses and as a result was forced declare default.
The company received an order to protect creditors in accordance with Canada's Companies Creditors Arrangement Act - CCAA in order to be able to solve their problems. To note, CCAA is a federal law that allows insolvent corporations, which owe their creditors more than $ 5 million (CAD), to restructure their business and financial affairs.
The company said in a statement that the company's shares cannot be traded on the Toronto Stock Exchange and may be in over-the-counter trading. However, they are forbidden to trade with shareholders who are insiders or those who hold insider information. At the same time, the company warns that if, as a result of the arbitration, Lydian receives compensation from the Armenian government, it will be able to distribute the balance of funds among its shareholders only after paying all of its debt obligations and priority expenses. In any case, the report says, enforcement in this format may take years and will not be sufficient to cover all obligations. The company, however, is not optimistic about the possibility of its sale of the Amulsar project to other investors. "In any case, the ongoing blockade of the mine's territory will have a significant impact on the price and possibility of sale. But even if the remaining amount is sold, it will probably not be enough to pay shareholders", the report said. Without optimism, the company is considering the possibility of continuing the project. For this, the report says, "Lydian" will require significant additional financing: <Current capital can be restructured as a result of the protection process under the CCAA act, which, in turn, will lead to a significant reduction or liquidation of capital''.
To recall, the other day, Prime Minister of Armenia Nikol Pashinyan expressed his point of view on the issue of Amulsar. He emphasized that he was both interested and not interested in the work of the mine. "I am interested in the work of the mine, because if it worked, then the country would have recorded even higher economic growth, much higher than what we have today, and numerous jobs would be created. But, on the other hand, I do not want the mine to be exploited to the detriment of the residents of Jermuk and would cause irreparable damage to the ecology of Armenia. I will not allow the mine to harm our people. Since the road to the mine is now blocked, we cannot understand whether its operation will lead to irreversible consequences or not, "he said.
At the same time, he noted that since the company undergoes delisting on the stock exchange (Toronto), that is, people who want to buy up (at a cheap price - Ed. note) shares of the company in the hope of using them for certain purposes. The prime minister called this unacceptable and noted that the state would take the most stringent measures against these (speculative) actions.
To recall, Lydian Armenia is a subsidiary of the British offshore Lydian International. The total cost of the Amulsar project is $ 370 million. The field's life was envisaged at 10 years and 4 months, with an average of 200 thousand ounces of gold planned to be mined annually. Amulsar field is the second largest reserves in Armenia. According to the company, the deposit contains about 73733 kg of gold with an average grade of 0.78 g per ton, and 294.367 tons of silver with an average grade of 9.29 g per ton. It is located in the south-east of the country, 13 km from the spa town of Jermuk, between the rivers Arpa and Vorotan.
It should be noted that despite the assurances of the Lydian company that about $ 300 million has already been invested in the development project of the Amulsar gold deposit, environmentalists do not share the government's enthusiasm about the attractiveness of the mine exploitation plan. Environmentalists fear that the exploitation of the field, during which sodium cyanide will be used, may lead to the oxidation of water in rivers. Contaminated waters will become unsuitable for drinking and irrigation and may cause irreparable harm to the mineral springs of Jermuk and the ecosystem of Sevan.
Since the end of 2018, the road to the field has been blocked by environmental activists. In December, the company announced that it was launching a delisting procedure for its shares, and in fact announced a default.
