Vahan Kerobyan: Development of Amulsar mine to increase Armenia`s GDP  by 1%

ArmInfo. The development of the Amulsar mine will increase Armenia's GDP by 1%. On February 22,  Minister of Economy of Armenia Vahan Kerobyan stated after the  signing ceremony of the tripartite memorandum of understanding  between the Armenian government, Eurasian Development Bank(EDB), and  "Lydian Armenia" company, which marked the resumption of the  Amulsar mine exploitation project.

As the Minister said, as part of the memorandum, $150 million will be  invested, of which $100 million will be EDB loans, $50 million will  be provided by a local bank, and an additional $100 million will be  invested outside the agreement, Minister noted disclosing the source  of funding. "The funds will be used to complete construction work at  the mine and purchase the necessary equipment," he said.

As the minister said, 150 million dollars will be invested within the  framework of the memorandum, of which 100 million will be in the form  of EDB loans, 50 million will be provided by the local bank, and an  additional 100 million will be invested outside the agreement, noted  the minister, without disclosing the source of funding. "The funds  will be used to complete construction work at the mine and purchase  the necessary equipment," he said.

It was noted that within the framework of the transaction, the RA  government will receive 12.5% of the company's shares, for which it  will not pay anything, instead it will secure the transaction from  certain risks.

Kerobyan stressed that the company will annually provide revenue from  30 to 40 billion drams, which will increase the income of the mining  industry in Armenia by 20%.

In addition, according to the agreement, the communities adjacent to  the mine will receive annual assistance from the company in the  amount of $7 million.

At the same time, the Minister of Economy assured that the company  has all the necessary permits to start work. <That is, there are no  legislative prohibitions. All the necessary studies in accordance  with the legislation of Armenia were carried out and all permits were  obtained>, he stressed.

In turn, member of the Board of Directors of Lydian Armenia  Geoffrey  Coach, noted that the company has done everything necessary to  provide the best technologies, high environmental standards and  introduce leading international practices into the project.

<The project will give Armenia a direct economic effect in the form  of tax revenues, payments, hundreds of jobs, and will significantly  increase Armenia's GDP. In addition, thanks to the project, new  businesses and services of ancillary services will be created>, he  stressed.

It should be noted that the memorandum of understanding was signed by  Armenian Minister of Economy Vahan Kerobyan, member of the Board of  Directors of Lydian Armenia  Geoffrey Coach, and Vice Chairman of the  Management Board of the EDB Denis Ilin.

Ssince the end of 2018, the Amulsar gold mine has been blocked by  environmental activists. Construction work on it had to be suspended.

In March 2022, Minister of Economy of Armenia Vahan Kerobyan noted  that if nothing interferes, the work of the Amulsar gold mine will be  resumed, referring to the department's program of measures, which  contains a provision on solving the Amulsar problem.

Earlier, before the change of beneficiaries, Lydian Armenia was a  subsidiary of the British offshore Lydian International, which placed  shares on the Toronto Stock Exchange. Then the company went through  the process of delisting. As a result of the restructuring, the full  stake in the company was transferred to the newly established Lydian  Canada Ventures, owned by the U.S. firm Orion Mine Finance, and the  Canadian company Osisko Gold Royalties.     The total cost of the  Amulsar project is $370 million. The estimated period of operation of  the mine is 10 years and 4 months, while it is planned to produce an  average of 200 thousand ounces of gold annually.  The field is the  second largest in Armenia.  According to the company, the deposit  contains about 73,733 kg of gold with an average grade of 0.78 g per  ton, as well as 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 resort town of Jermuk, in the interfluve of the Arpa and  Vorotan rivers.

According to the RA Statistical Committee, a 3.2% decline was  recorded in the mining industry and open pit development in Armenia  in 2022 compared to 2021 (against a 0.8% decline a year earlier),  with a volume of 517.4 billion drams.