Thursday, February 23 2023 15:06

ArmInfo. Lydian Armenia will pay 75-100 million dollars to the state treasury every year in the form of taxes, duties and royalties. Hayk Aloyan Managing  Director of Lydian Armenia, which develops the Amulsar gold mine,  said in an interview with the Public Television of Armenia.

Speaking about the economic impact of the renewable project, he also  mentioned that during the construction phase, it will contribute to  the opening of 1000 direct jobs, 5000 indirect jobs, and during  operation, 950 jobs, of which 250 alone will be the employees of the  contractor company. In addition, the project will have a multiplier  impact in the context of the establishment of SMEs in the surrounding  communities.

At the same time, he noted that the project will have a positive  impact on Armenia, including from a reputational point of view.  Aloyan noted that today the entire international market is following  the Amulsar project in order to understand not only the situation in  the mining market of Armenia, but also to assess the country's  investment opportunities. In this vein, he noted that the project  will contribute to the inflow of investors to Armenia.

According to him, the Amulsar project is planned for 11 years, but  with the possibility of expansion up to 25 years.  Annual production  will be about 7 tons of dore, and in the context of 11 years, we can  talk about 2.5 million ounces of gold equivalent. However, the total  resources of the mine are estimated at 5 million ounces.

Yesterday, on February 22, the Government of the Republic of Armenia,  Lydian Armenia CJSC and the Eurasian Development Bank (EDB) signed a  memorandum of understanding, which marked the restart of the program  for the development of the Amulsar mine. 

Within the framework of the memorandum, as Minister of Economy Vahan  Kerobyan said,  $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, 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.  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.

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.  Since 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 mine 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.