EDB is ready to support Amulsar mine development project - Podguzov

ArmInfo.The Eurasian Development Bank is ready to support the project to develop the Amulsar gold  mone. On May 15, in Almaty, on the sidelines of a conference of investors-members of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), Chairman of the EDB Nikolai Podguzov said in an interview with journalists, answering a question from ArmInfo.

"We are in the process of forming a package of documents for  financing," Podguzov said. At the same time, he added that not  everything depends on the Bank in terms of the speed of disbursement  of funds.

In turn, EDB Deputy Chairman of the Management Boar Denis Ilyin,  in  an interview with journalists, touching upon the Amulsar project,  noted that traditionally such projects have both positive and not  very positive aspects. "The positive one is the impact that its  implementation will have on Armenia, primarily from an economic point  of view. Since the Government considers it right, the state says it  is right, so we got involved>, said the deputy chairman of the board.  At the same time, he touched upon the environmental aspects of the  project. <This is not to say that a particular mining project is a  wonderful thing for the environment, especially if it is open pit  mining, as it is supposed to be. Sure, it leaves scars on the ground  and nasty enough, but let's admit it, humanity itself doesn't do much  good for the environment in every way. Even the construction of any  city is a mockery of nature. Therefore, our task is to ensure that  this project provides the economic benefits it was supposed to  provide, while minimizing the environmental consequences >, Ilyin  emphasized, adding that it is of key importance for the Bank.   Speaking about the stage at which this whole process is, he noted  that the EDB spoke with the client, discussed all aspects, and now  the conclusion of the technical consultant's environmental impact  assessment is expected. He said that it is important for the Bank to  make sure that everything is done correctly, and that is why this  conclusion will be carried out under the control of the EDB. <We know  who is doing what, and what results we can then expect. If we put our  name on the table, then accordingly we must be completely sure that  everything there is as required >, said the Deputy Chairman of the  EDB Board. He added that by the end of the summer, approximately in  August, the results of the conclusion of the examination are  expected.

At the same time, Ilyin said that the expertise is being carried out  by the Hatch company, which is a technical consultant, and the Bank,  in turn, separately also conducts an environmental audit. In this  vein, he said that last week there was a big visit of consultants to  the site in Jermuk, and they are now waiting for the first results.

"I think that by the end of the summer there will be certainty in  terms of the project itself - whether it is moving forward or not,"  the Bank representative said, adding that if the results of the  examination do not satisfy the EDB, they will not implement it. Ilyin  added that one of the Armenian banks, which expressed willingness to  participate in the project, is also waiting for EDB's actions  regarding the project. However, he did not disclose the name of the  local bank that will participate in the project.

It should be noted that , on February 21, 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,  $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. Within the framework of the  transaction, the Armenian government will receive 12.5% of the  company's shares, in exchange for which it will insure the  transaction against certain risks.

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 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.