Amulsar mine development could start next spring - EBD

ArmInfo. Development of the Amulsar gold mine in Armenia may begin in the spring of 2025 if all  remaining issues are agreed upon. Senior Managing Director of the Eurasian Development Bank Denis Ilyin stated this on the sidelines of the EDB Annual Meeting and Business Forum in a conversation with  ArmInfo and Sputnik-Armenia correspondents on June 27, noting the corresponding question.

He admitted that the timing of the environmental assessment had been  significantly delayed. "Moreover, the Bank's position did not change.  Of course, there were some questions from investors. But the most  important thing was that they sorted things out among themselves  regarding financing - these are old investors - American funds and a  new operating partner. Now they are formalizing the relationship," a  representative of the Bank clarified.

At the same time, Ilyin proposed dividing the existing issues  regarding the development of the Amulsar gold mine into three  components.

According to him, the first component is environmental. "We initially  had environmental requirements. We received a conclusion, passed it  on to the client, they considered it for quite a long time and now we  are finally reaching some kind of final stage. We were supposed to do  this in June, but we didn't have time, but I think that in We will  complete work with the draft environmental plan in July," said a  representative of the Bank, explaining that the EDB had requirements  on environmental issues that the client had to agree with. Ilyin  informed that the Bank and the client managed to find a consensus  with which the EDB was comfortable and the client was not offended.

"The second is interaction with the state. The state became a  shareholder, and we discussed some guarantees of support from the  state," explained the senior managing director of the EDB. At the  same time, he explained that political risks exist in all states, and  in Armenia as well. "This week we finally sent the final version of  our document with the government, and I hope that next week we will  fix it," he said, explaining that the Ministry of Finance of Armenia  is considering it.

And the third, according to him, is direct financing, submission of  loan documentation. "There were some questions between the existing  investors of the project regarding financing. We are talking about  American funds and a new operating partner. In this regard, the  project was on pause. The shareholders decided among themselves on  the amount of financing, they decided on the restructuring of old  debts. They promised almost next week send the final version so that  I understand the structure with which we are working," Ilyin noted,  adding that, as I said above, a new operating partner has appeared.  He clarified that these people are investing $75-100 million on their  part as part of the investment project.  "Thus, if everything goes  according to plan, then in July all these issues should be resolved.  And by August we will be ready to move forward with financing," he  noted. At the same time, Ilyin emphasized that today the project does  not stand still, it is not frozen, and old and new investors are  spending money on preparatory work. Speaking about the new investor,  Ilyin did not name him, saying that he himself had not yet received  clear information from Lydian Armenia. At the same time, he explained  that he knows that these are quite experienced mining companies that  have implemented projects in Africa and Southeast Asia.

"If all these plans are implemented, preparatory work will begin in  the fall, and actual development will begin in the spring of 2025.  That is, the start of the project next year is quite realistic,"  Ilyin concluded.

On February 22, 2023, the Government of the Republic of Armenia,  Lydian Armenia CJSC and the Eurasian Development Bank signed a  memorandum of understanding, which marked the restart of the program  for the exploitation of the Amulsar field. It was noted that within  the framework of the memorandum, $150 million will be raised, of  which $100 million will be loan funds from the EDB, $50 million will  be provided by a local bank, and an additional $100 million will be  invested outside the agreement by shareholders. It was stated that  the operation of the Amulsar mine will provide the state treasury  with annual revenues of 30-40 billion drams, and with the launch of  the mine, about 1,000 new jobs will open in the Vayots Dzor region.  According to estimates, as a result of the operation of the Amulsar  mine, Armenia's GDP will increase by 1%.

January 18 this year The Armenian government accepted a donation of  12.5% of the shares of the operator company Lydian Armenia and  entrusted the authority for their management to the Ministry of  Economy of the Republic of Armenia.

The field is the second largest in reserves in Armenia. According to  the company, the deposit contains approximately 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  southeast of the country, 13 km from the resort town of Jermuk,  between the Arpa and Vorotan rivers. Construction of the mine was  suspended in 2018 due to environmental concerns.