ArmInfo. The government will provide Lydian Armenia with budget guarantees of up to $150 million. The decision was made on February 27 at a regular meeting of the Cabinet of Ministers.
As stated in the explanatory note to the document, the action plan of the Government of the Republic of Armenia for 2021-2026 envisages the implementation of consistent work on the Amulsar deposit development program, which will contribute to strengthening the sustainability of the economy of the Republic of Armenia, developing the mining industry of the Republic of Armenia, unlocking the socio- economic potential of the border region, and will also provide significant revenues to the state budget in the medium term.
According to the Ministry of Economy, the operation of the mine is of vital importance for the development of the Armenian economy, since due to its scale it will form sustainable supply and demand value chains, which will contribute to the formation of a more stable and dynamically developing macroeconomic environment, both directly, by providing the state and community budgets with income from duties, taxes, local payments, and will have a positive chain effect on the activities of other economic operators by generating demand (warehouses, logistics, etc.).
According to the company, the construction and operation of the project will be carried out in accordance with the best international standards in the areas of environmental protection, social protection and management, as well as occupational health and safety, which will also have an impact on the development of the mining industry in the Republic of Armenia>, - the document says.
According to the results of previously conducted studies presented by the Ministry of Economy, the implementation of the project is expected to have a direct and indirect impact on the economy of the Republic of Armenia in the amount of approximately 1.0-1.5% of GDP per year. More than 1,000 workers will be involved in the construction of the Amulsar gold mine, and about 700 jobs will be created in the processing shops, laboratories and administration during the entire period of mining or operation of the project.
According to the BDO report, the Company's shares (currently 87.5% of the Company's shares) and the Company's permit are pledged in exchange for a loan agreement signed on November 30, 2015 pursuant to the signed on December 3, 2015 between , , and and the signed on December 22, 2015, the Company's immovable and movable property, as well as all metallic materials to be sold by the Company, in any form and condition, which were mined, produced, extracted or otherwise recovered within the framework of the Company's project, including ore or any other product obtained as a result of further crushing, processing or beneficiation thereof, including crude and refined gold, which belongs to the Company by right of ownership, are also pledged.
In such circumstances, the government, as a means of securing the counterclaim that arose in connection with the payment of the budget guarantee, considered it appropriate to accept a subsequent pledge issued in favor of commercial banks as security for the credit obligation secured by the guarantee," the draft decision states.
The Government, having compared the risks associated with the provision of a budget guarantee and the positive impact of the provision of a budget guarantee on the mining industry and the socio-economic development of the Republic of Armenia, assessed by the Ministry of Economy, as well as taking into account the prices of gold on the international market, initiated the provision of a budget guarantee in the amount of up to 150 million US dollars to attract credit funds from the existing banking system of the Republic of Armenia with a maturity of up to five years.
At the same time, as a prerequisite for issuing a guarantee, it is envisaged that it will be provided if, within six months from the date of entry into force of the resolution, the company submits to the Ministry of Finance a report on the assessment of the market value of the balance sheet assets included in the company's financial statement, approved by an independent audit organization, confirming that the amount of the guarantee does not exceed 20% of the market value of the balance sheet assets included in the financial statement of Lidian at the time of filing an application for a guarantee and issuing the guarantee.
As previously reported, the total cost of the Amulsar project is $370 million. The mine life is 10 years and 4 months, with an average of 200 thousand ounces of gold planned to be mined annually. The deposit 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 southeast of the country, 13 km from the resort town of Jermuk, in the interfluve of the Arpa and Vorotan rivers.
As Daniel Azatyan, Chairman of the Union of Banks of Armenia (UBA), reported during a press conference on February 25, several Armenian banks are interested in financing the Amulsar project.
Since the end of 2018, the Amulsar gold deposit has been blocked by environmental activists. The government was unable to come to a decision on resuming construction of the mine and work there had to be suspended.
At a press conference in 2024, Armenian Economy Minister Gevorg Papoyan (in November 2024) stated that the mine could possibly begin operation in the fourth quarter of 2025. At the same time, he said that $250 million was needed to launch the latter. , Papoyan added. He also noted that with a full cycle of the mine's operation, Armenia's GDP will grow by an additional 1% annually, the economy will receive $120 million in taxes each year, numerous jobs will be created, communities bordering the deposit will receive subsidies, etc. , the minister said.
