Minister: Investment project of Amulsar mine development to be launched in spring 2016

Lydian International Ltd (UK) has signed a $325 mln agreement with the financial and investment funds to finance the development of the Amulsar gold mine in Armenia, Armenian Minister of Economy Karen Chshmarityan said before the Government's meeting on Thursday. 

The minister said that the International Finance Corporation and the European Bank for Reconstruction and Development will also allocate funds for that purpose. As a result, the total amount of investments will be $460-480 mln. Chshmarityan noted that it will be possible to export 12-14 tons of gold from the Amulsar mine. From the industrial perspective, it will also become profitable to launch production of gold bullion bars, he said. 

Minister Chshmarityan said that the investment project will start in spring 2015. A total of 1,500 people will be employed. "About 60 mln will be spent on gold and silver refining, 80 mln - on technological equipment, 160 mln - on installation and acquisition of manufacturing lines and crushing engines. All this will make it possible to launch production using advanced technologies," the minister said. 

Lydian International Limited is the sole shareholder of Geoteam CJSC. The latter was incorporated in 2005 and after an extensive campaign of geological exploration in Armenia discovered what is now its flagship project; the Amulsar mountain. Since 2006, the investments in exploration and other operations in Amulsar has amounted to nearly 70 million USD. Amulsar is a new gold discovery, the first for over 20 years in Armenia. Geoteam CJSC is carrying out geological exploration in the Amulsar area of RA Vayots Dzor Marz, under a Prospecting License, granted in 2006 by RA Ministry of Nature Protection. The key shareholders of the Lydian are IFC, EBRD and Newmont Mining Corporation.  The feasibility study demonstrates Amulsar as a compelling opportunity for a large scale, low cost operation utilizing open pit mining and conventional heap leach processing. Highlights include:  total recoverable gold of 2.1 million ounces over a 10.4 year mine life; gold production averaging over 200,000 ounces per year; initial capital costs of $426 million; low all-in sustaining costs of $701 per ounce of gold; 84% gold recoveries and 2.8:1 strip ratio; accelerated after tax-cash flows to support early payback and project financing. The Amulsar project envisages creation of 1,500 jobs in the course of construction and 700 jobs throughout the entire operation of the mine within the next 10 years.

In 2014 Karen Chshmarityan said that the gold export from the Amulsar mine would be 250 mln USD per annum. To note, in Jan-Oct 2015, the total export from Armenia amounted to $1.223 bln.