DEC. 1 2015 (The Conway Bulletin) — Toronto-listed miner Lydian International said it had reached a $325m financing agreement to develop a gold mine in Armenia, an initiative that will boost the country’s gold output.

In a detailed statement, the company said it will receive a line of funding from US-based investment firms Orion Mine Finance and Resource Capital Funds. The money will be used to start construction at the Amulsar gold project in south- central Armenia.

Once preparation work is completed next year according to the company, Lydian forecasts a production rate of around 6 tonnes of gold per year from the Amulsar project. For a comparison, Armenia produced 3.5 tonnes of gold in 2013.

Lydian has been working on financing the project since 2006.

A fall in gold prices, down around 13% year-on-year on Dec. 1 at $1,069/ounce – a 5-year low, has put pressure on mining companies with operations in the South Caucasus and Central Asia.

Lydian’s CEO Howard Stevenson said the agreement with Orion and RCF was a major step forward, especially considering the current financial markets.

“The Financing provides over 75% of the overall financing requirement, which is a strong achievement in the current financial market,” Mr Stevenson said in a company statement

Armenian PM Hovik Abrahamyan also said the government was pleased Lydian had won backing for the project.

“The financing of the construction of the Amulsar Mine represents a significant step forward in the development of the mining industry in Armenia,” Mr Abrahamyan said in a statement.

Gold is an important cash earner for the Armenian government but although potentially lucrative for the state, the project has angered people who worry about the environmental degradation. In 2014, police dispersed a large crowd of protesters around the mine.

ENDS

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(News report from Issue No. 259, published on Dec. 4 2015)