Tuesday, May 19 2015 17:08

 "The economic impact of investment in mining could be significant.  The direct impact of the Amulsar project on GDP, based on calculations by an independent expert group and our current feasibility study, will be as high as $120 mln annually (...) The operation will contribute an estimated $488 million directly to the state budget through taxes and royalties over the life of the mine, with about an additional $156 million in taxes generated indirectly from other business activities generated by the project. We expect to be among top 5 corporate taxpayers in the country when we start production", Howard Stevenson President and CEO of Lydian International said during his speech at EBRD Annual Meeting and Business Forum held in Tbilisi, on May 14-15. 

"Geoteam" CJSC reports that the EBRD annual event brought together several hundred business and government leaders, representatives of civil society, International Institutions and global decision- makers from over 60 EBRD shareholder countries. The two-day conference was set to define EBRD strategies for the coming years and discuss challenges, issues and opportunities in the modern business environment and economies of developing countries. In 2014 EBRD has invested around US$9 billion in more than 30 countries of operations, fostering economic development project in developing countries, including Armenia.   

"Encouraging and fostering entrepreneurship has been at the heart of the EBRD's activities from the start. Our mandate has a very clear private sector commitment because we see it as the driving force of the kind of economy we believe serves societies best (:)At a time of geopolitical tensions and economic uncertainty, the Bank can be a bridge-builder and integrator", Sir Suma Chakrabarty, EBRD President said during his speech. Several panel discussions and sessions with the representatives of private and public sectors covered topics like: investing in times of geopolitical uncertainty, youth employment, sustainability, innovation, investing in green infrastructure and other pressing issues for developing countries.  

Over a dozen representatives of leading business companies, Government as well as civil society attended from Armenia.   During his speech the President and CEO of Lydian International, Howard Stevenson, emphasized the EBRD's and other International IFIs' role in raising the bar for environmental and social standards in mining in developing countries.    "World class policies and practices in the areas of Health and Safety, Environmental Responsibility and Stakeholder Engagement, will be critical to sustaining a conducive legal, regulatory, and social climate for long term investments in exploration and mine development.  These include compliance with the EBRD Performance Requirements as well as with the standards of other multilateral agencies.  Encouraging signals from the Government about signing up to the Extractive Industries Transparency Initiative are a further step in the right direction", the President of Lydian stated. In his address, Mr. Stevenson emphasized the importance of modernization of the mining industry in Armenia and building trust.

"With many of the operations having been developed during the Soviet period, there are substantial legacy issues around Health and Safety for the workers in the mines, relationships with local communities and environmental stewardship.  Practices today are quite mixed and public trust of mining companies is very low.  Due to this low level of public trust, it has been a sometimes difficult path for Lydian to raise the debate about mining to a new level and we have certainly had our ups and downs in engaging with all stakeholders.  Lydian has put considerable effort into building its reputation as a responsible company among many constituencies, bringing a new behavioural culture to the industry in the country. There is still great room for improvement in industry practice inside the country and we believe investments like Amulsar will be key to raising the bar", Howard Stevenson, President and CEO of Lydian International said during his speech at the EBRD annual conference. 

Lydian is an emerging gold developer, focused on its 100%-owned Amulsar Gold Project in Southern Armenia. Amulsar will be Armenia's largest gold mine, with total estimated mineral resources containing 3 million gold ounces as measured and indicated resources, 2 million gold ounces as inferred resources, and estimated annual production targeted at 200,000 gold ounces.  Lydian received approval of the Mining Right for Amulsar in late 2014. This represents the final stage of the mining permitting process and grants Lydian the right to develop the Amulsar Gold Project in line with the parameters detailed in the updated feasibility study (October 2014). The updated 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. Lydian International was founded in the UK in 2005. It is the sole shareholder of "Geoteam" CJSC. The majority shareholders of Lydian are the IFC, the EBRD and Newmont Mining Corporation.  

To recall, Lydian International has recently presented its Amulsar Project at the Prospectors' and Developers' Association of Canada (PDAC) trade show in Toronto, Canada. 
The EBRD has been active in Armenia since 1993 and to date has invested over EUR889.2 million into 136 projects. In 2014, the EBRD signed 18 projects worth a total of EUR114 million in Armenia.

According to the National Statistical Service of Armenia, in 2014 the mining industry's output was 193.2 bln AMD (down 7.4% versus 2013), with over 97% or 188.2 bln AMD being the metallic ore output (down 7.3% versus 2013). The share of mining in the total industry was 15% in 2014 versus 16% in 2013.