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Amulsar is a gold mine in Armenia. Amulsar gold-bearing quartzite deposit is located on the borderline of Vayots Dzor and Syunik Province, within the ridge area of north, north-western branching of Zangezur Range, at the elevation of 2500-2988m. Required permits to operate the Amulsar Gold Project belongs to Lydian Armenia registered in the Republic of Armenia.[1]

Lydian Armenia’s Amulsar Project is the largest Western investment project in Armenia since independence.[2]

In 2011, Lydian was conferred Mining Journal’s “Outstanding Achievement” Award for discovery and exploration of the Amulsar Mine.

During the business conference “Sustainable Mining in Armenia” held in Yerevan on November 16th 2016, former US Ambassador to Armenia Richard M. Mills Jr.|Richard Mills noted that the Amulsar Gold Mine Project was the vivid example of ensuring responsible mining in Armenia using environmental standards.[3]

Representatives of Armenian and international academic community considered the Amulsar Project the most extensively studied and well-managed project in terms of environment protection.[4][5][6][7][8]

Mine Exploration

A group of Armenian and international geologists led by geologists Tim Coughlin and Hayk Aloyan discovered and explored the Amulsar gold-bearing quartzite deposit as a result of geological exploration and prospecting on Mount Amulsar since 2005.[9]

Exploration activities in the Amulsar mineralization zone identified combined Tigranes-Artavazdes, Erato, Arshak and Orontes sites with their own internal structures. Reserves of Tigranes-Artavazdes, Erato sites were approved in accordance with Armenian legislation, and the right for their extraction belongs to Lydian Armenia.

According to Lydian’s information, overall approved reserves amount to 89,376.3 Kt of ore, 73,733 kg of gold, 294.367 t of silver.[10] The mine is to be developed by combined Tigranes-Artavazdes and Erato open pits, with an annual mining output of 10 Mt of ore.

The operation of the mine is planned for 10 years; however, specialists of the Company assure that the Project has a great potential for expansion. According to the Project, an additional 5.5 years are provided for the closure of the mine.

Metals from the mine are to be extracted using the heap leaching method, which will be used in Armenia for the first time.

Lydian Armenia

Lydian Armenia (former Geoteam) was founded in 2005, and as a result of extensive exploration discovered the Amulsar Gold Mine, which is currently its flagship project.

Hayk Aloyan, PhD in Geology, is the cofounder of Lydian Armenia and managing director since 2005.

The company committed to follow the Equator Principles, and the performance standards and requirements of International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD).[11]

Lydian International Limited registered in British Crown dependency of Jersey was 100% shareholder of the Company until May 2020. In 2006, Lydian International established a joint venture (with 50/50 shares) with the world’s largest Newmont Mining Corporation.

In 2007 and 2008, International Finance Corporation (2007-2016) and European Bank for Reconstruction and Development (2008-2020) joined the Company as major investors.[12].

Lydian was listed in Toronto Stock Exchange since January 2008.[13]. Toronto Stock Exchange is regarded as the best platform for mining companies. Following the listing, well-known major financial institutional investors, such as Amber Capital, Franklin Resources, Donald Smith Value Fund LP, Sprott Resources, Van Eck and many other institutional and private investors joined the company.

Since May 2016, Lydian raised more than USD 420 million from three major institutional investors: Resource Capital Funds, Orion Mine Finance, Osisko Gold Royalties, for the construction of the Amulsar Project. ING Bank, CAT Finance and Ameriabank also participated in the Project funding[14][15].

After illegal blockades of the access roads to the Amulsar Project in June 2018, Lydian faced serious financial problems, which resulted in the company restructuring that began in Canada in December 2019[16].

As part of the restructuring process, Lydian International was delisted from the Toronto Stock exchange in February 2020.[17]

As a result of the restructuring process, in May 2020, Lydian Canada Ventures owned by American Orion Mine Finance and Canadian Osisko Gold Royalties, became the 100% shareholder of Lydian Armenia. Both the institutional and minor individual shareholders lost their investments in the Amulsar Project. Among them were thousands of Armenian citizens and Armenians from Diaspora[18][19].

Developments around Lydian Armenia and the Amulsar Project suspension had a negative impact on foreign direct investments, and the investment credibility of the country[20][21].

Economic Impact of Amulsar

According to Hayk Aloyan, Managing Director of Lydian Armenia, at the construction phase, the Amulsar mine was one of the largest mining projects in the world[22] and the largest international investment in Armenia. He stated that more than USD 90 million were invested in the Project for geological prospecting, and USD 370 million during the construction phase[23]. The construction of the Amulsar Project commenced on August 19, 2016, with the participation of high-ranking officials of the Armenian Government. Prior to illegal blockades of the Amulsar access roads, more than 1,300 people were involved in the Amulsar Project, of which almost 500 were from the surrounding communities.

According to a Lydian’s board member Jeff Couch, the Company plans to invest about USD 200 million to complete the construction of the mine[24]. According to the same source, up to 1,000 direct jobs will be created at this stage of construction of the Amulsar Project, and 750 direct permanent jobs and 200 permanent contractors – during the next 10 years of mining. The international statistics indicates that in the mining sector, one direct job creates 5-6 indirect jobs.

According to Lydian’s calculations, only the royalties and the profit tax to be paid by Lydian will amount to USD 60-70 million per annum. Lydian Armenia is expected to rank among the top 5 major taxpayers at the operational phase.

Environmental Studies Undertaken by Lydian Armenia

Lydian Armenia's environmental team headed by Armen Stepanyan, PhD in Engineering, and with the involvement of local and international experts, in 2008 started to carry out environmental and social studies and design of environmental management.

In accordance with Armenian law, the Company performed Environmental Impact Assessment (EIA) of the Project, as well as, for the first time in the mining sector, Environmental and Social Impact Assessment (ESIA)[25]. ESIA is the requirement of the international financial corporations and banks governed by Equator Principles, for making investments in a project. According to Lydian Armenia’s official information, the Company has spent more than USD 6 million on the preparation of these documents alone, involving international and local scientific institutions (Wardell Armstrong International[26], Golder Associates[27], Global Resource Engineering[28], Treweek Environmental Consultants[29], Environmental Resource Management, LUC[30], Institute of Botany, National Academy of Sciences of the Republic of Armenia, RA NAS Scientific Center of Zoology and Hydroecology[31], etc.). These documents are unprecedented in Armenia in their amount and quality.

Lydian Armenia committed to follow the best international practice and standards at the construction and operation stages and planned to invest about USD 70 million in environmental management activities (treatment plants, groundwater lining systems, dust suppression systems and measures, etc.).

International Practice and Standards in Amulsar Project

Amulsar is the first and so far, the only mining project in Armenia to conduct environmental and social impact assessment (ESIA) and monitoring in line with the standards of International Finance Corporation and European Bank for Reconstruction and Development[32]. This document is the basis on which international financial corporations and banks agree to make investments in a particular project.

The Company is also the first in Armenia to be a signatory to International Cyanide Management Code. The Amulsar is the fifth project in the world to obtain a pre-production certificate, and the first mining project in Armenia to be certified since the amendments to International Cyanide Management Code in 2016, which include stricter audit guidelines[33][34][35]. Cyanide Code regulates issues related to manufacture, transport and use of cyanide in the production of gold. Cyanide Code is a voluntary industry initiative. Both gold mining and cyanide manufacturing and transporting companies may become a signatory to the Cyanide Code. International Cyanide Management Code was developed by multi-stakeholder Steering Committee, under the auspices of United Nations Environment Program.

In 2017, for the first time in Armenia, Lydian Armenia also initiated the establishment of the Amulsar Independent Advisory Panel, which comprised Armenian and international environmental and social performance experts[36]. The Panel was chaired by internationally respected responsible mining and conflict resolution expert Dr. John Harker[37][38]. In May 2018, the Panel published its first report on Amulsar Project[39].

Lydian Armenia has introduced and implemented international standards, practice and culture of occupational health and safety in Armenia. In 2018, Lydian Armenia achieved a milestone of 2 million man-hours without a lost-time injury[40].



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