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 Friday, December 25 2015 08:11

Avanesov Alexandr

Armenian Economy Ministry: Project on Amulsar mine development to be launched in spring 2016

Armenian Economy Ministry: Project on Amulsar mine development to be launched in spring 2016

The project on Amulsar mine development will be launched in spring 2016, when the weather conditions change for the better, Vahagn Lalayan, Head of the Investment Policy Management Department of the Armenian Ministry of Economy, said at a press conference on December 24. 

He said the project will be implemented by Lydian International Ltd (UK), which has already raised the necessary financial resources. A total of $395 mln will be invested in the project. The construction at the mine will presumably be completed within 2 years. 

Earlier in December, Armenian Minister of Economy Karen Chshmarityan said that it will be possible to process approximately 10 tons of ore per annum. From the industrial perspective, it will also become profitable to launch production of gold bullion bars, he said. A total of 1,300 people will be employed. "About 60 mln USD will be spent on gold and silver refining, 80 mln USD - on technological equipment, 160 mln USD - 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. 

To note, 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 investment 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. 

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