Lydian reports first resource at Amulsar in Armenia

Lydian International (LYD-T) has defined an inferred resource at its Amulsar property in Armenia in just one field season.

The resource at Amulsar — a high-sulphidation type epithermal gold project in the central portion of the country – was estimated using data from a recent 13,000-metre drill program confined to a prospect area known as Tigranes-Artavasdes, which represents just one fifth of the surface area known to carry gold mineralization at Amulsar.

At a 0.4 gram cut-off grade, and based on 83 drill holes, Amulsar has an inferred resource of 31 million tonnes grading 1 gram gold per tonne for total contained gold of 1 million ounces.

Mineralization is from surface and entirely oxide with preliminary metallurgical testing indicating recoveries greater than 90%.

“The resource has not been closed off and potential exists to define additional resource extensions of the known deposit, in all directions,” Tim Coughlin, Lydian’s president and chief executive, said in a statement. “The goal for 2009 is to drill-for-size and extend the current limits to reveal the true potential of the system.”

Lydian identified the gold bearing potential of the project in mid-2006, started initial scout drilling in 2007, and exploratory drilling in 2008 to test the bulk tonnage potential and confirm a preliminary gold resource.

Lydian’s wholly owned Armenian subsidiary, Geoteam, owns 95% of the licence and the project is currently being explored as part of a 50-50 joint venture with Newmont Overseas Exploration, a wholly owned subsidiary of Newmont Mining Corp. (NMC-T, NEM-n).

Lydian is developing advanced precious and base metal assets in Armenia and Kosovo. The two East European projects are gold at Amulsar in Armenia and zinc, lead, silver and gold at Drazhnje in Kosovo.

Lydian has a pipeline of other promising gold and base metal exploration projects in the Balkans region as well, and operates a 50-50 gold and copper exploration joint venture with Newmont Overseas Exploration, in the south Caucasus region.

The company’s two largest shareholders are Newmont Mineral Holdings owned by Newmont Mining Corp. and International Finance Corporation, part of the World Bank Group.

On March 18, IFC’s board approved an additional equity investment in Lydian of C$1.4 million at a price of 42 per share, bringing its interest in Lydian to about 18%. IFC’s new shares will be accompanied by a full warrant with a five-year exercise period and price of 59. The investment will be IFC’s fourth investment in Lydian.

IFC’s investment follows news earlier this month of a C$1.6 million placement from the European Bank of Reconstruction and Development.

At presstime Lydian was trading at 40 per share. Over the last year it has traded in a range of 11-70 per share and the company has 39.9 million shares outstanding.