Lydian Gets 25-Year Mining Licence In Armenia

Lydian International (LYD-T, LYDIF-O) has been granted a 25-year mining licence for its Amulsar gold project by the government of Armenia — one of the first licences granted under the country’s new mining law.

“The Armenian government is committed to supporting foreign investment in the mineral sector and our licence exemplifies that,” Tim Coughlin, Lydian’s president and chief executive, told The Northern Miner.

Lydian must still complete a general work plan and financial outline, an environmental impact assessment and a mining safety assessment before it can activate the licence.

“The plan this year is to step-out drill, close off the extents of mineralization and develop the resource,” Coughlin says. “When we start feasibility depends very much on how large the system is and where we get to by the end of this year.”

Lydian discovered Amulsar — a high-sulphidation type epithermal gold project in central Armenia — three years ago.

The Toronto-headquartered junior active in Eastern Europe identified the gold-bearing potential of the project in mid-2006. It began initial drilling in 2007 and in 2008 completed a 13,000-metre drill program to test the bulk-tonnage potential and estimate a gold resource.

In March 2009, Lydian announced a National Instrument 43-101- compliant inferred resource estimate of 1 million oz. gold and said it’s confident that this year’s drill program will expand the resource. At a gold cutoff grade of 0.4 gram per tonne, Amulsar currently contains inferred resources of 31 million tonnes grading 1 gram gold per tonne.

The Amulsar licence is 95%- owned by Lydian’s Armenian subsidiary, Geoteam CJSC. The project is being explored as part of a 50-50 joint venture with Newmont Overseas Exploration, a subsidiary of Newmont Mining (NMC-T, NEM-N).

Lydian has two main projects in Eastern Europe: gold at Amulsar in Armenia and a zinc, lead, silver and gold project at Drazhnje in Kosovo.

The junior also has a pipeline of gold and base metal exploration projects n the Balkans and operates a 50-50 gold-copper exploration joint venture in the south Caucasus region with Newmont Overseas Exploration.

Lydian’s two largest shareholders are Newmont Mineral Holdings B. V., which is owned by Newmont Mining, and the International Finance Corp., a member of the World Bank Group.

At presstime, Lydian’s shares were trading at 40¢.

The company has a 52-week trading range of 11-65¢ and 39.98 million shares outstanding.