Lydian Reports First Resource At Amulsar

Lydian International (LYD-T, LYDIF-O) has defined an inferred resource at its Amulsar property in Armenia in 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 gold cutoff 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 oz.

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 also recently announced results of a preliminary scopinglevel design study of Amulsar’s heap-leach facility, which demonstrated low capital and processing costs.

Using a 1-million-oz. resource and an ore grade of 1 gram gold with recoveries of 94%, the study showed capital costs of US$45.9 million (run-of-mine scenario) and US$102.4 million (crush-screen scenario) with process facility operating costs of US$1.55 per tonne (run of mine) and US$2.44 per tonne (crush-screen).

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 define a preliminary resource.

Lydian’s wholly owned Armenian subsidiary, Geoteam CJSC, 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 subsidiary of Newmont Mining (NMC-T, NEM-N).

Lydian holds another advanced East European project, the Drazhnje zinc, lead, silver and gold property in Kosovo.

The company 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, and the International Finance Corp., part of the World Bank Group.

On March 18, IFC’s board approved an additional equity investment in Lydian of $1.4 million at a price of 42¢ per share, bringing its interest in the company 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 $1.6-million placement from the European Bank of Reconstruction and Development.

At presstime, Lydian traded at 33¢ per share. Over the last year, it has traded in a range of 11-65¢ and the company has 39.9 million shares outstanding.