Lydian Canada Ventures, a Canadian-based company, is on the brink of securing a crucial $150 million in additional funding to resume operations at Armenia’s Amulsar gold deposit by the end of 2025, according to a senior company executive.
Hayk Aloyan, executive director of Lydian’s Armenian subsidiary, confirmed on last Friday that the company is in advanced negotiations with several local banks to finance the long-awaited project. He expressed optimism that an agreement could be reached as early as this month.
To complete the construction phase of the Amulsar project, Lydian estimates it will need a total of $250 million in investments. Of that sum, $100 million will be provided by Lydian Armenia, with the remaining $150 million set to come from local banking institutions.
While Aloyan did not disclose the identities of the involved banks, Armenia’s Finance Minister, Vahe Hovannisyan, revealed earlier last week that the government is considering offering guarantees to back the prospective loans.
The Amulsar project, which has faced significant delays, was originally slated to begin open-pit mining operations in late 2018. The plan was to produce an estimated 210,000 ounces of gold annually, worth approximately $550 million at current market prices. However, the project’s progress has been stalled for several years, primarily due to environmental protests that erupted after Armenia’s 2018 “velvet revolution.”
Protesters have raised concerns about the potential environmental impact of the mining operations, blocking access to the site. Lydian, however, has dismissed these claims, arguing that the use of modern technology would mitigate any environmental risks.
In response to the delays, the Armenian government has actively engaged with Lydian in an attempt to revive the project, which is seen as one of the largest foreign investment initiatives in the country’s history. In February 2023, the government signed a memorandum of understanding with Lydian and the Eurasian Development Bank (EDB), which is majority-owned by Russia and Kazakhstan, to facilitate the project’s financing. Lydian had planned to borrow $100 million from the EDB, but Aloyan recently confirmed that the company had withdrawn its loan application, citing concerns over the lengthy disbursement process.
The 2023 memorandum also outlined a plan for U.S. and Canadian equity firms, which currently own Lydian, to grant the Armenian government a 12.5 percent stake in the Amulsar project. This would be in exchange for the government’s commitment to manage the project’s risks. On Friday, Aloyan and Armenia’s Economy Minister, Gevorg Papoyan, formalized the agreement in a ceremony in Yerevan.
Minister Papoyan expressed strong confidence in the project’s success, although he did not address whether the government would ensure protection against potential disruptions by environmental activists.
Aloyan stated that Lydian aims to restart construction of the remaining production facilities at Amulsar in this month, with gold mining operations set to begin in the fourth quarter of the same year. Once operational, the project is expected to create over 1,000 jobs and generate approximately $120 million in annual tax revenues.
Finance Minister Hovannisyan expressed optimism earlier this week, predicting that the mining operation would play a significant role in driving Armenia’s ongoing economic growth.
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