Lydian International Limited (TSE:LYD) has updated the 2017 feasibility study for its giant Amulsar project in Armenia, which showed an increase in mine life, reserves and recoverable gold.
Construction at the project has been suspended since June last year due to a continuous illegal blockade, and over the last 15 months Lydian has looked at a number of restart options, aided by JDS Mining & Energy, and recognized that a revamp of the 2017 technical report was needed.
The new report is based on projected changes in pre-production capital, updated pit optimization work, construction and ramp up schedule changes and other parameters.
Highlights are that total recoverable gold is put at 2.46 million ounces over a 12-year mine life, which represents an increase of 192,000 ounces compared to the 2017 report.
The reserves go up from 102.6 million tonnes to 119.3 million tonnes when including additional measured and indicated resources after the cut-off grade was lowered compared to the report two years ago.
The life of the mine is raised to 12 years from ten previously, while its all-in-sustaining costs go up to US$744 per ounce from US$514 an ounce in the previous report.
The after-tax net present value (NPV) was pegged at US$600 million and the internal rate of return (IRR) at 24.8% based on a gold price of US$1,500 per ounce and an initial capital investment of US$508 million.
The firm noted that all major infrastructural needs are readily accessible at Amulsar, including high tension power lines, a gas pipeline, on-site sources of water, and regional labor sources.
On September 9 this year, the company noted that, after a year-long investigation by the Government of Armenia's (GOA) Investigative Committee involving three separate audits, the country's prime minister Nikol Pashinyan had said access to the Amulsar project site should be restored, protesters blocking access should open the roads and there was no legal basis on which the GOA can prevent Lydian from advancing the Amulsar Project.
Edward Sellers, Lydian’s Interim president and CEO said at the time: “Lydian welcomes recognition from the Government of Armenia that there are no grounds to prevent Lydian from completing and operating the Amulsar project. Lydian is looking forward to recovering and rebuilding its ability to complete construction and operate the Amulsar Project in accordance with its environmental performance standards."
Amulsar lies in south-central Armenia roughly 115 km in a direct line to the southeast of the capital Yerevan, or a 170 km drive by paved road.
Amulsar is earmarked to be a large-scale, low-cost operation with production targeted to average around 225,000 ounces a year over an initial 10-year mine life.
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