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Locally owned Kosovo Metals Group to assume all costs and pay Lydian CAD$ 2 million and a 3% NSR at production

TORONTO, Ontario, March 31, 2011 – Lydian International Ltd. (TSX: LYD) (“Lydian” or “the Company”), a gold-focused mineral exploration and development company, today announced that it had executed a binding Heads of Agreement (the “Agreement”) relating to its recently renewed Drazhnje lead-zinc and silver project (the “Drazhnje Project”) in Kosovo. The Drazhnje Project is Lydian’s only interest in Kosovo and is an advanced underground base metals exploration project over which several mineralized zones have been defined by drilling and underground sampling.

The terms of the Agreement provide that Lydian will transfer its licenses for the Drazhnje Project and all of its relevant in-country exploration assets to locally owned Kosovo Metals Group (KMG) and KMG will assume all ongoing costs and responsibility for future work on the Drazhnje Project. KMG also agreed to develop the property and commence commercial production at a date no later than December 31st 2014. At commercial production KMG will pay to Lydian CAD $2 million in cash and thereafter pay to it an overriding perpetual 3% net smelter royalty on all metals produced at the Drazhnje Property. Commercial production means such time as the first payment to be received by KMG, which shall be no later than 30 days after either on-site production of metal or metal concentrate or the delivery of ore from the property to any other off-site facility.

“This deal ensures further exploration and development at Drazhnje whilst allowing Lydian to focus on its growing gold asset in Armenia” said Tim Coughlin, Lydian’s President and CEO “Drazhnje will be of significant value to a small local company such as KMG and should attract the attention of any larger base-metal focused group interested in the proposed privatization of the former Yugoslav Trepça lead-zinc mining conglomerate in Kosovo”

About Lydian International

Lydian is a gold-focused mineral exploration and development company with expertise employing “first mover” strategies in emerging exploration environments. Currently Lydian is focused on Eastern Europe and on developing its flagship Amulsar gold project in Armenia. The Amulsar group of licenses is wholly owned by Lydian’s Armenian subsidiary (Geoteam CJSC). Lydian also has a pipeline of promising early-stage gold and base metal exploration projects in the Caucasus regions.

Lydian’s management team has a track record of success in grassroots discovery, in acquiring and developing undervalued assets, and in building companies. Lydian has a strong social agenda and a unique understanding of the complex social and political issues that characterize emerging environments. The Company’s significant shareholders are the International Finance Corporation (IFC), a member of the World Bank Group, Newmont Mineral Holdings B.V. (owned by Newmont Mining Corporation), and the European Bank for Reconstruction and Development (EBRD). More information can be found on Lydian’s web site at www.lydianinternational.co.uk.

FORWARD-LOOKING STATEMENTS

This news release may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as “plan,” “expect,” “project,” “intend,” “believe,” “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors described above and in the Company’s most recent annual information form under the heading “Risk Factors” which has been filed electronically by means of the Canadian Securities Administrators’ website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

For further information please contact:

Steve Smith
Investor Relations Manager
+44 (0)1534 715472+44 
(0)7829 848420
info@lydianinternational.co.uk