TORONTO, Ontario, April 9, 2015 – Lydian International Limited (TSX:LYD) (“Lydian” or “the Company”) is pleased to announce that it plans to make changes to its current mine design at its 100% owned Amulsar Gold Project, in order to take advantage of recent legislative changes in the Republic of Armenia. The Company has engaged AMC consultants (UK) Limited (“AMC”) to update the relevant portions of the Company’s feasibility study entitled, “2014 Amulsar NI 43-101 Feasibility Study”, dated October 22, 2014 and prepared by SGS E&S Engineering Solutions Inc. (the “2014 Technical Report”). The update is to reflect anticipated revised and improved project economics, including a possible significant reduction in operating costs of up to $100 million over the life of mine that is expected to result from these changes.
For the purposes of the feasibility study set out in the 2014 Technical Report, AMC designed haul roads and pit ramps consistent with the then current Armenian legislation requirements, which limited mine ramp gradients to a maximum of 7%. Under the newly enacted regulations in Armenia, the maximum allowable ramp gradient for haul roads has been increased to 10%. This change will not affect the safety of mining operations. Moreover, reducing pit sizes will result in a decrease of barren rock volumes mined, reducing the associated environmental impact of planned production at Amulsar.
As a result of this legislative change, Lydian has engaged AMC to redesign the open pits at Amulsar mine based on design parameters that contemplate an increase of the maximum permitted haul road gradient from 7% to 10%. This work is in process, however, AMC has prepared a conceptual level estimate on the effect of the change in ramp gradient on the Mineral Reserve and mining costs of the project. The Company expects the proposed changes in ramp gradients will have the following key effects on the 2014 Technical Report over the life of mine:
- Reduced mining operating costs by approximately $100 million, which includes the effects of lowering the strip ratio (waste to ore) from 2.8:1 to 2.5:1 and reducing haul distances;
- The potential for a minor increase in ore mined and recoverable gold ounces through deepening of the pits; and
- A possible minor reduction in the total mine fleet requirement.
Howard Stevenson, Lydian’s President and CEO stated, “This legislative change is very positive for Armenia’s mining sector and consistent with good international mining practice. For Lydian, we expect favourable improvements in several areas of mining operations and environmental impact. We anticipate reduced mining of waste rock by up to 30 million tonnes, more than a 10% decrease. While more work is required, based on work completed to date, management estimates that this could lower total cash costs to about $600 per ounce of gold produced, while decreasing the environmental impact of our operations.”
Mr. Stevenson added, “We are also hopeful to demonstrate additional economic improvements from our ongoing value engineering program and review of potential construction packages. Our value engineering focus has been on reducing capital costs without adversely affecting operating costs. The possibility of moving from self-mining to contract mining is also under review.”
The technical information in this release has been reviewed and approved by Mr. Martin Staples, FAusIMM, FIMMM of AMC Consultants (UK) Limited, a consultant to the Company and a qualified person for the purpose of NI 43-101. A Technical Report to be prepared in accordance with NI 43-101 will be filed on SEDAR within 45 days of this news release.
About Lydian International
Lydian is an emerging gold developer, focused on its 100% owned Amulsar Gold Project, located in Southern Armenia. The Company’s current mine development and construction plan for Amulsar is aimed at achieving average production of 200,000 ounces of gold per year and establishing the Company as a high cash-flow producer. The Company is committed to best practices in all aspects of its operations including production, sustainability, and good corporate citizenry. For more information on Lydian please visit www.lydianinternational.co.uk.
Caution regarding forward-looking information
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. All statements, other than statements of historical fact, included herein, including statements with respect to the ability of the Company to optimize and/or enhance the base case as set out in the 2014 Technical Report for the Amulsar Gold Project, including with respect to operating costs and capital costs, the ability of the Company to potentially include the results of the mine redesign and value engineering processes in a new or updated feasibility study or any future financial analysis of the Amulsar Gold Project, the ability of the Company to carry forward and incorporate into future studies of the Amulsar Gold Project the mine design, work that will evaluate and optimize the project configuration and operating costs and capital costs, the potential development of any mine at the Amulsar Gold Project, business and financing plans and business trends are forward-looking statements. Information concerning mineral reserve/resource estimates and the economic analysis thereof contained in the feasibility study also may be deemed to be forward-looking statements in that it reflects a prediction of the mineralization that would be encountered, and the results of mining it, if a mineral deposit were developed and mined. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. 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, mine site planning and development, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices, permitting and licensing 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.
Cautionary Note concerning estimates of Measured, Indicated and Inferred Mineral Resources
This news release uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with National Instrument 43-101 (“NI 43-101”). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes Canadian standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission (“SEC”), and mineral resource information contained herein may not be comparable to similar information disclosed by United States companies. This news release uses the terms “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” to comply with reporting standards in Canada. We advise United States investors that while such terms are recognized and required by Canadian regulations, the SEC does not recognize them. United States investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into mineral reserves under SEC definitions. These terms have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. Therefore, United States investors are also cautioned not to assume that all or any part of the “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” exist. In accordance with Canadian rules, estimates of “inferred mineral resources” cannot form the basis of pre-feasibility or other economic studies. It cannot be assumed that all or any part of the “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” will ever be upgraded to a higher category.
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