Lydian shares pop after Armenia’s $100m gift

Lydian is making changes to its current mine design after Armenian authorities changed regulations related to the grading of pit ramps. Lydian said at the time of the October 2014 feasibility study haul roads and pit ramps were designed to meet the then current Armenian requirements limiting 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 and will decrease the waste rock removed from the pit potentially saving the company $100 million over the life of the mine.

Apart from lowering the strip ratio from 2.8:1 to 2.5:1 and reducing haul distances according to Lydian there is 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 said in a statement that the changes should bring “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,” said Stevenson, adding that the possibility of changing from self-mining to contract mining at Amulsar is also under review.

Lydian is targeting full production next year with the aim of producing 200,000 ounces per year over a ten year mine life at Amulsar which is being built at a cost of $426 million.