Armenia will get 12.5% of Lydian Armenia shares
YEREVAN, February 22. /ARKA/. The government of Armenia, the Eurasian Development Bank (EDB) and the Lydian Armenia company signed a Memorandum of Understanding in Yerevan on Wednesday, whereby the parties express their readiness to raise a total of $250 million to develop the Amulsar gold mine in Armenia’s Vayots Dzor province.
Economy Minister Vahan Kerobyan said the Armenian government will get a 12.5 percent stake in the new company and pay nothing, but in return will provide guarantees for the deal against certain risks. The neighboring communities will be receiving $7 million annually as support from the company.
Kerobyan said that the EDB will provide a $100 million loan and another $50 million will be provided by a local bank.
Kerobyan said also that the deal is expected to boost Armenia's GDP by about 1% and generate about 30-40 billion drams of tax revenue a year, which will increase in turn the revenues from the mining sector by 20%.
Concerning environmental issues, which initially were the reason why the gold mine was not exploited, the minister noted that "everything is in conformity with the requirements of the Armenian legislation.'
Amulsar gold mine is Armenia's second–largest gold mine in terms of pure gold reserves. It is located in the southeast of the country, 13 km from Jermuk resort town, between rivers Arpa and Vorotan. The deposit contains about 31 million tons of ore and 40 tons of pure gold.
Lydian Armenia (established in 2005, a 100% subsidiary of Lydian Canada Ventures owned by the American Orion Mine Finance and Canada's Osisko Gold Royalties) has not been able to develop the Amulsar mine in full due to protests by environmentalists and residents of the neighboring communities.
They are concerned that the operation of the mine may lead to the pollution of underground waters of Jermuk and Lake Sevan, causing an environmental disaster. Protests were regularly held there in 2018-2019, then again in 2020, demanding that the operations stop.
In August 2021, the Investigative Committee of Armenia published the final expert report commissioned to Earth link & Advanced Resources Development (ELARD) in the framework of a criminal case initiated on July 20, 2018.
According to the Investigative Committee, there are no environmental threats from the operation of the mine, and the likely risks can be controlled if appropriate measures are taken. -0-
