Operations at Armenia’s Amulsar Gold Deposit to Resume Next Year

YEREVAN — A senior executive of a Canadian-based company said on Friday that it is close to securing $150 million in additional funding needed for starting much-delayed mining operations at Armenia’s massive Amulsar gold deposit by the end of next year.

Hayk Aloyan, the executive director of the Armenian subsidiary of Lydian Canada Ventures, confirmed that the company is negotiating with several Armenian banks interested in financing the multimillion-dollar project. He said it hopes to reach an agreement with them next month.

“In order to complete [the construction phase of] the project, we will need $250 million in investments, $100 million of which will be carried out by Lydian Armenia and the remaining $150 million is due to be raised from local banks,” Aloyan told reporters.

He did not name those banks. Finance Minister Vahe Hovannisyan said earlier this week that the Armenian government is considering guaranteeing the repayment of their would-be loans.

Lydian had planned to start open-pit operations at Amulsar and annually produce 210,000 ounces of gold, worth $550 million at current international prices, there in late 2018, more than two years after obtaining the necessary licenses from the country’s former government. However, the planned operations were disrupted after several dozen environmental protesters blocked all roads leading to Amulsar following the “velvet revolution” of April-May 2018.

The protesters said that the project would wreak havoc on the environment. Lydian dismissed those claims, saying that it would use modern technology that would prevent such damage.

The government began negotiating with Lydian in an effort to help revive what would be one of the biggest ever foreign investment projects in Armenia’s history. In February 2023, it signed a relevant memorandum with Lydian and the Eurasian Development Bank (EDB) majority-owned by Russia and Kazakhstan.

Lydian was due to borrow $100 million from the EDB. Aloyan confirmed the Astana-based bank’s recent announcement that the company has withdrawn the loan application. He said it did so because the time frames for the disbursement of the EDB loan were too long.

The 2023 memorandum also envisaged that two U.S. and Canadian equity firms that currently own Lydian will give the Armenian government a 12.5 percent stake in the Amulsar project in return for its pledge to manage their risks. Aloyan and Economy Minister Gevorg Papoyan formalized the donation on Friday at a ceremony in Yerevan.

“We believe in the success of this project,” Papoyan told an ensuing news conference. He did not say whether the government now guarantees that the project will not be again disrupted by likely protests by environmental activists.

Aloyan said, for his part, that Lydian expects to resume the construction of remaining production facilities at Amulsar already in January and to launch gold mining operations there in the fourth quarter of 2025. The company will employ more than 1,000 people and pay $120 million in taxes annually, he said.

Finance Minister Hovannisyan predicted on Wednesday that the mining operation will be a major contributor to Armenia’s continued economic growth.