Lydian International (TSE:LYD) is deferring a US$5 million payment owed to Newmont Mining in a move to strengthen its cash position and thus ensure it is fully funded for the immediate next stage of developing its Amulsar gold project in Armenia.
Lydian took full control of Amulsar by buying out its joint venture partner Newmont, and the payment in question was initially scheduled to be made on December 11 2011.
It has now notified Newmont that, in line with the purchase agreement between the parties from February 2010, Lydian is deferring the payment by a year until December 31 2012, and the sum will bear an annual interest of 10 percent until paid.
President and chief executive Tim Coughlin said: "Our decision to defer making this payment strengthens the company's cash position and ensures that the company has sufficient funds to meet all of its budgeted operational needs for a period extending beyond April 2012 when delivery of a bankable feasibility study for Amulsar is expected.
Lydian took full control of Amulsar by buying out its joint venture partner Newmont, and the payment in question was initially scheduled to be made on December 11 2011.
It has now notified Newmont that, in line with the purchase agreement between the parties from February 2010, Lydian is deferring the payment by a year until December 31 2012, and the sum will bear an annual interest of 10 percent until paid.
President and chief executive Tim Coughlin said: "Our decision to defer making this payment strengthens the company's cash position and ensures that the company has sufficient funds to meet all of its budgeted operational needs for a period extending beyond April 2012 when delivery of a bankable feasibility study for Amulsar is expected.
"This decision gives us added flexibility to properly assess our production financing options for the Amulsar project and continue our progress toward planned production," he added.
The Amulsar project has a total gold resource of 2.5 million ounces which is open in all directions. Lydian hopes to increase that beyond 3 million ounces with the latest drill programme.
The company plans to mine from one open pit from the Tigranes and Artavasdes areas of the project, as well as a separate open pit for Erato in the north. The costs are expected to be comfortably mid-curve at US$419 an ounce to around US$499 – which means the economics are fairly robust.
The preliminary feasibility study said the company could mine Amulsar for seven years, starting initially at 123,000 ounces a year and ramping up to 256,000.
However that was based on mineable material of around 1.64 million ounces.
The Amulsar project has a total gold resource of 2.5 million ounces which is open in all directions. Lydian hopes to increase that beyond 3 million ounces with the latest drill programme.
The company plans to mine from one open pit from the Tigranes and Artavasdes areas of the project, as well as a separate open pit for Erato in the north. The costs are expected to be comfortably mid-curve at US$419 an ounce to around US$499 – which means the economics are fairly robust.
The preliminary feasibility study said the company could mine Amulsar for seven years, starting initially at 123,000 ounces a year and ramping up to 256,000.
However that was based on mineable material of around 1.64 million ounces.
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