Lydian International (TSE:LYD) is confident this year’s drill programme will reveal the secrets of deeper areas of the Amulsar deposit.
The company has now embarked upon its 2013 drill programme, which will comprise 20,000 metres of drilling. It will run until mid-November and it is expected that the first batch of results could come next month.
Crucially this work is expected to provide greater understanding of the deposit, which is currently estimated to host over 4mln ounces of gold but has yet to be fully tested at depth.
It will now use a high performance reverse circulation drill rig to drill deep holes in excess of 450 metres.
“We’re completely open at depth,” said chief executive Tim Coughlin.
“That’s the exciting thing about it. We don’t really know what’s down there. The deepest hole we’ve drilled was still in good gold grades and still in good oxidised material.
“I think we’re going to see, particularly under the Erato area, some good deep, long intersections of gold.”
As well as testing the depths, the programme will also aim to expand the boundaries of the pit along strike. And through infill drilling Lydian will also be able to upgrade existing resources into reserves.
Lydian believes the size of the Amulsar gold deposit will ultimately exceed 5mln ounces.
This year’s drilling comes amid a busy period for Lydian as it pushes towards the development of the known deposit. It is working to complete an updated feasibility study, including a new mine layout, and that is on-track for completion early in the third quarter.
There is also the matter of permitting. Lydian says the process is progressing, the Armenian authorities are well informed and fully engaged.And whilst Coughlin remained tight-lipped on precise timetable, the permitting is expected sooner rather than later.
In recent week’s delegates from the World Bank’s International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) - both of which are major shareholders in Lydian - visited the proposed mine site.
The two international investment groups are conducting a detailed review of the project as part of a due diligence process before they make decisions about project finance.
This review is being conducted in relation to the ‘Equator Principles’. This is a risk management framework which assesses the environmental and social risk in projects. It forms a minimum due diligence standard for institutions investing in major projects.
The delegates visiting the Amulsar site included specialists for environmental issues, social-development, geology, mining and finance specialists.
In recent months several representatives from other financial institutions and commercial banks have visited the site as well.
It is anticipated that project financing arrangements for the initial mine development could be put together by the second quarter of next year.
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