CEO's Message

Dear Subscriber, The tide of sentiment since our last newsletter has turned from its most bearish state, especially in the commodities sector where it appears there is some welcomed light at the end of the tunnel. There is no denial that the economic outlook remains uncertain, yet much of the forced selling has now stopped and the “early-birds” are coming back to the market looking for bargains.

With the market valuation of in-ground ounces remaining extraordinarily low, there appear to be many good investments on offer. Thus even for gold companies with potentially “World Class” assets, such as Lydian, it is still a challenge to effectively communicate and differentiate oneself, catalyse trading volume and have the share price reflect fair value .

Lydian has a great story to tell: A CIM compliant million ounces open in all directions at Amulsar, a 25-year mining license on the property, a strong joint-venture partner in Newmont and further funding and geopolitical assurance by way of the recently announced joint EBRD/IFC financing.

For much of April and May Lydian’s management and investor relations teams have been busy communicating with the market in both North America and Europe. The Company has made investor presentations in major financial centres, such as New York, London, Zurich, Geneva, Frankfurt and Paris. Building a wide and diverse shareholder base remains a key priority for 2009.

Now the field season is upon us and the focus is firmly back on the projects with drilling at Amulsar scheduled to commence this month. The aim this year is to drill for size and test the extents of the gold system. A further 15000m of drilling is planned with plenty of scope for expansion of the resource both to the north and south, as is evidenced rather compellingly by the geophysical data illustrated in the figure below.  

First results from this year’s drilling programme are eagerly expected in July. This is a pivotal year for Lydian and one worth watching!

Tim Coughlin

President/CEO

50m depth slice of IP-chargeability with location of drill holes to date and anomalous rock-chip geochemistry. Shown are extensions and targets to be tested with drilling this year

Amulsar

At Amulsar the snow has thawed and the first drill pads have been prepared. Some 15000m of combined reverse circulation and diamond drilling are planned for the season with the aim being to close off the extents of the gold mineralised system and reveal the true size potential. Drill rigs and equipment are currently arriving in Armenia and drilling is expected to start this month with first results due in July.  

                                Drill pad preparation in Central Amulsar (photo May 21, 2009)

Drazhnje

At Drazhnje underground redevelopment work has been suspended whilst mapping and sampling is conducted, a 3D geometry is developed and a CIM compliant resource estimation is calculated. An in-house mini-scoping study, applying local cost parameters and assuming a toll-treatment scenario, will also be conducted.

Project Pipeline

Grassroots exploration is continuing in Armenia only as part of the Newmont Joint Venture. Regional reconnaissance work and drainage sampling has identified areas of further gold potential and a new license application has been submitted.   

About Lydian

Lydian (TSX:LYD) is a diversified UK mineral exploration and development company, with expertise employing "first mover" strategies in international emerging environments. The Company is currently focused on Eastern Europe, exploring the Balkan and Caucasus regions, and is developing advanced precious and base metal assets located in Armenia and in Kosovo. Lydian's joint venture partner is Newmont. Web Site is: www.lydianinternational.co.uk

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