The Armulsar licence areas cover a region of high-sulphidation, epithermal-type gold mineralisation located in central Armenia and discovered by Lydian in 2006. The Armulsar project forms part of Lydian's Caucasus Joint Venture with Newmont Overseas Exploration Ltd, a wholly owned subsidiary of Newmont Mining Corporation (NYSE & ASX: NEM; TSX: NMC).

The exploration licences are held 100% by Geoteam, an Armenian registered closed joint stock company. Geoteam CJSC is held 95% by Lydian Resources Armenia (a wholly owned subsidiary of Lydian International Ltd) and 5% by a private local partner.

Soil geochemical analyses (2006 and 2007) identified an area of 3.5 by 0.5 km with a core of values exceeding 0.1 g/t gold measuring some 1 Sq km, including localised high-grade soil samples of up to 2.13 g/t gold.

More than 21% of grab rock-chip samples collected to date have returned grades of greater than 1 g/t gold. Trench samples have returned results of 128m at 1.3 g/t gold (complete trench) and channel samples have returned 20m at 9.9 g/t (highest value 23.9 g/t), 23m at 9.3 g/t (highest value 30.6 g/t), and 13m at 2.5 g/t (highest value 4.6 g/t), all at a 0.5 g/t cut-off.

Mapping has revealed that high-grade (greater than 3 g/t) gold mineralisation at Armulsar is hosted from surface in steeply dipping northeast striking fault/breccia zones and that lower-gold grades are hosted in shallow easterly dipping stratabound zones (parallel to bedding) that surround the higher grade fault/breccia zones see map.

Five scout diamond drill holes totaling 591m were drilled in 2007 and represent the very first subsurface test of the gold potential at Armulsar. All intersections at a 0.2g/t cut off are presented in Table 1.

All intersections of greater than 2m and greater than 1g/t gold, using 0.2g/t cut-off, maximum internal dilution of 6m. True width to be advised.

DDA-05 was drilled into a deep geophysical target some 1.5 km northwest of drill holes DDA-01 thru DDA-04 see map. The target was a strong IP (Induced Polarisation) resistivity anomaly at an estimated depth of some 100m. The success of DDA-05 has opened up several new targets corresponding to IP-resistors throughout the project area.

These preliminary results are indicative of a potentially large high-sulphidation epithermal system with significant upside potential (see Figure 1, click to enlarge). All gold grades were associated with oxide material which extends down to depths of some 100 vertical metres.

Lydian has signed a contract for 20,000 metres of combined reverse circulation and diamond drilling to take the project through to an NI-43101 compliant reportable resource by the end of 2008.

Armulsar Panoramas

(Click images for expanded view)