Preliminary open pit optimization study conducted on current resource, which remains open in all directions, in order to increase awareness of robust economics and focus exploration strategy at Amulsar
TORONTO, Ontario, May 16, 2011 – Lydian International Ltd. (TSX:LYD) (“Lydian” or “the Company”), a gold-focused mineral exploration and development company, today announced the results of a preliminary open pit optimization study at its 2.5 million ounce Amulsar gold project in Armenia (1.1 million ounces at 1.1g/t gold in the Indicated Category and 1.4 million ounces at 0.9g/t gold in the Inferred Category). The open pit optimization study was conducted on the Tigranes and Artavasdes areas only (which host all the current Indicated Category resources and 0.9 Moz of the current Inferred category resources) to confirm robust economics at Amulsar and guide the 2011 exploration strategy within and adjacent to the current resource shell. These results are indicative only, as the resources used in this study remain open in all directions and do not include the 0.5 Moz Inferred Category resources from the Erato area.
The open pit optimization study was undertaken by Mr. Clayton Reeves of CSA Global (UK) Ltd. A series of open pit optimization iterations were undertaken using Gemcom Whittle pit optimization software. Two resource input scenarios were utilised using the updated mineral resources released by Lydian on the 5th of April 2011;
1) Tigranes and Artavasdes Indicated Resources only and,
2) Tigranes and Artavasdes Indicated and Inferred Resources.
The Indicated only optimized open pit contains 31.0 Mt of ore at a grade of 0.98 g/t Au (0.98 Moz) resulting in 0.78 Moz of gold recovered to Dore. The Indicated plus Inferred optimized open pit contains 53.6 Mt of ore at a grade of 0.94 g/t Au (1.62 Moz) resulting in 1.3 Moz of gold recovered to Dore. The optimizations were based on a gold price of US$ 1,000 oz, a heap leach gold recovery of 80%, initial mine ore production of 5 Mt per year with a cash cost of US$370/oz, increasing to 10 Mt per year after year 3 with a cash cost of US$320/oz. Estimated strip ratios (waste:ore) are relevant for modeling purposes only as volumes assumed as waste in the open pit are potentially ore located adjacent to the current resource and yet to be included in the resource shell. A conservative overall pit slope of 40o was applied, potential starter pits were also assessed over the first 3 years of operation and resulted in higher head grades of 1.11 g/t Au for the Indicated only scenario and 1.20 g/t Au for the Indicated and Inferred scenario. See table below.
DCF figures (excluding capital expenditure) for the Indicated only pit are US$ 264 M, and for the Indicated plus Inferred pit are US$ 367 M. These are specified DCF scenarios which incorporate two push backs in the mine scheduling to optimize production. In addition the percentage of resource to reserve/potentially mineable material conversion is very favorable for both the indicated only option (75.6% of tonnes and 81.7% of gold content) and for the indicated and inferred option (63.9% of tonnes and 73.4% of gold content).
It should be emphasized that the Whittle pit shells extend only to the currently known lateral and lower extents of the current resource, that further potential exists adjacent to the current resource shell both laterally and at depth, that the open pit optimization exercise excluded the Erato area where an Inferred Resource of 0.5 Moz has been identified and that there remain large areas of upside potential elsewhere over a total area of 9km2 at Amulsar.
“The results of this preliminary open pit optimization study at Tigranes and Artavasdes are highly encouraging. The outputs that were generated will help guide our exploration and development program going forward” said Tim Coughlin, Lydian’s President and CEO “Amulsar is a growing, low cost, economically robust heap leach operation. This year’s fully-funded exploration program will include at-least 30,000 meters of combined exploration, step-out and resource conversion drilling. Drilling has already commenced on satellite targets located up to 2km away from the current resource shell and by early June a full contingent of four drill rigs will be busy across the entire project. Rigorous geologic modeling conducted earlier this year has better defined representative gold mineralized geometries at Amulsar. The new geologic model when coupled with the outputs and implications of this open pit optimization study means that our exploration team is better positioned to pin point new areas of potential both along strike and at depth where we believe high grade structures further extend”.
About Lydian International
Lydian is a gold-focused mineral exploration and development company with expertise employing “first mover” strategies in emerging exploration environments. Currently Lydian is focused on Eastern Europe and on developing its flagship Amulsar gold project in Armenia. The Amulsar group of licenses is wholly owned by Lydian’s Armenian subsidiary (Geoteam CJSC). Lydian also has a pipeline of promising early-stage gold and base metal exploration projects in the Caucasus regions.
Lydian’s management team has a track record of success in grassroots discovery, in acquiring and developing undervalued assets, and in building companies. Lydian has a strong social agenda and a unique understanding of the complex social and political issues that characterize emerging environments. The Company’s significant shareholders are the International Finance Corporation (IFC), a member of the World Bank Group, Newmont Mineral Holdings B.V. (owned by Newmont Mining Corporation), and the European Bank for Reconstruction and Development (EBRD). More information can be found on Lydian’s web site at www.lydianinternational.co.uk.
Christopher John Bargmann, FGS(C Geol), MAusIMM, Pr.Sci.Nat; is the Qualified Person overseeing Lydian's exploration programs. Mr. Bargmann has supervised the preparation of the technical information contained in this press release.
Lydian employees are instructed to follow standard operating and quality assurance procedures intended to ensure that all sampling techniques and sample results meet international reporting standards. All assay work for the released results was carried out by ALS Chemex analytical laboratory in Rosia Montana, Romania. More information can be found on Lydian’s web site at www.lydianinternational.co.uk.
This news release may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as “plan,” “expect,” “project,” “intend,” “believe,” “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors described above and in the Company’s most recent annual information form under the heading “Risk Factors” which has been filed electronically by means of the Canadian Securities Administrators’ website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
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