Amulsar Project Lydian Resource and Reserves Final

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AMULSAR GOLD PROJECT

ARMENIA
TECHNICAL REPORT MINERAL RESOURCE UPDATE AND RESERVE ESTIMATE UPDATE

for
Lydian International Limited
TSX: LYD
Prepared by
G. David Keller, P. Geo.: AMC Consultants (UK) Limited
Gary Patrick, MAusIMM CP (Met): Metallurg Pty Ltd.
Herb Welhener, MMSA-QPM: Independent Mining Consultants, Inc
Richard E. Kiel, P.E.: Golder Associates Inc.
Peter R. Lemke, P.E.: Golder Associates Inc
John Maxwell Eyre, CEnv: North Coast Consulting Limited
Joseph M. Keane, P.E.: SGS-KD Engineering
In accordance with the Requirements
of National Instrument 43-101,
Standards of Disclosure for Mineral Project
of the Canadian Securities Administrators
AMC 412042
Effective Dates of Report:

Mineral Resources - 18 April 2013
Mineral Reserves - 28 November 2012
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LYDIAN INTERNATIONAL LIMITED

Amulsar Gold Project
DATE AND SIGNATURE PAGE

This report has been prepared and signed for by the following Qualified Persons (within the
meaning of National Instrument 43-101). The effective dates for this report are 18 April 2013
for the resource estimate and 28 November 2012 for the reserve estimate.
Signed the 21 April 2013
G David Keller, P.Geo.

Principal Geologist
Gary Patrick, MAusIMM CP (Met)

Metallurg Pty Ltd.
Herb Welhener, MMSA-QPM

Independent Mining Consultants, Inc
Richard E. Kiel, P.E.

Golder Associates Inc.
Peter R. Lemke, P.E.

Golder Associates Inc
John Maxwell Eyre, CEnv

North Coast Consulting Limited
Joseph M. Keane, PE
SGS-KD Engineering
12042 Amulsar Project Lydian Resource and Reserves Final - May 2013
ii

SUMMARY
Introduction
This technical report for the Amulsar gold project, in the south-central region of Armenia
has been prepared by AMC Consultants (UK) Limited (AMC) of Maidenhead, UK, for
Lydian International Limited (Lydian). The report has been prepared in accordance with
requirements of National Instrument 43-101 (NI 43-101), Standards of Disclosure for
Mineral Projects, of the Canadian Securities Administrators (CSA) for lodgement on the
CSAs System for Electronic Document Analysis and Retrieval (SEDAR). This report is
required to support an update of the estimation of mineral resources for the Amulsar
Gold Project, as announced by Lydian in a press release issued 5 March 2013. The
effective dates of this report are 18 April 2013 for the mineral resource estimate and 28
November 2012 for the mineral reserve estimate. Revised mineral reserves based on
the current mineral resources are being developed. The mineral reserve estimates
stated in this report represent those derived from a previous mineral resource estimates,
effective date 28 November 2012.
From 2008 to December 2012, Lydian drilled 383 reverse circulation and 507 diamond
core drillholes, totalling 110,561 metres of drilling, and chip sampled 358 lines for 1,337
metres of sampling, on the Amulsar gold project. This has allowed the delineation of
major lithological units and structures that were used to model mineralization and
estimate mineral resources for the project.
The Amulsar gold project is located in south-central Armenia approximately 115 Km
south-west of the capital Yerevan and covers an area of approximately 98 square Km.
The property is covered by three Prospecting Permissions. A mining licence covers the
Amulsar area. Core shed facilities, sample processing, and offices for the project are
located in the nearby town of Gorayk near the southern boundary of the project area.
Exploration and mining licences for the Amulsar project comprise the Saravan and
Gorayk and Khatchkar Prospecting Permissions. A new mining licence granted for the
project, that is valid until 2034 and permits extensions to the licence as new resources,
has been approved. All prospecting permits and mining licences are held 100% by
Geoteam CJSC, an Armenian registered Closed Joint Stock Company. Geoteam is
owned 100% by Lydian Resources Armenia, a wholly-owned subsidiary of Lydian
International Limited.
The Amulsar region was initially identified by the Armenian Soviet Expedition in
19361937 as an area of secondary quartzite which was deemed to host potential as a
silica resource. Research work by the Soviet Expedition continued at Amulsar during the
period 1979 to 1982. Silica reserves at Amulsar were never entered onto the Republic of
Armenia State Balance, and no further exploration or research work has been
conducted by the Soviet Expedition in the area since 1982.
Geology and Mineralization
The Amulsar gold deposit is situated in south-central Armenia and is hosted in Upper
Eocene to Lower Oligocene calc-alkaline magmatic-arc system that extends north-west
through southern Georgia, into Turkey, and south-east into the Alborz-Arc of Iran.
iii

Volcanic and volcano-sedimentary rocks of this system comprise a mixed marine and
terrigenous sequence that developed as a near-shore continental arc between the
southern margin of the Eurasian Plate, and the northern limit of the Neo-Tethyan Ocean.
The Neo-Tethyan Ocean closed and subduction ceased along this margin in the Early
Oligocene when a fragment of continental crust was accreted with the Eurasian plate.
The Amulsar deposit is hosted in a sequence of Eocene-Oligocene volcanogenic rocks
of basaltic to dacitic composition, containing two distinct volcano-sedimentary cycles.
The Lower Volcanic unit (LV) is dominated by massive porphyritic andesite. The unit
also contains abundant coarse volcaniclastic members in some project areas. The
Upper Volcanic unit (UV) is characterized by coarse volcaniclastic breccia occurring
within debris flow channels, incised into a thick package of finer grained volcanogenic
rocks, including immature feldspathic sandstone. Andesitic lava flows form a minor
component and also appear to occur in erosional channels. The UV unit lies
disconformably over the LV unit.
Pervasive host fracturing has been produced during an interval of both east- and westdirected thrusting, producing a broad mild antiformal fold across Amulsar project area.
The abundance of host fracturing is likely controlled by the differential strength increase
produced by the focusing of pre-mineralization silica-alunite alteration into the porous
breccia units. Mineralization is focused within a local zone of highly complex deformation
near the crest of the antiform. At least two intervals of post-mineralization extensional
faulting dissect the antiformal structure, such that the original ore system is now
preserved within large discrete north-easttrending grabens that cross the antiform.
These larger structures have been disrupted by north-westtrending extensional faults.
Gold mineralization at Amulsar is thought to have been a late event in the development
of the deposit, occurring dominantly within the silica-alunite altered volcano-sedimentary
breccia units of the UV unit. Mineralization is also associated with iron oxide-coated
fracture surfaces and heavily oxidized faults that cut the silica-alunite alteration. Gold
mineralization is believed to be associated with iron oxide coatings, fillings and hydraulic
breccias in late stage brittle fractures, and faults within a thrust and fold complex.
Silver mineralization is present at the Amulsar project, but the genesis and distribution of
is not well understood. Silver mineralization does not correlate with gold mineralization.
Average silver grades range from 2 g/t to 5 g/t and locally can occur in the 100 g/t to
200 g/t range.
iv

Exploration and Data Management

Exploration on the Amulsar project was initiated with a joint venture between Lydian and
Newmont Mining Inc. in the period from 2008 to 2010. Newmont completed
approximately 150 line Km of ground magnetic surveys, and 54.6 line Km of induced
polarization and resistivity surveys during the joint venture period.
After the project was acquired by Lydian in 2010, all exploration activity was managed
by Geoteam CJSCa wholly-owned subsidiary of Lydian.
Geoteam has completed an extensive programme of surface geological mapping over
the project. In conjunction with the surface mapping programme Geoteam has collected
approximately 358 (1,337 m) surface channel samples and 171 (50 m) trench samples.
Channels samples are cut from outcrop faces cleared of vegetation, talus and loose
rock. The average length of channel samples is about 2 metres, with approximately 99%
of samples less than 3 metres in length.
In early 2012, Lydian commissioned a structural geological study of the deposit by
Dr Rod J. Holcombe and associates to review drill core and reverse circulation chips,
surface geological and structural mapping, and to assess drillhole structural data. A
three-dimensional conceptual model of the deposit was generated, based on re-logging
data and the integration of surface mapping and drillhole data, and has resulted in a
major revision of the geological understanding of the deposit.
Exploration under the Newmont joint venture comprised diamond core drilling, reverse
circulation drilling and geophysical surveys completed from 2008 to early 2010. During
this period exploration drilling was carried out in the Erato and Artavasdes-ArshakTigranes areas. A total of 31 diamond core (4,363 m) and 175 reverse circulation holes
(22,809 m) were completed.
All exploration activity on the Amulsar project is managed through Geoteam, Lydians
subsidiary in Armenia. From 2010 onwards Geoteam has conducted an aggressive
programme of core and reverse circulation exploration drilling over the Artavasdes,
Arshak, Tigranes and Erato areas, completing a total of 218 core and 317 reverse
circulation drillholes for total of drilled lengths of 33,422 m and 45,476 metres
respectively.
Geoteam exploration personnel follow procedures outlined in a comprehensive manual
for diamond drilling. Diamond drilling operations are supervised by Geoteam geologists
at the drilling site. Diamond drillholes are drilled with a number of core sizes, including
PQ, HQ, and NQ. Core is logged by Geoteam geologists at the drill site. At the end of
each shift, core boxes are delivered to secure core shed facilities at Gorayk. Diamond
drilling core recovery averages 96% for the project.
Similarly, for reverse circulation drilling, Geoteam exploration personnel follow
procedures outlined in a comprehensive manual. All reverse circulation drilling is
conducted under constant supervision by the rig geologist. Reverse circulation drilling is
undertaken using downhole hammers with face-sampling drill bits. All drilling chips are
collected from the reverse circulation cyclone. The entire chip sample is delivered to the
core shed facilities in Gorayk for splitting and sampling.

Specific gravity measurements were made by Geoteam at the project core shed, located
in the town of Gorayk. Measurements were restricted to diamond core samples only,
using a wax-sealed core water-immersion method.
Lydian has a sample preparation facility which is adjacent to core shed facilities at
Gorayk. The facility includes two jaw crushers, two rotary splitters, two high-capacity
pulverizers, and two drying ovens. Sample preparation facilities at Gorayk operated from
September 2008 to 2010, and then were restarted in late 2011. Prior to establishing this
facility, and during the period between 2010 and late 2011, all samples were sent to ALS
Romania SRL laboratories in Rosia Montana for sample preparation. New containerized
sample preparation facilities provided by ALS Chemex were installed in late 2011. The
Gorayk laboratory is owned and operated by Geoteam.
Geoteam performs routine checks on laboratory submissions, upon import to the
drillhole management Century Systems, Fusion database. On an ongoing basis QA/QC
data is analysed using Fusion plots for standard, scatter, and quantilequantile plots.
Failures in quality-control data are identified by Geoteam database managers and
discussed with field geological personnel. Critical failures result in the resubmission of
assay batches, or ten samples that precede the failed sample.
Lydian provided assay quality-control data for gold and silver assays for the Amulsar
project, which AMC reviewed using scatter plots; HRD, HARD, ranked HARD, and
quantilequantile plots to evaluate field duplicates, pulp duplicates, and umpire samples.
Blank and certified reference material data were plotted on time-series plots using two
standard deviations as data limits for reference material plots.
Based on the data provided, AMC concludes that assay analytical results for the
Amulsar project are appropriate for the estimation of mineral resources.
AMC also completed a check of database assay values with assay certificates supplied
by Lydian, and a separate check with assay certificates sent directly from the assay
laboratories to AMC. AMC randomly selected assay values for validation. Approximately
10% of the gold and silver assays were checked with assay certificates supplied by
Lydian, and 2% of gold and silver assays were checked with assay certificates from the
analytical laboratories. No errors were found. AMC concludes that the Amulsar project
assay drillhole data provided by Lydian is appropriate for the estimation of mineral
resources.
Metallurgical Testing
Extensive testwork has been carried out on representative samples from the three main
deposits; Tigranes, Artavasdes and Erato. Testwork has been carried out on bulk
samples from rock outcrops, as well as half and whole core samples. Tests have
included fine and coarse bottle roll leach tests, as well as column leach tests.
To date, a total of 46 column leach tests have been completed by various laboratories.
The column leach tests show that the leach kinetics are very rapid, and that high gold
leach recoveries can be obtained.
vi

Mineral Resource Estimate

The resource database used to evaluate the mineral resources for the Amulsar project
was provided as MSExcel spreadsheet exports from Lydians Fusion database system.
These spreadsheets contained all information for diamond core and reverse circulation
drillholes, and chip samples for the project. The database consists of 1,154 drillholes
and channel samples collected in exploration work undertaken between 2007 and 2012.
The data comprises 298 diamond drillholes (40,017 m), 498 reverse circulation drillholes
(69,380 m), and 358 channel samples (1,337 m). Drilling and chip sampling were carried
out in the Tigranes, Artavasdes, Arshak and Erato areas of the Amulsar project.
The geological history of the Amulsar deposit has resulted in a complex of structurally
positioned blocks of upper and lower volcanic rock units. Mineralization is predominantly
confined to rocks of Upper Volcanic unit (UV). Mineralization in the Lower Volcanic unit
(LV) are generally not mineralized, except near contacts with mineralized UV rocks or
related mineralized structures.
The UV unit was subdivided into two, comprising the Erato sub unit to the north, and the
Artavasdes-Arshak-Tigranes (AAT) sub unit to the south. The two units are structurally
distinct, with the Erato unit having a slightly lower tenor of gold mineralization.
Rocks of the LV unit were assumed to occur in all areas outside of the Upper Volcanic
and colluvium wireframes. The extent of the lower volcanic unit was modelled by AMC
based on the extent of drilling over the Amulsar project. Exploration targets outside of
the Erato and AAT areas were excluded.
The drillholes and chip sample database used for estimation of resources consists of
91,830 gold and silver assays, and 1,148 specific gravity measurements. AMC
determined that the most appropriate method of representing specific gravity is to
average the specific gravity values for each main unit modelled.
Drillholes for each of the four zones, Erato and AAT, Upper Volcanic, and Lower
Volcanic units were composited to 1 metre to provide common support for statistical
analysis and estimation for gold and silver data. Approximately 93% of assay samples
were sampled at 1 metre intervals or less.
Based on statistical analysis of the Erato and AAT composites, it was found that a
combined dataset of UV and LV units for each Erato and AAT zones provided more
stable datasets for indicator variography, and Gaussian transform of gold composite
data. These combined datasets were used for variography and the estimation of grades
for the UV model only. The LV unit is estimated using composites from only the LV unit.
Conditional statistics were generated for the Erato and AAT zones using combined UV
and LV gold composites, and used to determine intra-class mean grades to be used for
post-processing of model panel grade estimates. Eleven thresholds were selected for
each of the two UV zones, as they were considered sufficient to discretize both the
sample and metal values.
A suite of experimental gold variograms were generated and modelled for the Erato and
AAT subzone declustered composites (using combined UV and LV data). Variograms
vii

were generated for both gold and indicator thresholds. Traditional semi-variograms were
used as the spatial model for Erato and AAT zones. Gold indicator variograms were
used to estimate gold grades, while gold variograms were used to derive change-ofsupport correction factors. Omni-directional variograms or variograms that model major
and semi-major axes are considered the most appropriate for estimating the UV units.
Gold grades were estimated using a multiple indicator kriging (MIK) estimator, using 1 m
gold composites for each of the Erato and AAT UV zones. As the combined LV and UV
composite set of grades for each of the Erato and AAT zones is more statistically stable,
these were used to estimate gold into each of the Erato and AAT models. A panel model
with the dimensions of 20 m E 20 m N 10 m elevation was used for the each UV
zone MIK estimates. In preparation for ranking of localized estimates, gold grades were
estimated by OK into a target SMU model with the dimensions 10 m N 10 m E 5 m
elevation. These estimates also utilized the combined (LV and UV) composites for Erato
and AAT zones.
Gold grades were estimated in three estimation runs using progressively larger search
ellipsoid ranges for the Erato and AAT zones. The search ellipsoid for the Erato zone
was inclined at 10 to the north to reflect a dip trend observed in mineralization. No
similar trends were observed in the AAT zone.
A change-of-support adjustment was applied in order to produce resource estimates that
reflect the anticipated level of mining selectivity. When estimating local recoverable
resources, the objective is to obtain the proportion of mineralization above a particular
cut-off grade (pseudo tonnage), within panels that are large enough to achieve a robust
estimation.
A localized MIK (LMIK) SMU model was generated using the MIK SMU-corrected
histogram, and partitioning the estimated tonnage and metal from the MIK panel model
evenly into SMU blocks within the panel. In this manner, grades are mapped into each
of the SMU-sized blocks, thereby replicating the targeted mining selectivity. Ranking of
the SMU-sized blocks within a panel is based on SMU grades estimated by ordinary
kriging (OK).
Gold grades were estimated by OK for the Lower Volcanic unit using only LV
composites. No distinction was made between Erato and AAT areas for these estimates.
Three estimation runs were completed using progressively expanded ellipsoid search
ranges.
Silver grades were estimated for the Upper and Lower Volcanic units using silver
composites separately for each zone. Capped composites for the Erato UV zone are
used to for estimation of silver grades in the Erato UV model. Uncapped composites are
used to for estimation of silver grades in the AAT UV model. Capped composites are
used for estimation of silver grades in the LV model no distinction is made between
Erato and AAT areas for these estimates. Three estimation runs were completed using
progressively expanded ellipsoid search ranges. Silver grades were estimated using an
OK estimator.
Specific gravity values were assigned to each estimated model on the basis of the
average specific gravity measurements in each of the estimated models.
viii

The Mineral Resources have been estimated using the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves,
Definitions and Guidelines prepared by the CIM Standing Committee on Reserve
Definitions and adopted by CIM Council, and procedures for classifying the reported
resources were undertaken within the context of the Canadian Securities Administrators
National Instrument 43-101 (NI 43-101).
Estimated resources have been classified with consideration of the following criteria:
Quality and reliability of raw data (sampling, assaying, surveying).
Confidence in the geological interpretation.
Number, spacing, and orientation of intercepts through mineralized zones.
Knowledge of grade continuities gained from observations and geostatistical

analyses.
The likelihood of material meeting economic mining constraints over a range of

reasonable future scenarios, and expectations of relatively low selectivity of
mining.
Gold mineralization at the Amulsar deposit is characterized by short-range continuities,

particularly if considering grades above potentially economic cut-offs. It is, therefore,
important to identify low-confidence areas which have been estimated by one or two
drillholes in an isolated area, regions at depth where estimates are highly influenced by
a single drillhole, or regions that have been estimated at longer distances from any
drillholes. AMC does not consider these areas as resources, and therefore, using the
boundary between the UV second and third estimation runs as a guide, AMC developed
a wireframe which constrained the extent of reportable estimated resources. The
boundary also excluded blocks estimated by isolated drillholes, or blocks estimated by
drillholes that are significantly isolated from other drillholes at depth. This wireframe was
applied to the final block model containing UV and LV estimates, and all blocks below
this boundary were removed from the model as unclassified material.
Indicated resources were classified on the basis of a wireframe enclosing drilling that
was closely spaced (approximately 45 m), and included holes drilled vertically and at
inclined angles, demonstrating vertical and horizontal continuity. The wireframe outline
was drawn to enclose a continuous zone of mineralization, and relatively high number of
composites used to make each block estimate.
Resources classified as Measured were contained within the Indicated wireframe, but
where block grades are estimated by 50 or more composites. The Measured
classification encompassed only blocks in the Upper Volcanic unit.
Resources classified as Inferred comprise all remaining blocks not classified as
Measured or Indicated. The likelihood of the resource being potentially economic was
tested by generating an optimized pit shell around the classified resources using:
Pit slope angle of 45 degrees
Gold price assumption of $1,200 per troy ounce of gold.
ix

Mineral Resources for the Amulsar project have been estimated in conformity with
generally accepted CIM Estimation of Mineral Resource and Mineral Reserves Best
Practices guidelines and are classified according to the CIM Standards on Mineral
Resources and Reserves: Definition and Guidelines (December, 2005). At a cut-off
grade of 0.35 g/t gold, the Mineral Resources are estimated at 52.4 Mt at 1.05 g/t Au
(1.77 million ounces) of Measured category, 18.1 Mt at 1.02 g/t Au (0.59 million ounces)
of Indicated category, and 58.0 Mt at 0.93 g/t Au (1.73 million ounces) of Inferred
category resources.
Table 1.1 Mineral Resource Statement for the Amulsar Project, Armenia, AMC
Consultants (UK) Limited, 5 March, 2013
Quantity (tonnes)
Gold
Grade (g/t)
Silver
Grade (g/t)
Contained
Gold (toz)
Contained
Silver (toz)
Measured
52,400,000
1.05
4.19
1,769,000
7,059,000
Indicated
18,100,000
1.02
3.25
593,000
1,888,000
Inferred
58,000,000
0.93
2.87
1,734,000
5,351,000
Total Measured and

Indicated
70,500,000
1.05
3.95
2,379,000
8,949,000
Total Inferred
58,000,000
0.93
2.87
1,734,000
5,351,000
Classification
1.
2.
3.
4.
5.
The effective date of the Mineral Resource Statement is 5 March 2013.

A cut-off grade of 0.35 g/t gold for this project based on gold price of US$1,200 per troy ounce of gold and assuming
an open-pit mining scenario.
Figures have been rounded to the appropriate level of precision for the reporting of Indicated and Inferred Resources
in the upper and lower volcanic units.
Due to rounding, some columns or rows may not compute exactly as shown.
Mineral Resources in this resource statement are not Mineral Reserves do not have demonstrated economic viability.
The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues. Mineral Reserves have been previously reported for this project
using a prior Mineral Resource statement
Mineral Reserves
A mineral reserve estimate for the Amulsar project was developed from the results of the
2012 feasibility study for the project using a concurrent mineral resources and mineral
reserves estimate authored by Herb Welhener MMSA-QPM of Independent Mining
Consultants, Inc. The reported mineral resources and reserves were contained in a by
the Amulsar Resource update and Heap Leach Feasibility Study completed by K D
Engineering for Lydian. The report for the study was dated 3 September 2012 and
amended 28 November 2012. The mineral reserve will be revised for Mineral Resources
reported on 5 March 2012 as part of a feasibility study currently underway and due for
completion in August 2013.
As a basis for the mineral reserve evaluation, a floating cone algorithm (independently
verified by Whittle optimizations) was used to determine the final pit design and internal
phase designs. The final pit design is based on the shell generated by the US$ 900/oz
floating cone run, selected as a result of the evaluation of the discounted net value at
US$ 1200/oz gold and US$ 20/oz silver prices for a suite of cone geometries run from
$400/oz to $1200/oz gold. The cones above US$ 900/oz. showed no increase in
contained value for the additional material mined. This is also a function of the
estimation being data limited, as the cone at US$ 900/oz captures ore up to where

drilling is limited and insufficient drill data exists to classify material as either measured
or indicated. The Mineral Reserves for 3 September 2012 are presented in Table 1.2.
Table 1.2 Mineral Reserves* Represent the Diluted Ore Scheduled to the Crusher,
3 September 2012
Category
Proven
Ore kt
Contained
Recoverable
Gold g/t Silver g/t Gold g/t Silver g/t
Contained
Gold oz
Silver oz
Recoverable
Gold oz
Silver oz
51,143
0.801
3.37
0.713
1.31
1,317,000
5,541,000
1,172,000
2,154,000
Probable 43,751
0.692
3.15
0.609
1.08
973,000
4,435,000
857,000
1,526,000
Proven+
Probable
0.750
3.27
0.665
1.21
2,290,000
9,976,000
2,029,000
3,680,000
94,894
*Mineral Reserves in this table rely on Mineral Resources reported on 3 September 2012. Reserves for the current
Mineral Resources reported 5 March 2013 are currently in progress.
Mining
This section has not been revised to reflect work or studies that had been completed at
the time of the Mineral Resources reported on 5 March 2012. This section will be
updated as part of a feasibility study currently underway and due for completion in
August 2013.
Mining of the Amulsar deposit is planned to be accomplished with conventional open pit
mining methods. Over 12 years, 7 phases covering the Artavasdes, Tigranes and Erato
ore bodies are sequenced to arrive at an ultimate pit geometry containing the projects
reserve. Mineralization extends to the surface in the Tigranes ore body where initial
mining begins; as a result, minimal pre-stripping of 729,000 tonnes is required to have
adequate ore feed to the crusher. Artavasdes and Tigranes areas are mined ahead of
the Erato area which requires more waste stripping to expose the ore.
During the initial 3 years of mining, ore is scheduled from the pit as direct feed to the
crusher at a rate of 5 million tonnes of ore per year. In Year 3, crusher capacity is
doubled with a crusher expansion and 10 million tonnes of ore per year are sent to the
crusher starting in Year 4. The average stripping ratio in the first 3 years of mining is
1.8:1 waste:ore. Beginning in Year 4, the stripping ratio increases to 2.35:1 and
continues at that ratio to Year 10.
A small low grade stockpile is generated near the crusher in Year 2 of mining. This is
scheduled to be fed to the crusher in Years 10 and 12 of the mine life. The low grade
stockpile contains 655 ktonnes of ore which amounts to a little over 3 weeks of ore at a
crushing rate of 10 million tonnes per year.
During the first 8 years of mine life, waste is hauled to the waste dump facility which is
about 4.5 Km north of the mining area. Starting in Year 9, the mine plan takes
advantage of the opportunity to backfill completed pits. This has two benefits of
decreasing the haul distance and reducing the cost of reclamation.
Mine mobile equipment has been selected to meet the production requirements of the
mine schedule generated for Amulsar. Blast holes will be drilled with Sandvik DP1500i
xi

drills. Loading and hauling of material from the pit will be accomplished with a mixed
fleet of Cat 6018s (RH90) and 6030s (RH120) hydraulic excavators and Cat 777 haul
trucks. An auxiliary fleet of D10 track dozers, 834 wheel dozers, a 16m Grader, CAT 777
water truck, 992 front end loader and CAT 336 back-hoe are also required for mining.
These machines are planned for dump construction, road construction and
maintenance, pit cleanup and miscellaneous jobs.
The waste dump facility (WDF) will consist of the waste dump (WD), and an influent
equalization basin (IEB), wastewater treatment plant (WWTP), and evaporation pond
(EP), located downgradient of the WD and utilized for the collection and treatment of
mine-influenced water draining from the WD.
The WD will be constructed in three phases. The WD phase areas will be 465,500 m2,
506,800 m2 and 360,100 m2 for Phases 1, 2 and 3, respectively, for a total WD area of
1,332,400 m2. Waste material will be deposited on the WD in nominal 8 m thick lifts.
The WD may be constructed in sub-phases to minimize initial capital costs and to
optimize water management within the IEB and flows to the WWTP.
The WD will be lined with a 0.45-m minimum thickness compacted low permeability soil
liner. An underdrain system will be constructed within the WD footprint beneath the soil
liner to drain groundwater/subsurface seepage to the IEB and prevent the seepage from
entering the waste pile above the WD base liner. Rainfall and snowmelt water within the
WD (contact water) will be collected by an overdrain system constructed above the WD
base liner and routed to the IEB.
The IEB was sized in accordance with the project design criteria to store the WD
underdrain and overdrain flows, and to provide flow control to the WWTP. The IEB will
have a composite liner system comprised of High Density Polyethylene (HDPE)
geomembrane underlain by a 0.3-m minimum thickness compacted low-permeability soil
liner.
The WWTP will receive water from the IEB. Treatment processes have been developed
based on the projected water quality characterization of the combined flows from the
WD underdrains and overdrains. The IEB and WWTP capacities have been designed to
accommodate high flows associated with snowmelt, with operation of the WWTP at a
constant rate for about eight months per year. Final treated effluent water quality targets
are to be determined. The WWTP effluent is projected to comply with Armenian
maximum allowable concentration (MAC) Category II standards. Category III standards
(more lenient) have been considered, but the conceptual design and cost estimation for
the WWTP is conservatively based on the more stringent Category II effluent targets.
Reverse osmosis brine from the WWTP will drain by gravity to the EP for evaporation.
The EP was sized to meet the brine storage requirements. The final unit operation in the
wastewater treatment process is the spray-enhanced solar EP. Use of the EP limits the
operational season for water treatment. The EP will have a composite liner system
comprised of HDPE geomembrane underlain by a 0.3-m minimum thickness compacted
low-permeability soil liner.
xii

Treated water will be discharged to the Vorotan River. Secondary waste sludge from
chemical precipitation will be disposed on site. Solids accumulated in the EP may be
removed for disposal or disposed in-place at the end of the WWTP life.
Recovery Methods
This section is based on 2012 feasibility study for the project completed by K D
Engineering for Lydian. This section has not been revised to reflect work or studies that
had been completed at the time of the Mineral Resources reported on 5 March 2012.
This section will be updated as part of a feasibility study currently underway and due for
completion in August 2013.
Run-of-mine ore will be hauled from the open pit to the three stage crushing plant
located in close proximity to the mine. Haulage distance from the open pit to the run-ofmine stockpile is 1 km or less. The crushing plant consists of primary crushing through a
jaw crusher, secondary crushing through a cone crusher, and tertiary crushing through a
pair of cone crushers. The circuit will reduce ROM ore from minus 700 mm top size to a
product of 80 percent passing 12 mm and is designed to process ore at a rate of 5 Mtpa.
In the first year of operation 3.75 Mtpa will be processed and 5 Mtpa in year two.
Installation of a duplicate crushing circuit ramps up production to 10 Mtpa in Year 4 till
the end of the life of the project.
Crushed ore will be transported approximately 3.5 km on an overland conveyor to be
distributed along the north side of the leach pad. Pebble lime will be added to the ore
while on the overland conveyor. A tripper conveyor will deliver the ore from the overland
conveyor to a series of twenty four portable conveyors. A stacking conveyor will place
the ore on the leach pad in lifts of a nominal thickness of 8 m.
The HLF will consist of a leach pad and collection ponds. The leach pad will be
constructed in three phases with the ultimate ore heap amount of 95 Mt stacked in three
stages. The pad phases will be expansions to the north and each phase will be divided
into two cells for a total of six cells for the ultimate pad. The Phase 1 pad area will be
479,690 m2 and the Stage 1 heap capacity will be 18 Mt, suitable for the first 3.3 years
of operation. The Phase 2 pad area will be 465,000 m2 and the Stage 2 heap capacity
will be 27 Mt to provide capacity through Year 6. The Phase 3 pad area will be 461,120
m2 and the Stage 3 heap capacity will be 50 Mt. The ultimate pad area will be 1,405,810
m2 and will accommodate 95 Mt of ore heap with a nominal maximum heap height of 72
m above the pad liner, suitable for the 11-year operating life. If additional leachable ore
is identified, a fourth pad phase may be constructed to the north of Phase 3 to allow the
stacking of up to 120 Mt of ore heap. The leach pad may be constructed in sub-phases
to further minimize initial capital costs. A detailed discussion of the design of the HLF is
provided in the Feasibility Design Report (Golder, 2012c).
The collection ponds consist of process (pregnant and intermediate) ponds and a storm
event (storm) pond sized in accordance with the project design criteria and constructed
down gradient of the leach pad. Additionally, an overflow pond will be constructed down
gradient of the storm pond. The process ponds were sized to contain the operational
xiii

and drain down flows, and the storm pond was sized to contain the storm runoff from the
ultimate pad and ponds.
The leach pad and collection ponds will have composite liner systems respectively,
comprised of Linear Low Density Polyethylene (LLDPE) and HDPE geomembranes
underlain by a 0.3-m minimum thickness compacted low-permeability soil liner. The
process ponds will be double-HDPE-geomembrane lined with an intermediate leak
collection and recovery system (LCRS) layer.
Pregnant leach solution (PLS), intermediate leach solution (ILS) and storm event ponds
will be located south of the leach pad, and a barren leach solution tank will be located
inside the Adsorption-Desorption-Regeneration (ADR) plant near the ponds. Barren and
intermediate leach solutions will be dosed to contain 0.5 gpl sodium cyanide and will be
applied by drip emitters to the top of the ore heap at irrigation rates of 10 l/h/m2. The
drip emitter application system will operate to reduce evaporation in summer and allow
leaching to continue in winter. These leach solutions will be stacked such that the barren
solution will be used to irrigate the ore in a secondary leach cycle and the intermediate
solution will be used to irrigate fresh ore in a primary leach cycle to produce PLS. The
primary and secondary leach cycles will be 30 days and t 80 days respectively.
Leaching of precious metal from the ore will continue as the leached ore is buried by
consecutive lifts. After 30 days of buried lift leaching, resulting in 140 total leach days,
the predicted overall recoveries shown in Table 1.2, will be attained with an overall leach
solution to ore ratio exceeding 3 m3/t.
The barren and intermediate leach solutions will percolate through the ore and be
collected in a network of perforated drain collection pipes installed within a granular
layer above the pad liner. The solution will gravity flow from the drain pipes via transfer
pipes exiting the pad and draining into the process ponds. The transfer pipes will direct
the solution to either the pregnant or intermediate ponds by valve control. The PLS will
be pumped from the pregnant pond into the ADR plant. Precious metal will be adsorbed
from solution onto activated carbon counter-currently in a train of five adsorption
columns. Carbon desorption and regeneration will occur daily in 7 tonne batches. A
second train of five carbon columns will be installed for the Phase II expansion.
Carbonate scale will be removed from batches of loaded carbon in an acid wash vessel
using dilute hydrochloric acid. Precious metal will be desorbed from the acid washed
carbon in a strip vessel operating under elevated temperature and pressure. After the
carbon is used it will be regenerated in a kiln. The strip solution will report to an
electrowinning circuit where precious metals will be deposited onto steel mesh
cathodes. Weekly, the deposited metals will be washed from the cathodes, dried in a
retort to volatilize and collect elemental mercury, if present, and smelted in a furnace
with fluxes.
The dor, containing roughly equal proportions of gold and silver, will be shipped off-site
for refining and sale.
Infrastructure
Engineering for Lydian.
xiv

The Amulsar Gold Project covers an area of 130 km2, located in south central Armenia.
Currently paved roads are available to the town of Jermuk and a 15 km dirt road is
available from Jermuk to the mine site. Long term accommodation will be provided to
house up to 200 people on site and the remaining personnel will reside in existing hotels
in Jermuk. The contractor will be responsible for his own construction camp. Currently a
small exploration camp is available at site which utilizes a portable generator.
There is good infrastructure surrounding the Amulsar project. This includes the paved
highway between Yerevan and Iran, high tension power lines and substations, a gas
pipeline from Iran, year round water from the Vorotan River and a fibre optic internet
cable. As a consequence of the project location on the top of a mountain ridge, a
reasonable amount of infrastructure will need to be constructed during project
development. Mobile phones work on most parts of the project area. Out of country
supplies, material and equipment can be shipped to the ports of Poti or Batumi, Georgia,
then trucked through Georgia and Armenia to the Amulsar project site.
Community relations issues are currently handled by HSEC senior staff, a social
development manager, and a community liaison officer and a good understanding of
local issues and sensitivities has been established.
A detailed strategy for accommodating construction personnel, employees and security
personnel during the construction period will be developed during the detailed
engineering effort.
The Project is located in the catchments of three rivers Vorotan, Arpa and Darb. The
sections of catchments of Vorotan and Arpa rivers fall under the Lake Sevan Law as the
zones of non-immediate impact, where mining and processing are not restricted.
Environmental and Social Impact
The Environmental and Social Impact Assessment (ESIA) prepared for this project
considers the proposed mining of the Tigranes and Artavasdes deposits at Amulsar,
together with associated mine waste management, mineral handling, heap leaching,
gold extraction and ancillary activities, to produce gold-silver bullion corresponding to
Phases 1, 2 and 3 of the mining operations of a period of approximately 10 years from
the commencement of ore extraction, followed by reclamation and closure of the mine.
Environmental and social studies required with respect to mining operations at Erato will
require full assessment in an ESIA addendum to be completed at a later stage of the
Project.
The broad scope of the ESIA has considered the following:
The policy, legal and administrative framework.
The Project design covering geographical, ecological, environmental, social and

temporal aspects, influences and effects.
Analysis of baseline environment and socio-economic, defined through detailed

scope of work, in consultation with key stakeholders.
xv

Review of alternatives for siting various project facilities, taking into account
regulatory, environmental, biodiversity, cultural properties, social and community
health and safety issues.
Defining the environmental and social impacts associated with Project

construction, operation and mine closure and reclamation.
Incorporating mitigation measures into detailed design to eliminate or minimize

impacts to an acceptable level and consider appropriate alternatives.
Develop key Framework Management Plans with input to the site specific
Environmental and Social Action Plan (ESAP) for the delivery of the Project.
Framework Mine Closure Plan and measures for post-mining management.
The findings of the draft ESIA concluded the following:

Environmental impacts range from Negligible to Major, in the absence of mitigation.
Through the implementation of detailed mitigation measures, together with adherence to
management plans in the ESAP, it is considered that any potential residual
environmental impacts can be reduced to a range Negligible to Moderate. Residual
environmental impacts include dust generation, generation of greenhouse gas
emissions, conversion of land reducing habitat available for avian, flora and fauna
species and changes to landscape and topography. If left unmitigated, the project would
have the potential to cause surface and groundwater contamination, however extensive
mitigation measures have been developed which will manage any potential impacts to
an acceptable level.
Social impacts are both positive and negative. Positive impacts relate to improvements
in local livelihoods through direct employment by the project, as well as knock-on
economic growth; and macroeconomic benefits through taxation, land rent and other
revenues paid by Lydian. These positive impacts range from Minor to Moderate;
provided enhancement measures (such as stakeholder engagement, transparency and
governance) are implemented. Negative impacts relate to economic displacement as a
result of land take; localized inflation driven by higher incomes in the region; community
cohesion issues between mine employees and other local residents; potential inmigration of job-seekers; managed disturbance of archaeological sites; and community
health impacts, including higher risk sexual practices. With mitigation, negative impacts
range from Negligible to Moderate.
The effective implementation of the mitigation measures outlined in the ESIA is essential
to ensure that positive benefits of the project outweigh the negative impacts and the
negatives are mitigated or designed out. The development and implementation of
detailed management plans will be incorporated into operational procedures, as well as
Lydians ESMS. Lydians social strategy and on-going community development
measures are expected to provide additional benefits to local communities over and
above project impacts.
Capital Cost
xvi

Capital costs for the project were estimated by IMC for mining, KDE for the processing
plant/infrastructure and Golder for the leach pad, collection ponds, waste dump facility,
wastewater treatment plant, and for mine closure and rehabilitation.
The capital expenditures for the Amulsar Project processing facility will occur in two
phases; Years 1 to 3 is Phase I and Years 4 through the remaining years is Phase II.
Besides the Phase II process plant expansion sustaining costs are incurred for the leach
pad, mining fleet and waste dump.
The initial and sustaining capital costs are summarized in Table 1.2.
xvii

Table 1.2 Total Initial And Future Sustaining Project Capital Costs
Item
Initial cost (US$)
Sustaining
cost (US$)*
Total (US$)
8,791,700
17,189,800
25,981,500
228,568,063
26,872,254
255,440,318
19,078,412
19,078,412
Leach Pads
15,687,450
31,814,488
47,501,938
Waste Dump
16,575,893
14,302,181
30,878,074
37,221,477
37,221,477
146,478,612
416,101,718
Mining Cost
Process Plant Cost
Waste Water Treatment Plant
Closure and Reclamation

Total Initial and Future Sustaining Project Cost
269,623,106
* Sustaining costs include the majority of the capital costs associated with the Phase II expansion.
Operating Costs
Operating costs for the project were estimated with input from KDE, IMC and Golder.
These costs over the life of the mine are summarized in Table 1.3.
Table 1.3 Life-of-Mine Cash Operating Cost
Item
US$/Tonne Ore
Mining
6.29
Processing
2.92
0.13
G&A
0.47
Cash Operating Cost
9.81
Newmont Payment
0.21
Total Operating Cost (US$/oz)
468.48
Economic Analysis
The economic highlights are summarized in Table 1.4.
xviii

Table 1.4 Economic Highlights

Average stacked gold grade
g/t
0.750
Steady state annual gold production (Yr 1-3)
oz
118,341
Steady state annual gold production (Yr 4-12)
oz
186,047
Life of Mine from production start
yr
12
Planned Steady State Production Rate (Yr 1-3)
tpd
15,000
Planned Steady State Production Rate (Yr 4-12)
tpd
30,000
IRR Pre tax
27.7%
US$M
646.0
yr
4.0
NPV Pretax (0% discount rate)
US$M
1,121.6
Initial Capital Cost
US$M
269.6
Total Capital Cost
US$M
416.1
Cash Costs
US$/oz
468.5
88.6
Moz
2.29
NPV Pretax (5% discount rate)

Payback period from start of production
Metallurgical Gold Recovery

Total Mined Gold to Leach Pad
The financials for the base case mining options are summarized in Table 1.5.
Table 1.5 Economic Analysis Summary - US$ Pre-Income Tax Cash Flow
US $ x
1000
US $/t
Resource
US $/oz
Gold
Mine Gate Value of All Resource Net of

Transportation and Refining
2,424,680
25.55
1,194.75
Mining Operating Cost
(596,959)
(6.29)
(294.15)
Processing Cost
(277,116)
(2.92)
(136.55)
(12,276)
(0.13)
(6.05)
General & Administration
(44,407)
(0.47)
(21.88)
Royalties (Newmont Payment)
(20,000)
(0.21)
(9.85)
Cash Operating Cost
(950,757)
(10.02)
(468.48)
Cash Operating Cash Flow
1,473,923
15.53
726.27
Capital Cost including Pre-Production Development
(416,102)
(4.38)
(205.03)
Pre-Income Tax Cash Flow
1,057,821
11.15
521.24
Metal price scenarios were used in the pre-tax model to evaluate the sensitivity on NPV,
IRR, and payback. The results for the base case mining options are shown in Table 1.6.
xix

Table 1.6 Summary of Key Financial Parameters (Sensitivity to Gold Price)

1,100
1,200
1,300
1,400
1,500
NPV(5), (000's)
512,504
645,976
779,448
912,920
1,046,392
IRR, Pre-Taxes
23.8%
27.7%
31.3%
34.8%
38.1%
4.5
4.0
3.7
3.4
3.1
Gold Price, US$/oz
Payback, Operating Years
Conclusion and Recommendations

The Amulsar high-sulphidation epithermal gold-silver deposit has been defined as a
result of systematic exploration activities undertaken over a period from 2008 to 2012.
More recently, surface geological and structural mapping, supported by a large
database of orientated core measurements, has resulted in an improved understanding
of the geology and mineralization of gold and silver for the deposit. In turn, this has
allowed the estimation of resources to better reflect the geology and mineralization
characteristics of the deposit. Exploration work for the project is professionally managed,
using procedures that meet generally accepted, industry best practices. The project has
been explored by; geophysical techniques, diamond core and reverse circulation drilling,
and chip sampling. In 2012, a structural study over the Amulsar property was
commissioned by Lydian. This study necessitated a major reinterpretation of geology
and mineralization constraints for the project.
In the absence of clear mappable controls of mineralization an LMIK estimator was
chosen as the most appropriate methodology to estimate gold resources for the UV unit.
Gold mineralization for the LV unit is limited and overall subordinate to UV
mineralization, and therefore, an OK estimator was used for this unit. Silver
mineralization is not well understood, probably unrelated to gold and significantly lowgrade. An OK approach to estimating silver for the UV and LV zones was deemed
appropriate.
Based on review of exploration data and the estimation of resources, AMC concludes
that mineral resources can be expanded at depth for the UV rocks to the south-east of
the Arshak area, and at depth in the Erato, Tigranes and Artavasdes areas. Further
exploration will require reverse circulation drilling and some diamond core drilling to
provide structural information. Continuing work on a structural analysis of the project will
be important to the accurate estimation of resource, and a better geological
understanding of mineralization for the Amulsar project.
The exploration procedures and protocols used by Lydian meet best industry practices
and should be continued. Assay quality-control procedures are appropriate, but could be
strengthened with field duplicates for silver assays. It is AMCs experience that operating
a sample preparation facility provides many benefits to exploration companies, without
any compromises in assay integrity or reliability. Although AMC has found no issues with
the current sample preparation laboratory at Gorayk, developing protocols where
samples are passed to the preparation facility in more formalized process will be
beneficial.
xx

A structural study of the Amulsar project, initiated in 2012, has provided important
directions in understanding the Amulsar project and should be continued. Providing a
structural framework for the deposit is considered by AMC as ongoing process of
exploring and defining more mineral resources for the project.
AMC recommends a combination of infill drilling and step-out drilling to systematically
extend known areas of mineralization. The infill drilling strategy is suggested to
concentrate on delineating measured and indicated by drilling areas classified as
inferred by resources, by increasing the drill to a nominal spacing of 40 m 40 m
spacing with both inclined and vertical holes. In some areas, more closely-spaced
drilling may be required to better define structural or lithological contacts, or areas where
mineralization becomes diffuse. Step-out drilling should concentrate on extending
mineralization to the south-west of the Arshak area, and extending mineralization at
depth in the Erato, Tigranes and Artavasdes areas.
An exploration programme to provide the basis for the above recommendations will
comprise of approximately 34,000 metres of reverse circulation drilling and 6,000 metres
diamond drillholes. The estimated cost including ancillary costs is estimated at
US$6,400,000.
Recommended metallurgical testwork for the project are the following column leach
tests:
Further column leach tests be carried out on metallurgical composites from the
Erato deposit. Drillholes and sample intervals should be selected based upon the
updated Mineral Resource Estimate and open-pit design prepared by AMC.
Carry out a single refrigerated column leach test on a mixed Tigranes/Artavasdes

composite sample, to simulate the effect of cold climate on leach performance;
Carry out column leach tests on a run-of-mine ore sample to determine the
potential metallurgical leach performance; and
Conduct additional column leach tests on low-grade material of 0.2 g/t Au and 0.3
g/t Au.
Positive results from this feasibility study, based on the mineral reserve estimates of 3
September 2012, suggest that the Amulsar project be advanced towards detailed
engineering at an estimated cost of US$ 9.5 million.
Mining at Amulsar will be by conventional open pit methods with 90-tonne haul trucks. A
study into improving economics by using 140-tonne trucks should be conducted as well
as project improvements by modeling the ore body on 5-meter blocks instead of 10meter blocks. Additional exploration upside at Amulsar has the potential to increase the
mineral resource.
A site wide water balance has been completed with the design management plans to
mitigate the discharge of contaminated water. Further analysis of the balance is
recommended to reduce treatment requirements.
Environmental baseline monitoring programs should be maintained and the
development of the Biodiversity Action Plan should be continued and implemented.
xxi

Social engagement should continue towards defining opportunities for local

employment. Preparation should continue towards preparation for implementation of the
Environmental and Social Action Plan.
The Engineering, Procurement and Construction Schedule should be optimized and
work should commence on a Project Execution Plan. Key personnel should be hired
including a construction manager familiar with in-country construction contractors.
xxii

CONTENTS
1
SUMMARY
III
INTRODUCTION
RELIANCE ON OTHER EXPERTS
PROPERTY DESCRIPTION AND LOCATION

4
4.1
Location .......................................................................................................... 4
4.2
Property Description ....................................................................................... 5
4.3
Ownership ...................................................................................................... 6
4.4
Tenement ....................................................................................................... 6
4.5
Armenian Mining Legislation .......................................................................... 6
4.6
Royalties ......................................................................................................... 6
4.7
Newmont Joint Venture Agreement ............................................................... 7
4.8
Environmental ................................................................................................ 7
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY
9
5.1
Accessibility .................................................................................................... 9
5.2
Physiography .................................................................................................. 9
5.3
Climate ........................................................................................................... 10
5.4
Infrastructure .................................................................................................. 11
HISTORY
GEOLOGICAL SETTING AND MINERALIZATION

13
7.1
Regional Geology ........................................................................................... 13
7.2
Local Geology ................................................................................................ 13
7.2.1 Alteration .......................................................................................... 14
7.2.2 Structure ........................................................................................... 15
7.2.3 Mineralization ................................................................................... 15
DEPOSIT TYPES
EXPLORATION
21
9.1
Introduction..................................................................................................... 21
9.2
Newmont Joint Venture (20072010) ............................................................. 21
9.3
Lydian (2010-2012) ........................................................................................ 21
9.4
Methodology ................................................................................................... 21
9.4.1 Channel Samples ............................................................................. 21
9.4.2 Trench Samples ............................................................................... 22
10
DRILLING
23
10.1 Newmont Joint Venture (20082010) ............................................................. 23
10.2 Lydian (20102012) ....................................................................................... 23
10.3 Drilling Methodology ....................................................................................... 26
10.3.1 Drillhole Collar Coordinates .............................................................. 26
10.3.2 Downhole Surveys ............................................................................ 27
10.3.3 Diamond Core Drilling Protocols....................................................... 28
10.3.4 Reverse Circulation Drilling Protocols .............................................. 28
10.4 AMC Comments ............................................................................................. 28
12
20

11
SAMPLE PREPARATION, ANALYSES AND SECURITY

30
11.1 Sampling Method and Approach .................................................................... 30
11.1.1 Specific Gravity Measurements ........................................................ 30
11.1.2 Diamond Drill Core Samples ............................................................ 31
11.1.3 Reverse Circulation Hole Samples ................................................... 31
11.2 Sample Preparation and Analysis .................................................................. 32
11.2.1 Amulsar Assay Quality Control Procedures...................................... 32
11.3 AMC Comments ............................................................................................. 34
12
DATA VERIFICATION
36
12.1 Verification by Lydian ..................................................................................... 36
12.2 Verification by AMC ........................................................................................ 36
12.2.1 Twinned Hole Review ....................................................................... 36
12.2.2 Potential Gold Assay Bias in Drilling Methods .................................. 36
12.2.3 Site Visit ............................................................................................ 38
12.2.4 Verification of Analytical Quality Control Data .................................. 39
12.2.5 Assay Database Verification ............................................................. 40
13
MINERAL PROCESSING AND METALLURGICAL TESTING

41
13.1 SGS Lakefield Research (2008) ..................................................................... 41
13.2 SGS Mineral Services UK Ltd. (2009) ............................................................ 41
13.2.1 -75 m Bottle Roll Leach Tests ........................................................ 41
13.2.2 -2 mm Bottle Roll Leach Tests.......................................................... 42
13.2.3 Column Leach Tests ......................................................................... 42
13.3 Wardell Armstrong International (2010) ......................................................... 43
13.4 Wardell Armstrong International (2011) ......................................................... 45
13.5 Kappes Cassiday & Associates (2012) .......................................................... 45
13.6 Kappes Cassiday & Associates (2013) .......................................................... 49
13.7 Metallurgical Samples and Locations ............................................................. 52
14
MINERAL RESOURCE ESTIMATES

56
14.1 Overview of Estimation Strategy .................................................................... 56
14.2 Geological and Assay Database .................................................................... 56
14.3 Geological Modelling and Interpretation ......................................................... 57
14.4 Specific Gravity .............................................................................................. 58
14.5 Topography .................................................................................................... 59
14.6 Resource Database ........................................................................................ 59
14.7 Compositing, Capping and Declustering ........................................................ 60
14.8 Gold Indicator Statistics .................................................................................. 61
14.9 Variography .................................................................................................... 62
14.10 Block Model Parameters ................................................................................ 67
14.11 Estimation Procedures ................................................................................... 68
14.11.1
Gold Estimates for Upper Volcanic Units .............................. 68
14.11.2
Gold Estimate for Lower Volcanics ....................................... 69
14.11.3
Silver Estimates for Upper and Lower Volcanic Units........... 69
14.11.4
Specific Gravity ..................................................................... 69
14.11.5
Validation .............................................................................. 75
14.12 Resource Classification .................................................................................. 75
14.13 Mineral Resource Statement .......................................................................... 76
14.14 Previous Resource Estimates ........................................................................ 77
14.15 Grade Sensitivity Analysis .............................................................................. 78
ii

15
MINERAL RESERVE ESTIMATES

81
15.1 Floating Cones ............................................................................................... 81
15.2 Final Pit Design .............................................................................................. 86
15.3 Mineral Reserve Estimate .............................................................................. 89
16
MINING METHODS
90
16.1 Pit and Phase Design ..................................................................................... 90
16.2 Mine Schedule ................................................................................................ 96
16.3 Waste Movement ........................................................................................... 99
16.4 Low Grade Stockpiles .................................................................................... 101
16.5 External Haul Roads and Time Sequence Drawings ..................................... 103
16.6 Mining Equipment Fleet .................................................................................. 109
16.6.1 Drill and Blast ................................................................................. 109
16.6.2 Load and Haul ................................................................................ 109
16.6.3 Ancillary Equipment ........................................................................ 110
16.6.4 Personnel ....................................................................................... 111
17
RECOVERY METHODS
114
17.1 Crushing Facility ............................................................................................. 114
17.1.1 Primary Crushing ............................................................................ 115
17.1.2 Secondary Crushing ....................................................................... 115
17.1.3 Tertiary Crushing ............................................................................ 115
17.1.4 Stacking .......................................................................................... 116
17.2 Heap Leach Facility ........................................................................................ 116
17.2.1 Leach Pad ...................................................................................... 117
17.3 Process Plant ................................................................................................. 120
17.3.1 Carbon Adsorption .......................................................................... 120
17.3.2 Carbon Acid Wash .......................................................................... 121
17.3.3 Carbon Stripping ............................................................................. 121
17.3.4 Carbon Regeneration ..................................................................... 121
17.3.5 Carbon Handling ............................................................................. 122
17.3.6 Electrowinning and Smelting .......................................................... 122
17.3.7 Reagent Handling ........................................................................... 122
18
INFRASTRUCTURE
123
18.1 Existing Infrastructure and Services ............................................................... 123
18.1.1 Location .......................................................................................... 123
18.1.2 Site Access and Roads .................................................................. 123
18.1.3 Buildings ......................................................................................... 123
18.1.4 Resources & Infrastructure ............................................................. 123
18.1.5 Communications ............................................................................. 124
18.1.6 Personnel ....................................................................................... 124
18.1.7 Power Supply ................................................................................. 128
18.1.8 Power Distribution .......................................................................... 128
18.2 Site Development ........................................................................................... 130
18.2.1 Crushing Plant ................................................................................ 133
18.2.2 Leach Pad and Collection Ponds ................................................... 133
18.2.3 Waste Dump Facility ....................................................................... 133
18.2.3.1 Waste Dump ............................................................. 134
18.2.3.2 Influent Equalization Basin ........................................ 134
18.2.3.3 Wastewater Treatment Plant .................................... 135
iii

18.3
18.4
18.2.3.4 Evaporation Pond ..................................................... 136

18.2.4 Accommodations ............................................................................ 136
18.2.5 Roads & Site Access ...................................................................... 136
18.2.6 NonProcess Buildings .................................................................. 137
Water Source ................................................................................................. 138
18.3.1 Potable Water Supply ..................................................................... 138
18.3.2 Raw Water Distribution System ...................................................... 138
18.3.3 Process Water Supply .................................................................... 139
18.3.4 Sewage Waste Water Treatment.................................................... 139
Waste Disposal .............................................................................................. 139
19
MARKET STUDIES AND CONTRACTS

141
19.1 Marketing Studies ........................................................................................... 141
19.2 Contracts ........................................................................................................ 141
20
ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY

IMPACT
142
20.1 Location, Environmental and Social Setting ................................................... 143
20.2 ESIA and Permitting ....................................................................................... 144
20.2.1 Scope of the ESIA .......................................................................... 144
20.2.2 Republic of Armenia Environmental Impact Assessment ............... 145
20.2.3 Permits and Licensing .................................................................... 146
20.3 Significant Project Consumption and Releases ............................................. 148
20.4 Environmental Context ................................................................................... 152
20.4.1 Geology and Soils .......................................................................... 152
20.4.2 Radioactivity ................................................................................... 152
20.4.3 Seismicity ....................................................................................... 153
20.4.4 Water Resources ............................................................................ 153
20.4.5 Biodiversity ..................................................................................... 155
20.4.6 Air Quality ....................................................................................... 160
20.4.7 Noise and Vibration ........................................................................ 160
20.4.8 Visual and Landscape Aspects ...................................................... 160
20.5 Environmental and Social Impact Assessment (ESIA) ................................... 161
20.5.1 Environmental Impact Assessment ................................................ 161
20.5.2 Summary of Environmental Impacts ............................................... 165
20.6 Social Context and Baseline .......................................................................... 165
20.6.1 Archaeology and Cultural Heritage ................................................. 165
20.6.2 Demographic, Land-Use, Family Structure and Migration Patterns 165
20.6.3 Household income .......................................................................... 166
20.6.4 Land Use ........................................................................................ 167
20.7 Social Impact Assessment ............................................................................. 167
20.7.1 Summary of Social Impact Assessment ......................................... 173
20.8 Consideration of Alternatives ......................................................................... 173
20.9 Environmental, Health and Safety Project Design Parameters ...................... 174
20.9.1 Amulsar Mine EHS Engineering Measures .................................... 174
20.10 Environmental and Social Management System ............................................ 179
20.11 Environmental and Social Monitoring Plan ..................................................... 180
20.12 Reclamation, Closure and Rehabilitation ....................................................... 180
20.13 Planned Future Work ..................................................................................... 181
21
CAPITAL AND OPERATING COSTS
183
iv

21.1
21.2
21.3
21.4
21.5
21.6
21.7
21.8
21.9
Mine Capital Costs ......................................................................................... 183

Mine Operating Costs ..................................................................................... 184
Process Capital Costs .................................................................................... 187
21.3.1 Direct Costs .................................................................................... 190
21.3.2 Indirect Costs .................................................................................. 194
21.3.3 Contingency and Accuracy ............................................................. 195
21.3.4 Exclusions ...................................................................................... 195
Process Operating Costs ............................................................................... 195
Waste Dump Facility Capital Costs ................................................................ 199
Heap Leach Facility Capital Costs ................................................................. 200
Wastewater Treatment Plant Operating and Capital Costs ............................ 200
Closure and Reclamation Cost Estimate ........................................................ 201
Newmont Agreement (Royalty) ...................................................................... 202
21.9.1 Working Capital .............................................................................. 202
22
ECONOMIC ANALYSIS
203
22.1 Owner Operating Mining Case ....................................................................... 203
23
ADJACENT PROPERTIES
211
23.1.1 Seismicity and Seismic Hazards .................................................... 211
23.2 Preliminary Geochemical Assessment ........................................................... 212
23.2.1 Static Testing .................................................................................. 212
23.2.2 Kinetic Testing ................................................................................ 213
23.2.3 Spent Ore Characterization ............................................................ 213
24
INTERPRETATION AND CONCLUSIONS
215
25
RECOMMENDATIONS
219
26
REFERENCES
224
TABLES
Table 2.1
Table 4.1
Table 10.1
Table 11.1
Table 12.1
Table 13.1
Table 13.2
Table 13.3
Table 13.4
Table 13.5
Table 13.6
Table 13.7
Table 13.8
Table 13.9
Table 13.10
Table 13.11
Table 14.1
Table 14.2
Persons who Prepared or Contributed to this Technical Report ..................... 2

Summary of Amulsar Project Licences ........................................................... 6
Summary of Drilling Completed for the Amulsar Project .............................. 24
Summary of Laboratory Independent Assay Quality Control Samples ......... 34
Drillholes Examined by AMC ........................................................................ 39
Whole Ore Cyanidation Leach Tests ............................................................ 42
Coarse Ore Cyanidation Leach Test ............................................................ 42
Column Leach Tests (-38 mm) ..................................................................... 43
Column Leach Tests (-19 mm) ..................................................................... 43
Final Gold Recovery Summary by Test and Composite ............................... 43
Column Leach Test Results Summary ......................................................... 44
Fine Cyanidation Leach Tests (Tigranes/Artavasdes) .................................. 46
Fine Cyanidation Leach Test Results ........................................................... 47
KCA Column Tests ....................................................................................... 50
Fine/Coarse Cyanidation Leach Tests (Erato) .............................................. 51
Metallurgical Testwork Composite Summary ............................................... 53
Summary of Amulsar Combined UV and LV Gold Indicator Statistics .......... 62
Summary of Variogram Models Amulsar Project .......................................... 64

Table 14.3
Table 14.4
Table 14.5
Amulsar Project Block Model Definition ........................................................ 67

Gold and Silver Estimation Parameters ........................................................ 70
Mineral Resource Statement for the Amulsar Project, Armenia, AMC
Consultants (UK) Limited, 5 March, 2013 ..................................................... 77
Table 14.6
Mineral Resource Statement for the Amulsar Gold Project, Independent
Mining Consultants Inc., 3 September, 2012 ................................................ 78
Table 14.7
Global Model Quantities and Grade Estimate, Amulsar Project ................... 79
Table 15.1
Floating Cone Inputs ..................................................................................... 82
Table 15.2
NPV of Floating Cone Geometries Evaluated at US$1,200/oz Au and
US$20/oz Ag................................................................................................. 86
Table 15.3
Material Contained within Floating Cone Geometries .................................. 87
Table 15.4
Mineral Reserves Represent the Diluted Ore Scheduled to the Crusher ..... 89
Table 16.1
Phase Design Criteria ................................................................................... 91
Table 16.2
Comparison of Designed Phase Tonnes against $900 Cone Tonnes at a
0.25 g/t Recovered Gold Cut-Off .................................................................. 92
Table 16.3
Comparison of Designed Phase Tonnes against US$900 Cone Tonnes at
a 0.25 g/t Recovered Gold Cut-off ................................................................ 93
Table 16.4
Material Movements Total Annual Summary ................................................ 98
Table 16.5
Waste Movement Required for Mine Schedule .......................................... 101
Table 16.6
Summary of Mine Mobile Equipment Fleet Life of Mine ............................. 111
Table 16.7
Salaried Staff Labor Requirements............................................................. 112
Table 16.8
Mine Hourly Labor Requirements ............................................................... 113
Table 18.1
Summary of Operations Personnel ............................................................. 126
Table 18.2
Mine Power Requirements (by Area) .......................................................... 129
Table 20.1
Republic of Armenia Permits Required for Development of Amulsar Mine 147
Table 20.2
Average Water Requirements .................................................................... 151
Table 20.3
Summary of findings from the Environmental Impact Assessment ............ 162
Table 20.4
Summary of Social Impacts ........................................................................ 168
Table 20.5
Environmental, Community and/or Health & Safety Design Protection
Measures and Best Management Techniques ........................................... 176
Table 21.1
Summary of Mine Capital Costs ($US x 1000) ........................................... 183
Table 21.2
Summary of Mine Operating Costs - Total Dollars ($US x 1000) ............... 186
Table 21.3
Summary Process Plant Initial Capital Cost ............................................... 188
Table 21.4
Summary Process Plant Sustaining Capital Cost ....................................... 189
Table 21.5
Process Plant Operating Cost Estimate Summary ..................................... 196
Table 21.6
Operating Cost Estimate - Heap Leach Consumables ............................... 198
Table 21.7
Maintenance ............................................................................................... 199
Table 21.8
Water .......................................................................................................... 199
Table 21.9
Waste Dump Facility Cost Estimate, US$ .................................................. 199
Table 21.10 Heap Leach Facility Cost Estimate, US$ .................................................... 200
Table 21.11 Wastewater Treatment Plant Cost Estimates ............................................. 201
Table 21.12 Closure and Reclamation Cost Estimate .................................................... 201
Table 22.1
Owner Operated Mining Economic Analysis Summary .............................. 203
Table 22.2
Owner Operated Mining Economic Analysis Summary - Before Tax Cash
Flow and Unit Values .................................................................................. 204
Table 22.3
Cash Flow Schedule ................................................................................... 205
Table 22.4
Rate of Return Sensitivity ........................................................................... 208
Table 22.5
NPV Sensitivity (US$ X 1000) .................................................................... 209
Table 22.6
Summary of Key Financial Parameters (Sensitivity to Gold Price) ............. 210
vi

Table 25.1
Table 25.2
Estimated Costs for Recommended Exploration Programme .................... 220

Estimated Costs for Detailed Engineering Study ........................................ 223
FIGURES
Figure 4.1
Figure 4.2
Figure 5.1
Figure 5.2
Figure 7.1
Location Map for Amulsar Project ................................................................... 4

Amulsar Project Land Tenure Map ................................................................. 5
Typical Amulsar Physiography ..................................................................... 10
Amulsar Project Infrastructure ...................................................................... 11
Regional Geology, Upper Eocene to Lower Oligocene Calc-Alkaline
Magmatic Arc System ................................................................................... 14
Figure 7.2
Geological Map of Amulsar Project .............................................................. 16
Figure 7.3
Amulsar Geological Cross-section A-A, Erato Area ..................................... 17
Figure 7.4
Amulsar Geological Cross-section B-B, Tigranes Area ............................... 17
Figure 7.5
Amulsar Geological Cross-section C-C, Artavasdes ................................... 18
Figure 7.6
Amulsar Geological Cross-section D-D, Erato and Tigranes Areas ............ 18
Figure 7.7
Examples of Gold Mineralization in Core Samples, Drillhole DDA-047 ........ 19
Figure 10.1 Location of Drillholes and Chip Samples ...................................................... 25
Figure 10.2 Drilling Operations Amulsar Project .............................................................. 26
Figure 10.3 Drillhole Marker for RCG-001 ....................................................................... 27
Figure 11.1 Station for Measuring Specific Gravity at Gorayk Core Shed Facilities ........ 30
Figure 12.1 Histogram Plot for Gold Assays (Length Weighted) for Core (A) and
Reverse Circulation (B) Drillholes ................................................................. 37
Figure 12.2 QuantileQuantile Plot for Gold Assays (Length Weighted) for Core and
Reverse Circulation Drillholes ....................................................................... 38
Figure 13.1 Gold Leach Curves (Bulk Composite) .......................................................... 48
Figure 13.2 Gold Leach Curves (Half Core Composites) ................................................ 48
Figure 13.3 Gold Leach Curves (Whole Core Composites) ............................................. 49
Figure 13.4 Erato Gold Leach Curves (Half Core Composites) ....................................... 52
Figure 13.5 Tigranes and Artavasdes Metallurgical Sample Drillhole Location Map ....... 54
Figure 13.6 Erato Metallurgical Sample Drillhole Location Map ...................................... 55
Figure 14.1 Wireframe Models for Amulsar Project and Interpreted Faults ..................... 58
Figure 14.2 Summary Statistics for Specific Gravity Measurements by Zone* ................ 59
Figure 14.3 Variogram Models for Upper Volcanic Unit, Erato Zone ............................... 65
Figure 14.4 Silver Variogram Models for Erato and AAT UV Zones ................................ 66
Figure 14.5 Silver Variogram Model for LV Zone ............................................................. 67
Figure 14.6 Tonnage and Grade Plot for Erato Upper Volcanic Zone LMIK Estimate ..... 71
Figure 14.7 Tonnage and Grade Plot for AAT Upper Volcanic Zone LMIK Estimate ...... 71
Figure 14.8 Cross-section of Amulsar Gold Deposit Sub Unit Block Model .................... 72
Figure 14.9 Cross-section of Amulsar Gold Deposit Gold Grade Block Model ................ 73
Figure 14.10 Figure 14.10 Cross-section of Amulsar Gold Deposit Silver Grade Block
Model ............................................................................................................ 74
Figure 14.11 Global Grade and Tonnage Curves, Amulsar Project .................................. 80
Figure 15.1 $900/oz Floating Cone used for Ultimate Pit Design .................................... 83
Figure 15.2 US$ 400-US$1200/oz Floating Cones Sliced at 1830m Elevation ............... 84
Figure 15.3 Cross Sections of $400, $600, and $900/.oz Au Cones ............................... 85
Figure 15.4 Results of Floating Cone Evaluations ........................................................... 87
Figure 15.5 Ultimate Pit ................................................................................................... 88
vii

Figure 16.1
Figure 16.2
Figure 16.3
Figure 16.4
Figure 16.5
Figure 16.6
Figure 16.7
Figure 16.8
Figure 16.9
Figure 16.10
Figure 17.1
Figure 18.1
Figure 18.2
Figure 20.1
Figure 20.2
Figure 22.1
Figure 22.2
Phases Sliced at 2830 m Elevation .............................................................. 94

Cross Sections of Designed Phases Showing Gold Grade in Block Model .. 95
Graphical Presentation of Mine Schedule .................................................... 99
Pit Backfill at End of Mine Life .................................................................... 100
Proposed Stockpiles at the End of Year 10 ................................................ 102
End of Production ....................................................................................... 104
End of Year ................................................................................................. 105
End of Year 5 .............................................................................................. 106
End of Year 10 ............................................................................................ 107
End of Year 12 ............................................................................................ 108
Amulsar Overall Flowsheet ......................................................................... 114
Mine Senior Management Staff .................................................................. 127
Proposed Overall Site General Arrangement Layout ................................. 132
Footprint of Mine Development (Throughout the Operational Life) ............ 149
State Sanctuaries and Important Bird Areas in relation to the Project
Exploration License .................................................................................... 159
Amulsar Gold Project Pre-Tax Sensitivity IRR ............................................ 208
Amulsar Gold Project Pre-Tax Sensitivity NPV@5%.................................. 209
APPENDICES
APPENDIX A
SELECTED ASSAY QUALITY CONTROL PLOTS
APPENDIX B
SUMMARY STATISTICS FOR COMPOSITES AND CAPPED COMPOSITES
APPENDIX C
SWATH PLOTS
APPENDIX D
DETAILED MINERAL RESOURCE BY ZONE
viii

INTRODUCTION
This technical report for the Amulsar gold project, in the south-central region of Armenia,
has been prepared by AMC Consultants (UK) Limited (AMC) of Maidenhead, UK, for
Lydian International Limited (Lydian). The report was prepared by G. David Keller, P.
Geo. Mineral reserves for this report are based on the Lydian International Limited
Amulsar Resource Update and Heap Leach Feasibility Study report prepared by KD
Engineering on 3 September 2012 and amended 26 November 2012. Mineral resources
in this report are based on the Amulsar Gold Project, Armenia for Lydian International
Limited report prepared by AMC on 18 April 2013.The report has been prepared in
accordance with requirements of National Instrument 43-101 (NI 43-101), Standards of
Disclosure for Mineral Projects, of the Canadian Securities Administrators (CSA) for
lodgement on the CSAs System for Electronic Document Analysis and Retrieval
(SEDAR). This report is required to support an update of the estimation of mineral
resources for the Amulsar Gold Project as announced by Lydian in a press release
issued 5 March 2013. The effective date of this report is 18 April 2013 for mineral
resources and 28 November 2013 for mineral reserves.
This technical report has been prepared by G. David Keller, P. Geo, of AMC, Gary
Patrick, AusIMM CP (Met) of Metallurg Pty Ltd; Herb Welhener, MMSA-QPM of
Independent Mining Consultants, Inc.; Richard E. Kiel, P.E. of Golder Associates Inc.,
Peter R. Lemke, P.E. of Golder associates Inc.; John Maxwell Eyre, CEnv of North
Coast Consulting Limited and Joseph M. Keane, P.E. of SGS-KD Engineering who all
meet the requirements of a Qualified Person (QP), and are independent as defined in
NI 43-101. Responsibilities of each QP for this report are summarized in Table 2.1. Site
visits conducted by each of the QPs is also summarized in this table.

Table 2.1
Qualified
Person
Persons who Prepared or Contributed to this Technical Report

Position
Employer
Date of Site
Visit
Professional
Designation
Sections of
Report
Qualified Persons responsible for the preparation and signing of this Technical Report
G. David Keller
Gary Patrick
Herb Welhener
Principal
Geologist
AMC
Consultants
(UK) Limited
1214
December 2012
P.Geo.
Jointly Section 1
Sections 212
Section 14 and
jointly Sections
24-25
Director
Metallurg Pty
Ltd.
612
June 2011
MAusIMM CP
(Met)
Jointly Section 1
Section 13 and
Jointly Sections
24-25
Vice
President
Independent
Mining
Consultants,
Inc.
MMSA-QPM
Jointly Section 1
Sections 15-16,
18.2, 21.1, 21.2
and jointly
Sections 24-25
P.E.
Jointly Section 1
Sections 17.2,
21.7 and jointly
Sections 24-25
P.E.
Jointly Section 1
Sections 18.4,
21.7 and jointly
Sections 24-25
CEnv
Jointly Section 1
Section 20 and
jointly Sections
24-25
P.E.
Jointly Section 1
Section 17, 18,
19, 23, 28;
portions of 21, 22,
25, and 26; 27,
and jointly
Sections 24-25
Richard E. Kiel
Senior
Geological
Engineer
Golder
Associates
Inc.
Peter R. Lemke
Water
Treatment
Technical
Lead
Golder
Associates
Inc.
John Maxwell
Eyre
Director
North Coast
Consulting
Limited
Joseph M.
Keane
Associate
SGS- KD
Engineering
June 21-23,
2011
June 2011,
SeptemberOctober 2011,
May 2012,
November2012
and April 2013
May 2011
-
June 2011

RELIANCE ON OTHER EXPERTS
AMC has not performed an independent verification of land title and tenure as
summarized in Section 3 of this technical report. AMC did not verify the legality of any
underlying agreement(s) that may exist concerning the permits or other agreement(s)
between third parties. AMC relies on Lydian to provide correct information on the land
title and tenure of the Amulsar gold project.
AMC was informed by Lydian that there are no known litigations potentially affecting the
Amulsar project.

PROPERTY DESCRIPTION AND LOCATION
4.1
Location
The Amulsar gold project is located in south-central Armenia approximately 115 Km

south-west of the capital Yerevan, and covers an area of approximately 98 square Km
(Figure 4.1). The property is covered by three Prospecting Permissions. A mining
licence covers the Amulsar area. Core shed facilities, sample processing, and offices for
the project are located in the nearby town of Gorayk, near the southern boundary of the
project area.
Figure 4.1
Location Map for Amulsar Project

4.2
Property Description
The Amulsar project is comprised of three exploration permits or Prospecting

Permissions (PPs) and one mining licence. The three PPs, comprising; Saravan (No.
EHTV 29/043), Gorayk (No. EHTV 29/042), and Khatchkar (No. EHT-29/154), cover the
project and are presented in Figure 4.2. The Saravan and Gorayk licences were granted
by Ministry of Natural Resources in August 2007 with the Khatchkar PP granted in
January 2013.
In May 2009, a mining licence (No. SHATV-29/245) was granted by Ministry of Natural
Resources, and covers the Tigranes, Artavasdes and Arshak areas. Following an
application to extend the mining licence, an extension for 25 years was approved on
22 November 2011 providing that an approved work programme is undertaken and
mineral resources are depleted within 16.5 years. A new mining licence and rock
allocation area (RAA) was granted by Ministry of Natural Resources in September 2012.
The RAA is an area designated for plant infrastructure and industrial use.
Figure 4.2
Amulsar Project Land Tenure Map
Source: Lydian, 2013

4.3
Ownership
All PPs and mining licences are held 100% by Geoteam CJSC (Geoteam), an Armenian
registered Closed Joint Stock Company. Geoteam is owned 100% by Lydian Resources
Armenia (Lydian Armenia) a wholly-owned subsidiary of Lydian International Limited.
4.4
Tenement
Exploration and mining licences for the Amulsar project are summarized in Table 4.1.
The Saravan and Gorayk PPs were awarded to Lydian at auction, and were granted
under Armenian 2007 mining law providing five-years for exploration and two
extensions of two-years each, before a mining licence application needs to be
submitted. The Khachakar Prospecting Permission (PP) was awarded at auction under
the Armenian mining laws of 2012.
Table 4.1
Summary of Amulsar Project Licences
Licence Type
Name
Licence
Number
Previous Licence
Number
Holder
Grant
Date
Expiry
Area
[ha2]
Prospecting Permission
Saravan
EHTV
29/043
42
Geoteam
CJSC
08 August
2007
5
years
8340
Gorayk
EHTV
29/042
41
Geoteam
CJSC
08 August
2007
5
years
4700
Khachakar
EHT29/154
Geoteam
CJSC
31 January
2013
3
years
3116
Mining Licence
Amulsar
SHATV29/245
14/588
Geoteam
CJSC
03 April
2009
25
years
75.6
The new mining licence granted for the Amulsar project is valid until 2034, and permits
extensions to the licence as new resources are approved. The licence allows for a fouryear construction period starting from 26 September 2012, and requires mining
production to start at least 2.6 million tonnes per year.
4.5
Armenian Mining Legislation
The World Bank has advised the Armenian Government on revisions to the Mining
Codes, including royalties, which became part of the revised law adopted in January
2012. A mining licence is valid for a period of up to 25 years, but the actual term is
based on the mining plan submitted as part of the mining licence application, and the
time required to exploit the resource.
Application for a special mining licence (SML) can be submitted at any time. The holders
of an SML have the entitlement to convert the prospecting licence to a SML upon
application. SMLs are current for a period from twelve to twenty-five years, but can be
extended upon application by the licensee.
4.6
Royalties
As part of the January 2012 revisions to the mining law, a government royalty was
introduced and the royalty fee is calculated as percentage of revenue from sales of

metal concentrates. If a company sells a cast product, or a product further converted

from concentrate, the revenue amount will be adjusted as per the following formula
provided by Government of Armenia.
R= 4+(P/(I*8))*100, where; R is royalty in percentages
P is profit before tax
I is income (revenue) from sales
The royalty is calculated on an annual basis, but quarterly pre-payments must be made.
4.7
Newmont Joint Venture Agreement
On 23 April 2010, Lydian purchased from Newmont Mining Corporation all of Newmonts
interest in the former joint venture between Lydian and Newmont known as the
Caucasus Venture, including all of Newmonts interest in the Amulsar gold property in
Armenia. The consideration was a mixture of committed and contingent payments. The
committed payments included the issuance by Lydian of three million ordinary shares to
Newmont on the closing of the transaction, and three payments of US$5 million, of
which; the first was paid in 2010, the second was due on 31 December 2011 and paid
on 13 March 2012, together with interest owing thereon; and the third became due on 31
December 2012. Lydian has notified Newmont that it has decided to defer making this
third instalment payment until no later than 31 December 2013. This deferred payment
amount of US$5 million will bear interest at the rate of 10% per annum, commencing 31
December 2012 until it is paid.
In addition, Lydian agreed to pay Newmont, following the start of commercial production
at the Amulsar project, a 3% net smelter royalty (NSR). However, at any time prior to the
date, that is 20 days following commencement of commercial production, Lydian may at
its option, elect to buy out the 3% NSR and instead pay to Newmont the aggregate sum
of US$20 million, without interest, in 20 equal quarterly instalments of US$1 million,
commencing on the first-day of the third calendar month following the start of
commercial production. Furthermore, Lydian has a one-time option prior to the
commencement of commercial production to prepay these quarterly instalments in a
single cash payment, using an annual discount rate of 10%. This equates to a single
payment of approximately US$15.6 million.
4.8
Environmental
There are no special environmental restrictions or known past liabilities in respect to the
Amulsar project area. Lydian is required to operate under normal environmental
regulations, as set out by the relevant Armenian authorities. Lydian has all the
necessary permits to undertake exploration and initial development work at Amulsar,
which are:
Permits for exploration activities
Mining licence (Tigranes and Artavasdes)
Water use permits
Air emission permit

Environmental impact assessment for exploration activities, open pits, waste dump
facility and heap leach facility.
Geoteam submitted a number of environmental impact reports (EIA) for exploration

activities and mining activities to the Concession Agency of Ministry of Energy and
Natural Resources (MENR) of the Republic of Armenia, support for exploration permits
and mining licence applications, and to the Ministry of Nature Protection (MNP) between
2009 and 2013.
The reports to MENR are submitted on an annual basis, and are focused totally on the
activities carried out per the work plan attached to the licence or permits and a section
on the environment.
The reports submitted to the MNP are done on a quarterly basis, and one annually that
summarizes the previous four ones. These are related to the environmental payments,
e.g. water consumed, air emissions, etc. After every approval from the regional
environmental inspectorate based in Vayots Dzor Marz, Geoteam makes respective
payments.
Lydian completed its first environmental impact assessment (EIA) for the Tigranes
deposits in December 2009. The EIA was one of the reports that supported the mining
licence application.
In December 2011, Lydian conducted an EIA on the conceptual design of a heap leach
facility (HLF) for the proposed operation located in the Vorotan Valley. The EIA covered
the conceptual design of crushers, conveyor, heap leach pad and plant, with the
respective locations. The EIA was presented to the public on 28 November 2011. In
December 2012, Geoteam was granted approval on the HLF location from the MNP.
The EIA approval for open-pit mining for the Tigranes/Artavasdes areas and the location
of the waste dump facility was approved in July 2012. The EIA for the Erato deposit will
be submitted for approval by the MNP before the end of 2013.
The EIA submission for the open pit and the waste dump facility is part of the mining
licence application requirements. EIA approvals are also required by the MNP, including
additional EIAs for other parts of the infrastructure like crushers, conveyors, and the
metallurgical processing plant facilities.
In parallel, Lydian is preparing an Environmental and Social Impact Assessment (ESIA)
in line with Equator Principles in order to meet requirements of shareholders, the
International Finance Corporation (IFC), and the European Bank for Reconstruction and
Development (EBRD), and to be able to raise international financing for the project
construction and operation. The ESIA is expected to be available for public disclosure in
August 2013.

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND

PHYSIOGRAPHY
5.1
Accessibility
The Amulsar gold project area is readily accessed from the national M2 highway which
passes near the project concessions. The M2 highway is the main connector for travel
from Yerevan to Iran. Road access from Yerevan to the Amulsar project is
approximately 170 km of sealed highway and 15 km of gravelled local secondary roads.
A currently unused airstrip is located at a nearby resort town of Jermuk, approximately
45 Km from the project. The nearest international airport is at Yerevan, with daily
scheduled international flights from Europe and Asia.
Lydian exploration work routinely operates from April to mid-December. Exploration
activity during the winter period is generally limited between December and March by
snowfall in steep mountainous portions of the project areas.
5.2
Physiography
The Amulsar project area is located in mountainous terrain with rounded peaks and
ridges. A dominant north-westsouth-east trending ridge extends about 7 km across the
property. The ridge attains a maximum elevation of 2,988 m. Vegetation cover across
the project consists of scrublands dominated by wild grasses and isolated shrubs. There
is good access over the property by drill roads and trails. Typical terrain for the project
area is shown in Figure 5.1.
Armenia lies within a seismically active zone, with some areas having a high risk of
major earthquakes. The last major quake was in 1988 in northern Armenia. The Amulsar
project area is seismically active, with the most recent destructive earthquake being
recorded in September 1931, at the township of Sisian some 30 km to the south-east of
the prospect area. Destructive earthquakes have also been recorded in the ancient city
of Vayk, some 20 km to the west.

Figure 5.1
Typical Amulsar Physiography
Source: AMC, 2012

Notes:
A. Erato and Tigranes areas, looking north-west.
B. Arshak and Artavasdes areas, looking west
5.3
Climate
The Amulsar area is characterized by a highland continental climate with generally hot
summers and cold winters. Temperature varies significantly depending on altitude.
Mean summer temperatures at the Amulsar project are 25 C, with a maximum of 34.2 C,
and mean winter temperatures are around -4 C, with a minimum of -27.6C as
recorded since 1962 at the Vorotan Pass state weather station. Annual precipitation is
low, with an average in the order of 700 mm. Snow falls across higher ground during the
winter months, and can remain from early November through to late March. Because of
the altitude, Amulsar Mountain is snow-covered for the winter months. At present,
10

access is generally possible only from March to November, and access for heavy
machinery is confined to the period from May to October/November.
5.4
Infrastructure
The Amulsar project infrastructure is generally well-developed with good road and power
networks. The Armenian M2 highway connects the project from Yerevan, and borders
the project to the south-west. The village of Gorayk is located just off of the M2 highway,
south of the project. Gravel roads provide local access to the project and the towns of
Jermuk to the north and Gorayk to the south. A map of infrastructure for the Amulsar
project is shown in Figure 5.2.
A high-tension power line transects the southern limits of the project licence areas. Two
power substations rated at 35 KVA and 110 KVA are located near the village of Gorayk.
A major gas pipeline from Iran to Armenia crosses the prospecting licences on the
eastern and north-eastern portions of the project. A fibre-optic communications line
passes through the east and north-eastern parts of the project licences.
Figure 5.2
Amulsar Project Infrastructure
11

HISTORY
Due to its geological location, within a tectonically active collision zone between the
Arabian and Eurasian plates, Armenia has been endowed with large porphyry-style
copper-molybdenum deposits, and polymetallic and gold-bearing vein systems. Largescale metal production began in the early 19th century with the opening of the Alaverdi
and Kapan polymetallic mines. In the 1950s, the Zangezur Copper-Molybdenum
Combine developed the world-class Kajaran deposit in the south of Armenia, which
produces 3% of the worlds molybdenum output. The dissolution of the Soviet Union
coupled with low metal prices, severely disrupted Armenias mining industry in the
1990s, but a new legislative framework and improved market conditions led to a
significant upturn over recent years. Metal production comes from:
Kajaran (Cronimet) and Agarak (GeoProMining) copper-molybdenum porphyry

deposits;
Kapan vein-type polymetallic deposit (Dundee Precious Metals) and the

Shahumyan polymetallic deposit;
Zod gold mine (GeoPro Mining)
Foreign mineral exploration companies active in Armenia include Global Gold, Caldera
Resources, and Anglo African Minerals.
The Amulsar region was initially identified by the Armenian Soviet Expedition in
19361937 as an area of secondary quartzite, which was deemed to host potential as
a silica resource. Work aimed at testing the potential of a silica resource commenced in
1946, with the development of small-scale exploration adits. This work concluded that
the alunite content of the silica was too high (up to 25%) and that, as such, the project
was of no interest as a source of quality silica. Further work in the early 1960s identified
the secondary quartzite as metasomatic in origin, developed due to the replacement of
intermediate-composition volcanic rocks (known regionally as the Amulsar Suite). Some
300 m of tunnelling and 640 m3 of trenching were also completed during this time,
mostly on the north-eastern side of the Amulsar ridge. Testing of a bulk sample
concluded that the silica was of sufficient quality for the production of low-grade glass.
Volumetric calculations made during this time estimated some 360 Mt of secondary
quartzite rock at Amulsar.
Research work by the Soviet Expedition continued at Amulsar during the period
19791982. This work was focused principally on understanding and mapping the
alteration zonation across the area. Silica reserves at Amulsar were never entered onto
the Republic of Armenia State Balance, and no further exploration or research work has
been conducted by the Soviet Expedition in the area since 1982.
12

GEOLOGICAL SETTING AND MINERALIZATION
7.1
Regional Geology
The Amulsar gold deposit is situated in south-central Armenia and is hosted in an Upper
Eocene to Lower Oligocene calc-alkaline magmatic-arc system that extends north-west
through southern Georgia into Turkey, and south-east into the Alborz-Arc of Iran.
Volcanic and volcano-sedimentary rocks of this system comprise a mixed marine and
terrigenous sequence that developed as a near-shore continental arc between the
southern margin of the Eurasian Plate and the northern limit of the Neo-Tethyan Ocean.
In the Early Oligocene the Neo-Tethyan Ocean closed, and subduction ceased along
this margin when a fragment of continental crust, known as the Sakarya continent,
collided at the trench axis and accreted with the Eurasian plate. The location of Amulsar
within this arc is shown in Figure 7.1.
7.2
Local Geology
The Amulsar deposit is hosted in a sequence of Eocene-Oligocene volcanogenic rocks

of basaltic to dacitic composition, containing two distinct volcano-sedimentary cycles.
The Lower Volcanic unit (LV) is dominated by massive porphyritic andesite. The unit
also contains abundant coarse volcaniclastic members in some project areas. The
Upper Volcanic unit (UV) is characterized by coarse volcaniclastic breccia occurring
within debris flow channels, incised into a thick package of finer-grained volcanogenic
rocks, including immature feldspathic sandstone. Andesitic lava flows form a minor
component and also appears to occur in erosional channels.
The UV unit lies disconformably over the LV unit, with clasts of the two units occurring at
the contact between the two units, forming what has been termed the mixed breccia
lithological unit. This lithological unit is believed to represent a paleoweathering surface.
The geology of the Amulsar project area is shown in plan in Figure 7.2 and geological
cross-sections in Figure 7.3 to Figure 7.6.
13

Figure 7.1
Regional Geology, Upper Eocene to Lower Oligocene Calc-Alkaline

Magmatic Arc System
7.2.1
Alteration
The LV unit is characterized by pervasive argillic alteration in the region of the resource.
However, this alteration reduces toward the periphery of the licence area. The argillic
alteration is commonly void of gold mineralization, other than at a contact with the UV
unit, or occasionally where through-going faults crosscut the LV unit. In both cases, a
marked increase in iron-oxide and weak silicification can also be observed. Alteration
within the UV unit is predominantly massive silica or silica-alunite, forming the main host
to gold mineralization. The pervasive argillic alteration of the Lower Sequence appears
14

to be cut by the disconformity, which implies that the two alteration styles are unrelated
in time.
7.2.2
Structure
Pervasive host fracturing occurred during an interval of both east- and west-directed
thrusting, producing a broad mild antiformal fold across Amulsar project area. The
abundance of host fracturing is likely controlled by the differential strength increase
produced by the focusing of pre-mineralization silica-alunite alteration into the porous
breccia units. Mineralization is focused within a local zone of highly complex deformation
near the crest of the antiform, where complex smaller-scale duplexes of both verges
have interleaved parts of the Lower Volcanic with the Upper Volcanic sequences. At
least two intervals of post-mineralization extensional faulting dissect the antiformal
structure, such that the original mineralizing system is now preserved within large
discrete north-easttrending grabens that cross the antiform. These larger structures
have been disrupted by north-westtrending extensional faults.
7.2.3
Mineralization
Gold mineralization at Amulsar is thought to have been a late event in the development
of the deposit, occurring dominantly within the silica-alunite-altered volcano-sedimentary
breccia units of the UV unit. Mineralization is also associated with iron oxide-coated
fracture surfaces, and heavily oxidized faults that cut the silica-alunite alteration. Based
on a structural study of the deposit by Holcombe (2013), gold mineralization is believed
to be associated with iron oxide coatings, fillings, and hydraulic breccias in late stage
brittle fractures and faults within a thrust and fold complex.
Three dominant controls of mineralization have been identified:
Faults and fractures acting as conduits for mineralizing fluids, resulting in gold
mineralization as gossanous veins that form broad corridors of closely-spaced
high-grade structures;
Porous and permeable lithological units, including hydrothermal breccias,

volcaniclastic breccias, leached vuggy volcanics allowing lateral migration of
fluids away from structurally controlled conduits;
Relatively impermeable argillic altered LV rocks formed an impermeable boundary

along contact zones with UV rocks, causing ponding of higher-grade gold
mineralization along contacts, often forming as leached or gossanous zones.
Examples of gold mineralization in drill core are shown in Figure 7.7.

Silver mineralization is present at the Amulsar project, but the genesis and distribution of
is not well understood. Silver mineralization does not correlate with gold mineralization.
Average silver grades range from 2 g/t to 5 g/t and locally can occur in the 100 g/t to
200 g/t range.
A small silver mining project adjoins the Amulsar licence to the north-west, exploiting a
structurally controlled argentiferous galena vein. This deposit is located at a lower
stratigraphic level than the Amulsar deposit.
15

Figure 7.2
Geological Map of Amulsar Project

Note: Cross-section lines shown on map
16

Figure 7.3
Amulsar Geological Cross-section A-A, Erato Area
Figure 7.4
Amulsar Geological Cross-section B-B, Tigranes Area
17

Figure 7.5
Amulsar Geological Cross-section C-C, Artavasdes
Figure 7.6
Amulsar Geological Cross-section D-D, Erato and Tigranes Areas
18

Figure 7.7
Examples of Gold Mineralization in Core Samples, Drillhole DDA-047
Notes:
A: Brecciated UV unit, highly altered, strong iron oxidization, 96.1 to 96.5 m, 96.0-97.0 at 5.67 g/t Au.
B: Brecciated UV unit, highly altered, strong iron oxidization, 97.0 to 97.1 m, 97.0-98.0 at 13.7 g/t Au.
19

DEPOSIT TYPES
The Amulsar project is a high sulphidation epithermal deposit, but its close association
with syn-depositional deformation adds a signature also characteristic of orogenic gold
systems.
The Amulsar deposit is hosted in a thick pile of volcanogenic rocks thought to be related
to the Tethyan magmatic arc/back-arc system. High sulphidation epithermal deposits are
associated normally with alteration grading from a central zone, dominated by silicaalunite alteration minerals, to an outer zone of argillic-kaolinite alteration mineral
assemblages. At Amulsar, a similar sequence of alteration is observed, but the silicaalunite zone appears to be restricted to the mineralized volcaniclastic and breccia rocks
of the upper volcanic unit, and the argillic-kaolinite alteration is dominantly restricted to
rocks of the lower volcanic unit. Both rock units are now strongly structurally interleaved,
and mineralization is associated with subsequent deformation of this interleaved
package.
The background alteration is characteristic of high sulphidation epithermal systems, in
which, fluids rich in magmatic volatiles cool and migrate to elevated crustal settings. The
fluids are commonly highly oxidized. Mineralization at Amulsar is associated with iron
oxides iron sulphides have not been observed in significant quantities within the
mineralized structures. Thus, these are oxidised fluids. The lack of micaceous alteration
minerals associated with the gold mineralization indicates that fluid temperatures were
likely less than 300C, and within the range of temperatures associated with epithermal
deposits. These oxidized fluids were injected into faults, fractures, and dilatant
structures during an orogenic deformation that overprints the high sulphidation
alteration. However, the general absence of veining, and in particular, quartz veins, is
atypical of most orogenic gold systems.
The Amulsar deposit was likely developed within a volcanic edifice with a protracted
high sulphidation fluid history that gradually developed into an epithermal level orogenic
gold system that was perhaps still being fed by highly oxidized magmatic fluids.
As the Amulsar deposit can be considered as a hybrid deposit type, there are few
deposit types or examples that are similar.
20

EXPLORATION
9.1
Introduction
Initial exploration of the Amulsar gold project started in 2007 and was conducted by a
joint venture between Newmont Mining Corporation and Lydian. After Lydian acquired
full ownership the project in 2010, all exploration work was completed by Lydian.
9.2
Newmont Joint Venture (20072010)
Newmont completed approximately 150 line Km of ground magnetic surveys, with lines
spaced at 100 metres and 200 metres. A total of 54.6 line Km of induced polarization
and resistivity surveys were also completed by Newmont during the joint venture period.
Details of the geophysical surveys are discussed in a CSA (2011) report.
9.3
Lydian (2010-2012)
subsidiary in Armenia. Geoteam has conducted limited geophysical work over the
property since the acquisition of the property, being limited to developing threedimensional modelling of Newmont magnetic and resistivity data, the results of which
were used successfully to generate targets for exploration drilling.
Geoteam has completed an extensive programme of surface geological mapping over
the project. In conjunction with the surface mapping programme Geoteam has collected
approximately 358 (1,337 m) surface channel samples and 171 (50 m) trench samples.
Lydian commissioned a structural geological study of the deposit by Dr Rod J Holcombe
in early 2012. The study included three visits by Dr Holcombe and associates to review
drill core and reverse circulation chips, surface geological and structural mapping, and to
review drillhole structural data. This study resulted in a major revision of the geological
understanding of the deposit which required recoding and re-logging of core and reverse
circulation chip samples. A three-dimensional conceptual model of the deposit was then
generated based on re-logging data and the integration of surface mapping and drillhole
data.
Dr Holcombe recognized two major volcanic sequences (upper and lower volcanic units)
for the deposit, and also identified a complex structural framework, including thrust and
folding events.
9.4
9.4.1
Methodology
Channel Samples
Geoteam collected 358 channel sample lines, for a total of 1,337 metres of sampling.
Channel samples are cut from out crop faces that were cleared of vegetation, talus and
loose rock. An angle grinder with two diamond saw blades were used to cut a channel
into the rock face approximately 3 cm wide and 2 cm deep. Perpendicular cuts were
made to facilitate sampling which was undertaken using a hand chisel and a hammer.
The average sample length of channel samples is about 2 metres with approximately
21

99% of samples less than 3 metres in length. A location map of channel samples
collected for the project is provided in Figure 10.1.
All channel samples collected were transported to the Gorayk core shed facilities by
Geoteam staff.
9.4.2
Trench Samples
Geoteam excavated trench samples to a depth of two metres. Samples were collected
at the base of the trench at 1 and 2 metre intervals. A total of 171 samples were
collected from trenches. Trench samples were not used for the modelling of geological
units, or for the estimation of resources.
22

10
DRILLING
Lydian has explored the Amulsar deposit using a combination of diamond and reverse
circulation drilling. Drilling has been undertaken from 2010 onwards, and is currently
scheduled to start up in early May 2013.
Drilling for the Amulsar project has been carried out by Drill-Ex International from 2010
to present, with reverse circulation holes drilled by Vahan Atlas Copco for 2012 only.
Depending on availability, drilling on the project is carried out using two diamond rigs
and two reverse circulation rigs. In addition to exploration drilling, Lydian has completed
19 (1,563 m) water holes, 9 (1,098 m) metallurgical holes, and 101 (1,831 metres)
geotechnical holes. A summary of drilling completed on the project up to mid-December
2012 is summarized in Table 10.1. A map of drillhole collar and chip sample locations is
provided in Figure 10.2. AMC observed Lydian diamond drilling in operation during the
site visit, as shown in Figure 10.2.
10.1 Newmont Joint Venture (20082010)
Exploration under the joint venture was comprised of diamond core drilling, reverse
circulation drilling, and geophysical surveys completed from 2008 to early 2010. During
this period exploration drilling was carried out in the Erato and Artavasdes-ArshakTigranes areas. A total of 31 diamond core (4,363 m) and 175 reverse circulation holes
(22,809 m) were completed.
10.2 Lydian (20102012)
subsidiary in Armenia. From 2010 onwards Geoteam has conducted an aggressive
programme of core and reverse circulation exploration drilling over the Artavasdes,
Arshak, Tigranes and Erato areas, completing a total of 218 and 317 core and reverse
circulation drilling, for a total of drilled distance of approximately 33,422 m and 45,476 m
respectively.
23

Table 10.1
Summary of Drilling Completed for the Amulsar Project
Year
Number of
Holes
Metres
Drilled
2007
593
DDA-001 to DDA-005
AAT*, ERATO
2008
18
2,680
DDA-006 to DDA-023
AAT, ERATO
74
10,363
RCA-001 to RCA-074
AAT, ERATO
1,090
DDA-024 to DDA-031
AAT, ERATO
101
12,446
RCA-075 to RCA-175
AAT, ERATO
46
7,282
DDA-032 to DDA-078
AAT, ERATO
184
2009
2010
2011
Exploration
Area
Drillhole Series
DDAW-001 to DDAW-0041
2
Waste dump
421
129
16,742
DDAM-068 to DDAM-071
AAT, ERATO
RCA-176 to RCA-302
AAT, ERATO
294
RCAW-286 to RCAW-2891
AAT, ERATO
114
13,443
677
DDA-079 to DDA-270
DDAM-130 to DDAM-1742
AAT, ERATO
AAT, ERATO
AAT, ERATO
921
DDAG-170 to DDAG-193
67
769
DDAGLP-189 to DDAGLP-2693
AAT, ERATO
142
22,014
RCA-304 to RCA-455
AAT, ERATO
1
12
1,085
RCAW-399 to RCAW-408
78
12,697
DDA272 to DDA-374
AAT, ERATO
26
141
DDAG-287 to DDAG-3713
Crusher, waste
dump
46
6,720
RCA-456 to RCA-500
AAT
Total RC Holes
383
40,897
Total Diamond Core Holes
507
69,664
Total
890
110,561
2012
AAT
*AAT, Artavasdes, Arshak, Tigranes exploration areas.

1
Water holes
2
Metallurgical holes
3
Geotechnical holes
24

Figure 10.1
Location of Drillholes and Chip Samples
25

Figure 10.2
Drilling Operations Amulsar Project
Note: Truck-mounted diamond core wireline rig and diesel electric generator.
10.3 Drilling Methodology

Drillholes were drilled on grid patterns of 40 m intervals for closely-spaced drilling and
80 m or more at the peripheries of identified mineralized zones. Drillholes were drilled
vertically or inclined at about -60 o. Inclined drillholes were drilled mainly at azimuths of
120 or 300. Exploration drilling was conducted to a maximum depth from surface of
about 350 m.
All drillholes collars are initially positioned by geological personnel using a hand-held
GPS. Drillhole collar locations are marked with pegs and flagging tape to indicate the
azimuth direction.
10.3.1
Drillhole Collar Coordinates
Drillhole collars for diamond and reverse circulation holes on the Amulsar project are
surveyed by Geoteam surveyors. The survey coordinate system is UTM Zone 38N,
WGS84 datum. Total station survey equipment is used for all surveys. After the
completion of drilling, all drillhole collar positions are marked with a concrete base and a
projected PVC pipe. Drillhole numbers are clearly marked with metal tags on each
concrete base and attached to the top of the PVC pipe as shown in Figure 10.3.
26

Figure 10.3
10.3.2
Drillhole Marker for RCG-001
Downhole Surveys
Downhole surveys are conducted by the drilling contractor using Globaltech Pathfinder
single-shot survey instruments. Drillholes were surveyed at approximately 20 m to 30 m
intervals for most holes. Downhole survey data for each hole is reviewed by geological
personnel before being entered into the drillhole database system.
Core orientation surveys are routinely completed by Geoteam personnel on all diamond
core holes. Geoteam uses the EzyMark core orientation system for orientating drill core.
Measurements are made at approximately 30 m intervals for the entire length of the
drillhole. Each orientation survey is scrutinized by the Rig Geologist. If the survey fails,
another orientation survey is completed in the following run. Each EzyMark Ori-Block is
placed in the core box where the orientation measurement was made.
27

10.3.3
Diamond Core Drilling Protocols

for diamond drilling procedures. Diamond drilling operations are supervised by Geoteam
geologists at the drilling site.
Diamond drillholes are drilled with a number of core sizes, including PQ (85 mm core
diameter), HQ (63.5 mm), and NQ (47.6 mm) size core.
Core is transferred directly from the core barrel to plastic core boxes. Wooden markers
are placed between runs recording the drilling depth. All core boxes are labelled with
drillhole number, starting and ending depths for the core box, and box number. Core is
logged by Geoteam Geologists at the drill site. At the end of each shift, core boxes are
delivered to secure core shed facilities at Gorayk.
Diamond drilling core recovery averages 96% for the project. Approximately 90% of drill
core intervals have a core recovery of greater than 90%. Approximately 5% of
exploration drillhole core do not have core recovery information excluding geotechnical
and metallurgical holes.
10.3.4
Reverse Circulation Drilling Protocols

for reverse circulation drilling procedures. All reverse circulation drilling is conducted
under constant supervision by the Rig Geologist.
Reverse circulation drilling is undertaken using a downhole hammers with face-sampling
drill bits. The diameter of drill bits used by Drill-Ex is 127 mm, while Vahan Atlas Copco
used a 139 mm drill bit.
The first few metres of reverse circulation drilling is open hole percussion (OHP) drilling,
using either hammer or tri-cone bits, or air coring, depending on ground conditions. OHP
drilling is used to allow PVC to be emplaced as casing, sealed by expanding polymer,
with the stuffing box secured over the end of the casing, for air return.
All drilling chips are collected from the reverse circulation cyclone. Wet samples are
recorded by the rig geologist and collected in poly weave bags to assist in drying of the
chip samples. The entire chip sample is delivered to the core shed facilities in Gorayk for
splitting and sampling.
10.4 AMC Comments
Protocols undertaken by Lydian for the Amulsar project, including drilling, core handling,
logging, and database preparation, have been undertaken using procedures that meet
industry standard practices. While reverse circulation sample recovery has been noted
in the previous report by CSA (2011) and IMC (2012), AMC believes that procedures
can be improved by routine monitoring of reverse circulation sample recovery for each
drillhole.
28

As the Amulsar project has been developed, a better understanding of the geological
and structural understanding has increased significantly. This process is typical of most
advanced exploration projects. In this process, the delineation and lithological and
structural units has necessitated reinterpretation of drillhole lithological data and
structural domains within the deposit. It is important to continue updating lithological
coding and continuing structural investigations to provide the basis for a resource
estimate with a high-confidence level.
29

11
SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 Sampling Method and Approach

11.1.1
Specific Gravity Measurements
Specific gravity measurements were made by Geoteam at the project core shed located
in the town of Gorayk. Measurements were restricted to diamond core samples only;
using full core intervals with an average length of 20 cm to 30 cm. Measurements were
made using a wax-sealed core water-immersion method. All core samples are dried
before measurements are taken. AMC understands specific gravity quality-control
measures are not regularly implemented for specific gravity measurements.
The equipment used by Geoteam to measure specific gravity is shown in Figure 11.1.
Figure 11.1
Station for Measuring Specific Gravity at Gorayk Core Shed

Facilities
30

11.1.2
Diamond Drill Core Samples
All diamond drill core is photographed and logged at the drill site. Logging is completed
at each drill site using hard-copy logging forms. Orientated core is reassembled and
marked with an orientation line, using a permanent marker. Geological logging includes
primary and detailed lithology units, alteration, porosity type, and iron sulphide and oxide
percentages, geological structures and their orientations using alpha and beta angles.
Geoteam Geologists log geotechnical core data including; rock quality designation
(RQD), fracture count, rock strength classification and core recovery for each drill run.
After logging, core boxes are delivered to the core shed facilities, core logs are reviewed
by senior geological personnel. Core samples are marked using coloured wax-markers
at one metre intervals, and may be adjusted at upper and lower volcanic unit contacts.
Core drillholes are mainly sampled along the full length, particularly in the Upper
Volcanic unit. In some cases, in the lower volcanic unit, intervals that are clearly
unmineralized are not sampled. Core cutting lines are marked 2 cm clockwise of the
orientation lines. Sample intervals are assigned sequential sample and quality-control
sample numbers by Geoteam technical personnel under supervision of Geoteam
Geologists.
Drill core is split at the core shed using a diamond saw. Prior to cutting each sample the
entire saw is flushed with water, including the catchment basin below the core tray. After
the sample is cut, rock fragments and fine particles from the core are collected in the
catchment basin and placed in a plastic sample bag, along with half the cut core, which
is placed in a cotton sample bag. For sample intervals with disaggregated core, half of
the material is taken directly form the core box. The remaining core is replaced in the
core boxes, which are stored securely in core racks at the core shed facility.
Quality-control samples are submitted at a frequency of about 1 in 20. This includes
core field duplicates consisting of quarter splits of sampled core, blank samples of
unmineralized sand, pulp duplicates, and certified reference material.
11.1.3
Reverse Circulation Hole Samples
Reverse circulation drilling samples are routinely collected at 1 m intervals. Drill cuttings
for each drilled metre are collected in plastic bags at the rig cyclone. Geoteam reports
that pressurized air blow-backs are routinely used after every metre of advance, so that
all the material within the drill stem is displaced into the sample bag prior to advancing to
the next metre. The entire samples are weighed, logged, bagged, labelled, and sealed
at the drill site. Geoteam Geologists log the reverse circulation chips in detail, including
primary and detailed lithology units, alteration, and iron sulphide and oxide percentages.
Representative chips for each interval are placed in plastic chip trays, which are marked
with drillhole number sample number and sample intervals. Samples and chip sample
trays are collected daily and transported to the core shed facilities for splitting and
archiving.
Samples are split at core shed facilities using a 1:8 riffle splitter to produce a 1.5 kg to
2 kg sample. The remaining chip sample material is stored at the facilities as an archive.
The riffle splitter is cleaned between samples by brushing and using compressed air.
Individual weights for the entire 1 m sample and the final sample were recorded. The
31

split sample is placed in a cotton bag, labelled, and delivered to the sample preparation
laboratory adjacent to the core shed facilities.
11.2 Sample Preparation and Analysis
Lydian has a sample preparation facility which is adjacent to core shed facilities at
Gorayk. The facility includes two jaw crushers, two rotary splitters, two high-capacity
pulverizers, and two drying ovens. Sample preparation facilities at Gorayk operated from
September 2008 to 2010, and then were restarted in late 2011. Prior to establishing this
facility, and during the period between 2010 and late 2011, all samples were sent to ALS
Romania SRL Laboratories in Rosia Montana (ALS Romania) for sample preparation. A
new, containerized, sample preparation facility, provided by ALS Chemex was installed
in late 2011. The Gorayk laboratory is owned and operated by Geoteam.
Core and channel samples are collected from the core shed area and placed directly
into drying racks which are moved into drying ovens. After drying at 110 C for about 12
hours, samples are crushed to -2 mm. For core samples, fragments and fines from
cutting the core are added at this stage to the core sample, and the combined sample is
passed through the crushers. After crushing, the material is transferred using crusher
bins to the rotary splitter where the sample is split to a sub-sample of approximately
2 kg. The entire 2 kg sample is pulverized and then split into 200 g250 g and 650 g
pulps, where the former is used for assays, the latter as reference. An additional
200 g250 g duplicate pulp is split from the pulverized sample at a frequency of 1 in 20.
Reverse circulation samples are pulverized in their entirety and are not usually passed
through the crushing stage. After pulverizing, the sample is split using a rotary splitter
into 250 g and 650 g pulps, with the former for assaying and the latter held by Geoteam
for reference. Similar to core procedures, a 200 g-250 g duplicate pulp is split from the
pulverized sample at a frequency of about 1 in 20.
Pulp samples for assaying are packed in boxes and shipped to ALS Romania
laboratories for gold assaying. On arrival, each sample is logged, weighed, and
assigned an individual bar code. A 50 g sub-sample is analysed at the Romanian
laboratory for gold by fire assay, with an AA finish. ALS Romania has been accredited,
by the Standards Council of Canada, on January 28 2013, with ISO/IEC 17025:2005 for
gold fire assays with atomic absorption and gravimetric finish (codes Au-AA, Au-GRA).
The remainder of the pulp samples are sent for analysis by inductively coupled plasma
mass spectrometry using a four-acid digestion. This analytical procedure assays 61
elements, including silver. Samples are sent to ALS Laboratories in North Vancouver,
Canada (ALS Canada Ltd), this laboratory is ISO/IEC 1702(code ME-ICP61).
11.2.1
Amulsar Assay Quality Control Procedures
Geoteam performs routine checks on laboratory submissions, upon import to the

drillhole management Century Systems, Fusion database. On an ongoing basis QA/QC
data is analysed using Fusion plots for standard, scatter, and quantilequantile plots.
Failures in quality-control data are identified by Geoteam Database Managers and
discussed with field geological personnel. Critical failures result in the resubmission of
32

assay batches, or ten samples that precede the failed sample. Quality-control samples
for gold assays are summarized in Table 11.1.
Quality-control samples are routinely submitted by Geoteam during all exploration
sampling programmes. For gold assays, five quality-control samples are submitted
independently of assay laboratory comprising of; field duplicates, pulp duplicates,
blanks, and certified reference material. Field duplicates consist of split core for diamond
drill samples and coarse rejects after the crushing of reverse circulation samples. Pulp
duplicates are submitted by sample preparation laboratory at Gorayk for both core and
reverse circulation holes. Umpire samples were submitted to Alfred H Knight Services,
St Helens, England, at the request of Independent Mining Consultants as outlined in
the report IMC (2012). Routine umpire samples are submitted to Acme Laboratories,
Vancouver, Canada.
Silver assay quality-control samples were limited to field duplicates for core and reverse
circulation samples, blanks and standards. Quality-control data for silver assays is
summarized in Table 11.1.
33

Table 11.1
Analyte
Gold
Summary of Laboratory Independent Assay Quality Control Samples

Quality Control
Sample
Standard
Certified Value
(g/t)
Ratio to Total
Assays
Field Duplicates Core
1017
1.0%
Field Duplicates RC
1618
1.6%
Pulp Duplicates
2635
2.6%
Blanks
2543
2.5%
Umpire Samples (AHK)
1210
1.2%
Umpire Samples (Acme)

Standards
1525
1.5%
6302-2
2.5
125
0.1%
G302-3
8.66
303
0.3%
G307-2
Silver
Number of
Samples
292
0.3%
G312-6
2.42
17
0.0%
G398-6
2.94
561
0.6%
G399-6
2.52
47
0.0%
G900-6
2.56
245
0.2%
6904-8
5.53
773
0.8%
G905-8
2.55
80
0.1%
GBMS 304
5.67
181
0.2%
GBMS 304-5
1.62
175
0.2%
GLG 302-2
0.01667
246
0.2%
GLG 304-1
0.15391
807
0.8%
GLG 307-1
0.00286
320
0.3%
GLG 911-1
0.003
48
0.0%
OXD57
0.413
54
0.1%
Total
14822
14.6%
Field Duplicates Core
1037
1.0%
Field Duplicates RC
1442
1.4%
Blanks
3356
3.3%
182
0.2%
187
0.2%
6204
6.1%
Standards
GBMS 304-5
0.8
GBMS 304-4
3.4
Total
11.3 AMC Comments

AMC recommends that quality-control procedures for specific gravity measurements
should be implemented. These procedures should include:
In-house standards that can be made from existing core these standards can be
measured daily or weekly, to ensure that equipment is accurate and that
measuring procedures are consistently implemented;
Periodic checks of electronic balance using standard reference weights;
Umpire specific gravity measurements.
34

AMC also recommends that criteria used for batch failures should be formalized into a
clearly outlined set of procedures. Although no sample preparation issues are evident, it
is recommend that procedures for transferring samples to the preparation laboratory can
be improved by the following procedures:
Packaging sample bags from the core shed into sealed barrels or large bags that
are then delivered to the laboratory;
Barrels or large bags are unpacked by laboratory personnel;
Barcodes are assigned to each sample that enters the laboratory and used to log
samples out of the laboratory.
AMC concludes that sampling and analytical techniques used for the Amulsar project
are appropriate for estimating resources. However, AMC suggests that the procedure of
adding fragments and fines from the core cutting process should be further investigated,
to determine if this material contains significant mineralization.
35

12
DATA VERIFICATION
12.1 Verification by Lydian

The Amulsar project data is maintained by Geoteam personnel using Century systems
Fusion database system. Geoteam personnel routinely verify drillhole data and assay
data. Detected database errors or inconsistencies are discussed with senior geological
personnel and rectified.
Data security and integrity is maintained by daily backups of the Amulsar database in
Geoteam offices in Yerevan, with systems at Lydian offices in St. Helier, Jersey.
12.2 Verification by AMC
12.2.1
Twinned Hole Review
AMC reviewed 14 sets of twinned diamond core and reverse circulation holes previously
reviewed by CSA (2011). AMC compared the lithological coding and gold assays for
each of these drillhole sets. The spacing between drillholes ranges from about 11 m to
less than 3 m. The drillhole were visually compared using Datamine mining software.
AMC concludes from this examination that there does not seem to be any significant
bias between assay values by lithology between diamond core and reverse circulation
drilling.
12.2.2
Potential Gold Assay Bias in Drilling Methods
AMC reviewed gold assays for reverse circulation and diamond core drillholes to
determine if there is a sampling bias between the two different types of samples. The
two datasets for the upper volcanic unit were examined using histograms, probability
plots and quantilequantile plots, using sample length-weighted gold assays.
AMC determined that summary statistics for the two datasets are not significantly
different. Similarly an examination of histogram, probability and quantilequantile plot for
the two datasets indicate that there is no significant bias. Histogram plots and
quantilequantile plots are provided in Figure 12.1 and Figure 12.2 respectively.
36

Figure 12.1
Histogram Plot for Gold Assays (Length Weighted) for Core (A) and
Reverse Circulation (B) Drillholes
37

Figure 12.2
12.2.3
QuantileQuantile Plot for Gold Assays (Length Weighted) for Core

and Reverse Circulation Drillholes
Site Visit
In accordance with National Instrument 43-101 guidelines, G. David Keller, P.Geo.,

visited the Amulsar Gold Project from 1214 December 2012. Mr Keller was assisted by
Geoteams Chief Geologist, Argam Snkhchyan.
The purpose of the site visit was to review the borehole database, validation procedures,
and exploration procedures; define geological modelling procedures; examine drill core,
interview project personnel; and arrange for receipt by AMC of all relevant information
for the preparation of a mineral resource model and the compilation of a technical report.
AMC briefly relogged core for 16 diamond drillholes. Drillhole DDA-116 was relogged
from top-to-bottom, while only mineralized sections for the other 15 diamond drillholes
were examined. In addition to diamond drillholes, the summary logging data for reverse
circulation hole RCA-450 was also reviewed. Lydian supplied drillhole lithology sheets,
including lithology and assay data for each of the drillholes examined, including an
updated summary of lithologies for the drillholes. Diamond core drill examined by AMC
is listed in Table 12.1.
As the deposit geology has undergone a number of reinterpretations, not all drillholes
have been updated to the current definition of major lithological units comprising Upper
Volcanic and Lower Volcanic units. The update and review of lithological codes by
38

Geoteam is in progress, but was not completed for all holes at the time of AMCs site
visit. Logging reviewed by AMC was found to be generally consistent. In some cases
lithological units were not identified correctly or needed to be reviewed on the basis of
Upper and Lower Volcanic unit classification. AMC understands that re-evaluation of
lithology in terms of the two broad volcanic units is in progress. Summary drillhole logs
are overall consistently logged, with minor inconsistencies. The Upper and Lower
Volcanic units are more difficult to identify on the basis of lithological logging that was
completed prior to the introduction of summary logs.
Diamond core and reverse circulation logging procedures, as discussed with Geoteam
personnel, are carefully undertaken, and meet best practice standards. A review of drill
cuttings from the reverse circulation chip library shows that Upper and Lower Volcanic
units are readily identified by these samples.
Access to the project drillhole locations was limited because of snow cover. However,
AMC was able to visit drillhole RCG-001. Using a hand-held GPS, AMC was able to
confirm the UTM coordinates of this drill site to within 3 metres.
AMC visited a diamond drilling operation for drillhole DDA-374. However, no reverse
circulation drilling was active during the time of the site visit.
Table 12.1
12.2.4
Drillholes Examined by AMC

DDA-020
DDA-126
DDA-352
DDA-027
DDA-135
DDA-362
DDA-058
DDA-313
DDA-367
DDA-076
DDA-331
DDA-368
DDA-096
DDA-348
DDA-116
DDA-358
Verification of Analytical Quality Control Data
Lydian provided assay quality-control data for gold and silver assays for the Amulsar
project. AMC reviewed the data using scatter plots, HRD, HARD, ranked HARD, and
quantilequantile plots to evaluate field duplicates, pulp duplicates and umpire samples.
Blank and certified reference material data were plotted on time-series plots using two
standard deviations as data limits for reference material plots.
AMCs review of gold and silver assay quality-control data indicates a high correlation
between assayed values and control sample assays for gold and silver. Excluding gold
core field duplicates, correlation coefficients exceed 0.93 for these datasets. Ranked
half absolute relative difference (HARD) plots show that 80% or more of the data is
within an absolute relative error of 10%, with the exception of core field duplicates.
Gold and silver core field duplicate data consists of a comparison of split core assay
values. Split core is expected to show more variation than other quality-control data.
Correlation coefficients for gold and silver are 0.91 and 0.92 which is acceptable for split
core data. Ranked HARD plot for gold indicate that 39% of data are within an absolute
relative error of 10%, and 70% of silver of silver data is within an absolute relative error
39

of 10%. AMC considers results for the core field duplicates to be well within acceptable
limits for these types of samples. Selected assay quality-control plots generated by AMC
are provided in Appendix A.
AMC concludes that assay analytical results for the Amulsar project are appropriate for
the estimation of mineral resources.
12.2.5
Assay Database Verification
AMC completed standard validation checks to ensure that the drillhole database
provided to AMC does not contain duplicated data, overlapping intervals, unmatched
drillhole identifiers, and incorrect data values. No matters of concern were identified.
AMC also completed a check of database assay values with assay certificates supplied
by Lydian, and a separate check with assay certificates sent directly from the assay
laboratories to AMC. AMC randomly selected assay values for validation. Approximately
10% of the gold and silver assays were checked with assay certificates supplied by
Lydian, and 2% of gold and silver assays were checked with assay certificates from the
analytical laboratories. No errors were found.
AMC concludes that the Amulsar project assay drillhole data provided by Lydian is
appropriate for the estimation of mineral resources.
40

13
MINERAL PROCESSING AND METALLURGICAL TESTING
A number of testwork programmes have been completed to date on bulk composite

samples from the Amulsar deposits.
13.1 SGS Lakefield Research (2008)
In September 2008, a gold recovery test programme was undertaken at SGS Lakefield
in Canada on a crushed continuous half drill core from the entire 146 m length of hole
DDA-004, a scout hole from the 2007 drill programme. The purpose of the programme
was to evaluate the response of the sample to basic metallurgical processes. A
summary of this work is contained in the SGS Lakefield March 2009 report, to which the
reader is referred.
The following results were achieved:
For all tests, a gold recovery of 90% was established after only 8 hours, and
reached 95% after 24 hours, both with modest to moderate sodium cyanide
(NaCN) consumptions.
The results suggested that the mineralization is amenable to heap leaching and
conventional whole ore cyanidation. The recovery of gold was in the range of
96%97%, leaving a residue assay of 0.030.06 g/t gold.
The reagent consumptions were very low, below 0.1 kg/t NaCN and 0.3 kg/t lime.
13.2 SGS Mineral Services UK Ltd. (2009)

During 2009, Lydian engaged SGS Mineral Services UK Ltd to conduct further testwork
(press release, 3 November 2009), focusing on coarser fractions and lower cyanide
concentration solution concentrations than previous testwork, and included column
leach tests on large fraction half-core to simulate minimal or no crushing.
The testwork was conducted on three master composites (labelled A, B, and C) of half
drill core samples from different parts of the Tigranes and Artavasdes areas. The
composites are differentiated by alteration style, and gold and multi-element distribution.
The three composites have head grades ranging from 1.09 g/t to 1.29 g/t Au.
Metallic screens of the composites show that >98% of the gold has a size fraction less
than 106 m. The results confirm the observations made in previous work, indicating
that a gravity concentration step is not warranted with insignificant coarse gold
component present.
Two different size fractions, 75 m and 2 mm, were used for cyanidation bottle roll tests.
13.2.1
-75 m Bottle Roll Leach Tests
Bottle roll leach tests were conducted at -75m to determine leach recoveries attainable
by conventional CIL. Results of the whole ore cyanidation bottle roll leach tests are
shown in Table 13.1.
41

Table 13.1
Whole Ore Cyanidation Leach Tests

Leach Period (hours)
%Au Recovery
Comp A
Comp B
Comp C
24
83.7
81.8
80.8
48
96.2
90.2
89.1
Cyanide and lime consumptions were in the range 0.050.10 kg/t and 1.131.32 kg/t
respectively.
13.2.2
-2 mm Bottle Roll Leach Tests
Bottle roll leach tests were conducted at -2 mm to determine leach recoveries attainable
by heap leach technology. Results of the coarse ore cyanidation bottle roll leach tests
are shown in Table 13.2. Cyanide and lime consumptions were in the range 0.080.09
kg/t and 1.061.20 kg/t respectively.
Table 13.2
Coarse Ore Cyanidation Leach Test

Leach Period (days)
%Au Recovery
Comp A
Comp B
Comp C
89.1
81.2
78.2
14
95.1
91.8
89.2
respectively.
13.2.3
Column Leach Tests
Column leach tests were carried out at crush sizes of -38 mm and -19 mm. The column
leach tests were carried out for a total of 144 days, at a crush size of -38 mm, and for 72
days at a crush size of -19 mm.
Results of the column leach tests at a crush size of -38 mm are shown in Table 13.3.
respectively. Results of the column leach tests at a crush size of -19 mm are shown in
Table 13.4. Cyanide and lime consumptions were in the range 0.100.13 kg/t and
0.901.14 kg/t respectively.
42

Table 13.3
Column Leach Tests (-38 mm)

Leach Period (days)
Table 13.4
%Au Recovery
Comp A
Comp B
Comp C
70
56.7
71.0
53.1
144
68.5
80.3
64.4
Column Leach Tests (-19 mm)

Leach Period (days)
%Au Recovery
Comp A
Comp B
Comp C
35
86.0
85.1
73.0
72
89.1
88.6
76.5
The results of the column leach test would tend to indicate that gold leach extraction is
dependent on the crush, or liberation size i.e. the finer the crush size the higher the gold
leach extraction.
A review of all final gold recovery results for all tests shows that, of the three
composites, composite A produced the highest level of gold recovery in all but the 38 mm column test. The overall final gold recovery attainable for each composite, and
testing of whole ore and coarse cyanidation bottle roll leach tests and column leach tests
is summarized in Table 13.5. The results show that there is a reduction in gold
extraction with increasing particle size.
These initial scoping testwork results suggest attractive processing economics of the
Amulsar project. Bulk mining of low-grade ore with a leach operation requiring only a
minor crush, or possibly ROM ore dump leaching, are feasible.
Table 13.5
Final Gold Recovery Summary by Test and Composite
Liberation Size
Test Type
% Au Recovery
Comp A
Comp B
Comp C
80% -75 m
Bottle roll
95.8
95.2
93.2
-2 mm
Bottle roll
95.1
91.8
89.2
-19 mm
Column
89.1
88.6
76.5
-38 mm
Column
68.5
80.3
64.4
13.3 Wardell Armstrong International (2010)

Previous testwork programmes undertaken by SGS have indicated that the gold
mineralization is readily processable using cyanidation leaching, with gold recoveries of
9497% being achieved after grinding to between 75 m and 150 m.
Column leach testing on two composite samples, designated A and B gave gold
recoveries of approximately 90%, at a crush size of 19 mm after 70 days of leaching.
Bottle rolls testing had indicated that gold recoveries of up to 94.7% were achievable at
a crush size of -12 mm.
43

Lydian commissioned WAI to undertake a further programme of laboratory testwork on

samples from the Amulsar deposit, through further bottle rolls and column tests on the
two composite samples originally tested by SGS. The testwork generally focused on
leaching at finer crush sizes and using higher cyanide concentrations than were used in
the SGS testwork.
The two samples tested were Sample A (HWA 149, weighing 120 kg) and Sample B
(HWA 150, weighing 330 kg).
WAI were commissioned by Lydian to undertake a programme of laboratory testwork on
samples from the Amulsar deposit. The test programme consisted of bottle rolls and
column leach tests and focused on leaching at finer crush sizes and using higher
cyanide concentrations than had been used previously. The two samples tested were
Sample A (HWA 149, weighing 120 kg), and Sample B (HWA 150, weighing 330 kg).
The programme of column testwork was undertaken using cyanide concentrations of
0.075%, 0.050% and 0.025%. The crush sizes investigated were 38 mm, 25 mm, 18 mm
and 12 mm. The columns were irrigated at a rate of 10 l/m2/h, and the leach period was
68 days. The column leach test results are given in Table 13.6.
Table 13.6
Column Leach Test Results Summary

Sample
Crush Size (mm)
% Cyanide Concn.
% Au Recovery
25
0.05
91.9
19
0.05
93.5
12
0.05
94.8
38
0.05
88.6
25
0.05
88.6
25
0.075
89.1
19
0.025
89.2
19
0.05
93.1
19
0.075
92.3
12
0.025
89.3
12
0.05
90.7
12
0.075
94.9
Based on the results in Table 13.6, it can be concluded that the optimum crush size for
both samples is probably 19 mm, and the optimum cyanide concentration is 0.05%;
although further testwork is required to substantiate this.
Tests using the higher cyanide concentrations also gave higher cyanide consumptions
and the additional gold recovery achieved needs to be related to the additional cyanide
costs. The same is true for the additional capital and operating costs of crushing to the
finer sizes.
The outcome from these tests provided an indication of metallurgical performance with
respect to gold and silver leach recoveries, as well as reagent consumptions. It was
concluded that the Amulsar ore types were amenable to processing using heap leach
44

technology, and both a high gold leach recovery and low reagent consumptions were
achievable.
13.4 Wardell Armstrong International (2011)
The December 2011 WAI testwork programme consisted of coarse cyanidation bottle
roll leach and column leach tests. The testwork programme was conducted on master
composites representing Tigranes, Artavasdes and Erato, plus the four main rock types
to determine any metallurgical variability.
Based on these tests it was concluded that the optimum crush size was -12 mm. Gold
leach recoveries for the Tigranes, Artavasdes and Erato master composites were
89.5%, 95.1% and 97.7% respectively, after 47 days of leaching. The variability column
leach tests conducted on pervasive iron oxide, siliceous breccias, fault gouge, and
gossan rock types showed respective gold leach recoveries of 96.6%, 85.9%, 92.4%
and 84.4%.
Average cyanide consumption for the master composite column leach tests was
0.47 kg/t ore.
13.5 Kappes Cassiday & Associates (2012)
As part of the testwork requirements for the Amulsar Feasibility Study, Kappes
Cassiday and Associates (KCA) carried out a metallurgical testwork programme
consisting of fine cyanidation bottle roll leach (simulating conventional CIL), and column
leach tests (simulating heap leaching).
The testwork programme was conducted on master composites prepared from selected
intervals taken from bulk ore samples, half and whole core representing Tigranes and
Artavasdes drillholes located within the starter and final pit shells.
The fine bottle roll cyanidation leach tests were conducted at -75 m, whilst the column
leach tests were conducted at 100% passing 12.5 mm. Results of the fine bottle roll
cyanidation leach tests and column leach tests are summarized in Table 13.7 and Table
13.8.
45

Table 13.7
KCA
Sample
No.
KCA
Test
No.
Fine Cyanidation Leach Tests (Tigranes/Artavasdes)

Description
Liberation
Size (mm)
Head
Average
gms
Au/MT
Calc.
Head,
gms
Au/MT
Extracted
gms
Au/MT
Avg.Tails
gms
Au/MT
% Au
Extracted
Leach
Time
(days)
Consumption
NaCN
kg/MT
Addition
Ca(OH)2,
kg/MT
Bulk Sample
Composites
61723
61737A
TM-1 thru TM-18
-0.075
4.470
4.317
3.987
0.330
92%
0.63
2.00
61724
61737B
ATM-1 thru ATM-26
-0.075
0.647
0.641
0.576
0.065
90%
0.44
1.00
0.528
0.594
0.582
0.012
98%
0.17
1.00
Split Core
Composites
61730
61765A
DDA-018
-0.075
61731
61765B
DDA-022 and DDA-055
-0.075
0.500
0.430
0.400
0.029
93%
0.07
1.00
61732
61765C
DDA-033
-0.075
0.997
0.947
0.927
0.020
98%
0.28
2.00
61733
61766A
DDA-035 and DDA-055
-0.075
1.059
1.178
1.130
0.048
96%
0.17
1.50
61734
61766B
DDA-046 and DDA-076
-0.075
1.497
1.401
1.370
0.031
98%
0.30
2.50
61735
61766C
DDA-055
-0.075
1.044
1.081
1.060
0.021
98%
0.26
1.50
61736
61766D
DDA-076
-0.075
2.413
2.536
2.468
0.068
97%
0.31
1.50
1.312
1.348
1.290
0.058
96%
0.13
2.00
Whole Core
Composites
61768B
62501A
DDAM-130
-0.075
61769B
62501B
DDAM-137
-0.075
1.557
1.520
1.470
0.050
97%
0.24
1.50
61770B
62501C
DDAM-140
-0.075
1.403
1.490
1.421
0.069
95%
0.40
1.50
61771B
62501D
DDAM-148
-0.075
0.734
0.792
0.754
0.038
95%
0.28
1.50
61772B
62502A
DDAM-169
-0.075
0.461
0.408
0.379
0.029
93%
0.35
1.50
61773B
62502B
DDAM-174
-0.075
0.759
0.777
0.678
0.099
87%
0.56
2.50
46

Table 13.8
Deposit
Fine Cyanidation Leach Test Results

Sample KCA Sample
Number
Calculated Head
Assay g/t
Extraction
%
Reagent
Consumption kg/t
Au
Ag
Au
Ag
NaCN
Ca (OH)2
Tigranes
Bulk 61723
4.50
8.72
91
0.34
1.5
Artavasdes
Bulk 61724
0.67
4.11
89
48
0.12
1.0
Tigranes
Split Core - 61730
0.56
0.52
96
34
0.18
2.0
Artavasdes
Split Core - 61731
0.50
1.21
92
43
0.17
2.0
Artavasdes
Split Core - 61732
0.95
0.76
93
22
0.15
2.5
Artavasdes
Split Core - 61733
1.13
13.21
91
37
0.22
2.5
Tigranes
Split Core - 61734
1.64
1.30
97
73
0.32
3.1
Tigranes
Split Core - 61735
1.18
1.44
96
48
0.18
2.0
Tigranes
Split Core - 61736
2.44
0.47
97
30
0.23
1.5
Tigranes
Whole Core - 61768
1.27
1.35
92
20
0.14
2.0
Tigranes
Whole Core - 61769
1.60
1.16
92
<0.05
2.0
Artavasdes
Whole Core - 61770
1.38
4.77
85
0.17
2.0
Artavasdes
Whole Core - 61771
0.76
3.91
89
<0.05
2.0
Artavasdes
Whole Core - 61772
0.45
8.90
92
93
0.17
2.0
Tigranes
Whole Core - 61773
0.76
1.75
75
66
0.27
1.8
Average gold leach recoveries for the bulk samples, half core and full core column leach
tests were 90.0%, 94.6% and 91.9% respectively, after 6070 days of leaching. The
calculated gold recovery to dor for the Tigranes and Artavasdes deposits is 88.1%, and
86.3%. Silver recovery to dor for the Tigranes and Artavasdes deposits is calculated to
be 30.3% and 31.8% respectively.
Average cyanide and lime consumption for the column leach tests was 0.20 kg/t and
2.01 kg/t ore.
The gold leach curves for the bulk, half, and full core composites are represented
graphically in Figures 13.1 to Figure 13.3. These figures indicate that the leach kinetics
is rapid, with 70% of the recoverable gold leached within 10 days (40 days in full scale
heap).
47

Figure 13.1
Gold Leach Curves (Bulk Composite)
Figure 13.2
Gold Leach Curves (Half Core Composites)
48

Figure 13.3
Gold Leach Curves (Whole Core Composites)
13.6 Kappes Cassiday & Associates (2013)

As part of the testwork requirements for the updated mineral resource estimate for
Erato, KCA carried out a metallurgical testwork programme consisting of fine/coarse
cyanidation bottle roll leach (simulating conventional CIL), and column leach tests
(simulating heap leaching). The testwork programme was conducted on master
composites prepared from selected intervals taken from half core representing Erato
drillholes located within the starter and final pit shells.
The fine and coarse bottle roll cyanidation leach tests were conducted at -75m and 25 mm respectively, whilst the column leach tests were conducted at a P80 of -12.5 mm.
Results of the fine/coarse bottle roll cyanidation leach tests and the column leach tests
are summarized in Table 13.9 and Table 13.10.
Average gold leach recoveries for the half core column leach tests were 88.3%, after 62
days of leaching. The gold recovery to dor for the Erato deposit is 84.5%. Silver
recovery to dor for the Erato deposit is 14.9%. Average cyanide and lime consumption
for the column leach tests was 0.49 kg/t and 1.09 kg/t ore. The gold leach curves for
whole core are represented graphically in Figure 13.4. This figure indicates that the
leach kinetics is rapid, with 70% of the recoverable gold leached within 10 days (40 days
in full scale heap).
49

Table 13.9
KCA Column Tests

Calculated Head
Assay (g/t)
Extraction %
Reagent
Consumption (kg/t)
Deposit
Sample KCA Sample

Number
Au
Ag
Au
Ag
NaCN
Ca(OH)2
Erato
Split Core - 62513
1.12
2.23
87%
26%
0.62
1.51
Erato
Split Core - 2522
0.95
2.79
85%
18%
0.47
1.01
Erato
Split Core - 62525
1.01
2.67
88%
11%
0.50
1.01
Erato
Split Core - 62528
1.14
1.90
95%
14%
0.51
1.00
Erato
Split Core - 62531
0.80
2.16
93%
26%
0.41
1.00
Erato
Split Core - 62534
1.04
2.27
82%
25%
0.43
1.01
50

Table 13.10
Fine/Coarse Cyanidation Leach Tests (Erato)
KCA Sample
No.
KCA Test
No.
Description
Liberation
Size
Calculated
Head (gms)
Au/MT
Extracted
gms
Au/MT
Avg.
Tails,gms
Au/MT
Au
Extracted %
Leach
Time
(hours)
Consumption
NaCN kg/MT
Addition
Ca(OH)2,
kg/MT
62513
62537 A
DDA-030, 0.94 gms Au/MT
-12.5 mm
1.011
0.801
0.210
79%
96
0.19
1.10
62514
62537 B
-12.5 mm
0.849
0.642
0.207
76%
96
0.11
0.50
62515
62537 C
-12.5 mm
1.091
0.859
0.231
79%
96
0.13
0.70
62516
62537 D
-12.5 mm
1.101
1.005
0.096
91%
96
0.11
0.90
62517
62538 A
-12.5 mm
0.748
0.667
0.081
89%
96
0.11
0.50
62518
62538 B
-12.5 mm
1.042
0.746
0.297
72%
96
0.13
0.70
62513
62539 A
-75 m
1.088
1.042
0.046
96%
96
0.23
2.50
62514
62539 B
-75 m
1.039
0.888
0.151
85%
96
0.20
1.00
62515
62539 C
-75 m
1.039
0.961
0.077
93%
96
0.67
1.50
62516
62539 D
-75 m
1.086
1.032
0.054
95%
96
0.76
2.00
62517
62540 A
-75 m
0.821
0.765
0.057
93%
96
0.22
1.00
62518
62540 B
-75 m
1.073
1.011
0.063
94%
96
0.54
1.50
51

Figure 13.4
Erato Gold Leach Curves (Half Core Composites)
13.7 Metallurgical Samples and Locations

The metallurgical testwork programmes as outlined in Section 1 to Section 1.7 have
been carried out on bulk, half and full core composite samples from the three main
deposits.
A summary of the various metallurgical samples, their respective crush size, drillhole
number, and deposit location is detailed in Table 13.11.
The location of the drillholes from which metallurgical composites have been prepared,
and which represent ore from the Tigranes, Artavasdes and Erato deposits are shown in
Figure 13.5 and Figure 13.6.
52

Table 13.11
Metallurgical Testwork Composite Summary
Testwork
Programme
Year
SGS
2010
3
3
-19
Mix
Half
Composites A, B & C
SGS
2010
12
-12 to -38
Mix
Half
Composites A & B
WAI
2011
KCA
2012
Deposit
DDH #
Core
Size
-38
Mix
Half
Sample
Description
Composites A, B & C
Tigranes
-12
MC070
Full
Met drillhole
-12
MC071
Full
Met drillhole
Erato
-12
MC068
Full
Met drillhole
Litho
-12
Full
Met drillhole
Tigranes
-12.5
Bulk
Outcrop sample
Artavasdes
-12.5
Bulk
Outcrop sample
Tigranes
-12.5
Full
Met drillhole
-12.5
DDAM 137
Full
Met drillhole
-12.5
DDAM-174
Full
Met drillhole
-12.5
DDAM-140
Full
Met drillhole
-12.5
DDAM-148
Full
Met drillhole
-12.5
DDAM-169
Full
Met drillhole
Tigranes
2013
Crush Size
mm
Artavasdes
Artavasdes
KCA
No.
DDAM 130
-12.5
DDA-018
Half
Geological reserve
-12.5
DDA-055
Half
Geological reserve
-12.5
DDA-076
Half
Geological reserve
Artavasdes
-12.5
DDA-033
Half
Geological reserve
Mixed
-12.5
DDA-022/DDA-055
Half
Geological reserve
-12.5
DDA-035/DDA-055
Half
Geological reserve
-12.5
DDA-046/DDA-076
Half
Geological reserve
Erato
Total
-12.5
DDA-030
Half
Geological reserve
-12.5
DDA-030
Half
Geological reserve
-12.5
DDA-276
Half
Geological reserve
-12.5
DDA-278
Half
Geological reserve
-12.5
DDA-290
Half
Geological reserve
-12.5
DDA-340
Half
Geological reserve
46
53

Figure 13.5
Tigranes and Artavasdes Metallurgical Sample Drillhole Location

Map
54

Figure 13.6
Erato Metallurgical Sample Drillhole Location Map
55

14
MINERAL RESOURCE ESTIMATES
14.1 Overview of Estimation Strategy

Lydian International Limited (Lydian) commissioned AMC Consultants (UK) Limited
(AMC) to evaluate the mineral resources for the Amulsar gold project. The Mineral
Resources Statement presented in this report represents an update to mineral
resources previously evaluated by Independent Mining Consultants Inc. (IMC)
documented in a report titled 2012 Mineral Resource Estimate, Amulsar Gold Project 3
March 2012.
Gold grades for the UV unit were estimated using multiple indicator kriging (MIK). MIK
was considered an appropriate estimation method for the Amulsar deposit, which is
typified by short-scale grade continuity mineralization and broad low-grade zones of
mineralization within the UV unit. An extension of MIK, localized multiple indicator
kriging (LMIK) is a robust estimation approach that allows the estimation of targeted
selective mining units (SMU) within larger panels, and is suitable for estimation within
relatively broadly-spaced datasets.
Gold grades for the LV unit were estimated using ordinary kriging (OK) into a subblocked SMU model for the unit. Silver grades were also estimated using ordinary
kriging (OK) for all UV and LV units. Silver grades were estimated into sub-blocked SMU
models for each unit.
AMC used Datamine, Isatis and GSLib software for the resource estimation study.
14.2 Geological and Assay Database
The resource database used to evaluate the mineral resources for the Amulsar project
was provided as MSExcel spreadsheet exports from Lydians Fusion database system.
These spreadsheets contained all information for diamond core and reverse circulation
drillholes, and chip samples for the project. The database consists of 1,154 drillholes
and channel samples collected in exploration work undertaken between 2007 and 2012.
The data is comprised of 298 diamond drillholes (40,017 m), 498 reverse circulation
drillholes (69,380 m), and 358 channel samples (1,337 m). Drilling and chip sampling
were carried out in the Tigranes, Artavasdes, Arshak and Erato areas of the Amulsar
project.
Drillhole data was comprised of gold and silver assays, lithological codes updated for
the current interpretation, alteration data, structural orientations and descriptions. Lydian
also provided geotechnical data for diamond core drillholes included RQD, core
recovery, and fracture counts measurements. Chip sample data contained only gold and
silver assay values. The resource data provided by Lydian was validated by:
Reviewing collar and downhole survey data;
Checking the minimum and maximum values for each field in the borehole
database and confirming those values outside of expected values;
Checking for gaps, overlaps, and out of sequence intervals;
56

Generating boreholes in Datamine, and then reviewing boreholes on a section-bysection basis to ensure that mineralization and alteration are consistent with
drilling.
Following this review, AMC considers that the Amulsar database provided by Lydian is
sufficiently reliable to interpret with confidence the boundaries of the gold and silver
mineralization, and that the assay data is sufficiently reliable to support resource
estimation.
14.3 Geological Modelling and Interpretation
The Amulsar deposit has a complex history of structural events, including an initial
antiform fold over the deposit resulting from east- and west-directed thrusting and
related complex deformation, and two episodes of extensional faulting within large northeasttrending grabens. This has resulted in a complex of structurally positioned blocks
of upper volcanic and lower volcanic rocks. Mineralization is predominantly confined to
rocks of the Upper Volcanic unit (UV). Mineralization in the Lower Volcanic unit (LV) are
generally not mineralized, except near contacts with mineralized UV rocks or related
mineralized structures.
The contacts of the Upper Volcanic unit are difficult to determine on a property-wide
scale because of the complex structural history. Therefore, the unit was modelled within
structural blocks outlined by a detailed structural interpretation of the deposit.
Wireframes of the UV unit were modelled by extending wireframe triangles of interpreted
structural block wireframes to drillhole lithological intersections comprising the top and
bottom contacts of UV. Lithological contacts are complicated by small-scale variations in
lithology and faulting. Contacts were snapped to drillhole intersections as much as
possible, however, due the complexity of the deposit, in some cases contacts needed to
be interpreted through a number of drillhole intersections without being snapped to each
interval intersection.
Lydian also generated a wireframe model of near-surface colluvium material, including
talus and weathered rock. As the deposit is located in mountainous terrain, these units
can be of variable areal extent and depth. This material was modelled on the basis of
only larger areas logged as colluvium. Similar to the Upper Volcanic wireframe, contacts
were snapped to drillhole intersections as much as possible, but due to complexity and
variable coding of lithology, these wireframes were interpreted over a number of drillhole
intersections in some cases.
Resources were not estimated for the colluvium unit. AMC considers this material lowgrade or waste.
The UV unit was subdivided into two, comprising the Erato sub unit to the north and the
Artavasdes-Arshak-Tigranes (AAT) sub unit to the south as shown in Figure 14.1. The
two units are structurally distinct, with the Erato unit having a slightly lower tenor of gold
mineralization.
Rocks of the LV unit were assumed to occur in all areas outside of the Upper Volcanic
and colluvium wireframes. The extent of the lower volcanic unit was modelled by AMC
57

based on the extent of drilling over the Amulsar project. Exploration targets outside of
the Erato and AAT areas were excluded. .
Lydian generated the UV and colluvium wireframe interpretation models for the deposit.
AMC reviewed the models, and worked with Lydian through a number of iterations to
develop the final wireframe models used for the resource estimate.
Figure 14.1
Wireframe Models for Amulsar Project and Interpreted Faults
Erato
AAT
Note: Interpreted faults in magenta
14.4 Specific Gravity

AMC determined that the most appropriate method of representing specific gravity is to
average the specific gravity values for each main unit modelled. Summary statistics for
specific gravity for each unit is provided in Figure 14.2.
58

Figure 14.2
Summary Statistics for Specific Gravity Measurements by Zone*
Note: *100=Erato UV, 200=AAT UV, 300=LV, 400=Colluvium
14.5 Topography
Lydian provided point data files for the Amulsar project in DXF format, covering the
mineralization areas modelled by AMC. The topography data was based on surveys
undertaken by Lydian, and AMC generated a topography wireframe based on the point
data.
14.6 Resource Database
The drillholes and chip sample database used for estimation of resources consists of
91,830 gold and silver assays, and 1,148 specific gravity measurements. The drillhole
database excludes 92 geotechnical, metallurgical and condemnation drillholes which
were not assayed for gold and silver, or were not assayed using the same techniques
used for all other samples (i.e. metallurgical bore holes).
Drillhole intervals for each of the four zones were coded using the wireframe models for
Erato and AAT, UV, LV, and colluvium wireframe models. Due to wireframe
configurations, some intervals lying on the wireframe boundaries were duplicated in one
59

of the four zones. These duplicates were removed from one dataset according to the
following criteria:
All duplicated intervals coded by the colluvium wireframe were assigned to either
UV or LV units;
Duplicated intervals coded in both UV and LV units were assigned to the

appropriate dataset units, based on lithological coding. Duplicated intervals coded
as LV lithologies were removed from the Upper Volcanic dataset, and duplicated
intervals coded as any other lithologies were assigned to the Upper Volcanic
dataset.
All unsampled intervals within the database were assigned a trace value of 0.0025 g/t
for gold and 0.005 g/t for silver.
14.7 Compositing, Capping and Declustering
Drillholes for each of the four zones, Erato and AAT, Upper Volcanic, and Lower
Volcanic units were composited to 1 metre to provide common support for statistical
analysis and estimation for gold and silver data. Approximately 93% of assay samples
were sampled at 1 metre intervals or less. Summary statistics for gold and silver assays
and composites are provided in Appendix B.
Based on statistical analysis of the Erato and AAT composites, it was found that a
combined dataset of UV and LV units for each Erato and AAT zones provided more
stable datasets for indicator variography and Gaussian transform of gold composite
data. These combined datasets were used for variography and the estimation of grades
for the UV model only. The LV unit is estimated using composites from only the LV unit.
Log probability plots and the spatial distribution of composites were reviewed for the
combined UV and LV gold composites. Analysis indicates that capping of high gold
grades for the AAT areas is appropriate for the estimation of resources so that the
influence of high-grade outlier values is reduced. The AAT composites were capped at
20 g/t gold. Erato gold composites were not capped. LV composites used to estimate LV
grades were not capped.
Similarly, for silver composites, log probability and the spatial distribution of composite
grades were reviewed for UV and LV datasets separately. Analysis indicates that
capping of high silver grades is appropriate for the LV and Erato UV composites. LV
composites are capped at 60 g/t Ag, and Erato UV composites were capped at 35 g/t
Ag. AAT UV composites are not capped.
Analyses of silver and gold composites show that there is no correlation between the
two metals. A possible conclusion that may be drawn from this lack of correlation is that,
mineralization conditions, or events for gold and silver were probably very different.
A cell declustering method was undertaken to reduce the impact of varying sampling
densities on the global mean of gold grades for the Erato and ATT UV-LV composites.
For the Erato zone a declustering cell size of 90 m by 90 m by 15 m was used, and for
the AAT zone 95 m by 95 m by 5 m for the AAT zone, for northing, easting and elevation
60

coordinates. Declustered composite data is used in variography and change-of-support

calculations.
Gold composites for the LV unit and silver composites for LV and UV units were not
declustered prior to variography.
14.8 Gold Indicator Statistics
Conditional statistics were generated for the Erato and AAT zones using combined UV
and LV gold composites and used to determine intra-class mean grades to be used for
post-processing of model panel grade estimates. Eleven indicator thresholds were
selected for each of the two UV zones, as they were considered sufficient to discretize
both the sample and metal values.
Eleven gold indicator thresholds were selected for modelling the Erato and AAT UV
zones. The selected thresholds represent the entire grade range, and therefore, the
spatial variability of the mineralization. Indicators and summary statistics are presented
in Table 14.1.
61

Table 14.1
Metal
Zone
Au
200
Au
Summary of Amulsar Combined UV and LV Gold Indicator Statistics

Indicator
Number
Indicator
Threshold
Au [gpt]
Threshold
Quantile
No. Of
Composites
Minimum
25,424
0.00
0.03
0.01
Maximum
Mean
0.028
40.00
8,783
0.03
0.05
0.04
0.049
60.00
17,273
0.05
0.13
0.08
0.13
65.00
4,253
0.13
0.17
0.15
0.166
70.00
4,354
0.17
0.22
0.19
0.215
80.00
8,571
0.22
0.37
0.28
0.371
85.00
4,307
0.37
0.52
0.44
0.516
90.00
4,308
0.52
0.78
0.63
0.775
95.00
2,145
0.78
1.00
0.88
0.996
97.00
3,863
1.00
2.02
1.39
10
2.02
99.00
1,719
2.02
4.32
2.83
11
4.32
99.50
797
4.32
20.00
8.16
18,863
0.00
0.03
0.01
0.03
40
7,717
0.03
0.12
0.06
0.12
65
1,437
0.12
0.16
0.14
0.21
70
1,392
0.16
0.21
0.18
0.28
75
1,318
0.21
0.28
0.24
0.39
80
1,414
0.28
0.39
0.33
0.56
85
1,302
0.39
0.56
0.46
0.74
90
724
0.56
0.74
0.64
100
1.00
92.5
682
0.74
1.00
0.85
1.46
95
585
1.00
1.46
1.19
10
2.88
97
746
1.46
3.93
2.25
11
3.93
99.5
169
3.93
40.80
8.13
14.9 Variography
A suite of experimental gold variograms were generated and modelled for the Erato and
AAT subzone declustered composites (using combined UV and LV data). Variograms
were generated for both gold and indicator thresholds. Traditional semi-variograms were
used as the spatial model for Erato and AAT zones. Gold indicator variograms were
used to estimate gold grades, while gold variograms were used to derive change-ofsupport correction factors.
Omni-directional variograms, or variograms that model major and semi-major axis, are
considered the most appropriate for estimating the UV units, because:
Structural trends and faults related to mineralization are present in a number of

different orientations;
Mineralization is, in part, associated with lithology changes, brecciation, and

fractures that are not continuous over large distances (i.e. 100 m in general);
62

Anisotropic orientations in trial variograms are weakly controlled by data

configuration (drilling pattern), and ranges for major, semi-major and normal axis
are similar.
AMC used omni-directional variograms for gold and indicator variograms for the AAT UV
zone and omni-directional variograms for major and semi-major axis for the Erato UV
zone indicators, with anisotropy for the Z direction. An omni-directional variogram was
also used for the LV zone, using a traditional variogram with Gaussian transform data. A
summary of variogram models for the project is provided in Table 14.2. Examples of the
variograms models are presented in Figure 14.2 and Figure 14 3.
AMC also used omni-directional variograms for silver composites for the AAT UV, Erato
UV and LV domains. Gaussian transforms of silver composites were used for traditional
variograms. Examples of silver variogram models are presented in Figure 14.3 and
Figure 14.4.
63

Table 14.2
Summary of Variogram Models Amulsar Project

DATAMINE ROTATION
VARIABLE
ZONE
Au
UV
100
0.1300
0.1220
Au
UV
200
0.1700
0.2970
Au
LV
SUBZONE
300
C0
CC
0.3000
Structure Model
Rx [m]
Ry [m]
Rz [m]
Spherical
35
35
35
0.1450
Spherical
90
100
65
0.2170
Exponential
Exponential
53
53
53
0.0680
Spherical
300
300
300
0.4000
Spherical
42
42
42
0.3000
Spherical
150
150
150
Spherical
20
20
30
90
20
90
90
90
Au(0.03)
UV
100
0.0110
0.0080
0.0170
Spherical
35
35
70
Au(0.12)
UV
100
0.0110
0.0080
Spherical
20
20
30
0.0170
Spherical
35
35
70
Au(0.16)
UV
100
0.0110
0.0080
Spherical
20
20
30
0.0170
Spherical
35
35
70
Au(0.21)
UV
100
0.0215
0.1260
Spherical
25
25
55
90
Au(0.28)
UV
100
0.0215
0.1000
Spherical
20
20
60
90
Au(0.39)
UV
100
0.0050
0.0570
Spherical
20
20
55
90
Au(0.56)
UV
100
0.0063
0.0577
Spherical
16
16
40
90
Au(0.74)
UV
100
0.0063
0.0577
Spherical
16
16
40
90
Au(1.00)
UV
100
0.0063
0.0577
Spherical
16
16
40
90
Au(1.46)
UV
100
0.0063
0.0577
Spherical
16
16
40
90
Au(3.93)
UV
100
0.0063
0.0577
Spherical
16
16
40
90
Au(0.028)
UV
200
0.0550
0.0760
Exponential
30
30
30
0.0320
Spherical
105
105
105
0.0707
Spherical
300
300
300
0.0180
Exponential
25
25
25
0.1060
Exponential
95
95
95
0.0400
Spherical
270
270
270
0.0800
Exponential
35
35
35
0.0547
Spherical
100
100
100
0.0650
Exponential
28
28
28
0.0550
Spherical
83
83
83
Exponential
37
37
37
Au(0.049)
Au(0.130)
Au(0.166)
UV
UV
UV
200
200
200
0.0850
0.0840
0.0800
Au(0.215)
UV
200
0.0580
0.0610
0.0580
Spherical
67
67
67
Au(0.371)
UV
200
0.0500
0.0739
Spherical
49
49
49
Au(0.516)
UV
200
0.0500
0.0440
Spherical
43
43
43
Au(0.775)
UV
200
0.0250
0.0389
Spherical
43
43
43
Au(0.996)
UV
200
0.0132
0.0346
Spherical
42
42
42
Au(2.020)
UV
200
0.0090
0.0105
Spherical
38
38
38
Au(4.320)
UV
200
0.4615
0.5385
Spherical
38
38
38
AG
UV
100
0.1900
0.8100
Spherical
135
135
135
AG
UV
200
0.2300
0.2580
Exponential
40
40
40
0.3530
Spherical
160
160
160
AG
LV
0.2400
0.1590
Spherical
530
530
530
0.4000
Exponential
35
35
35
0.3600
Spherical
126
126
126
64

Figure 14.3
Variogram Models for Upper Volcanic Unit, Erato Zone
A
B
Gold variogram model

Gold indicator variogram model at 0.120 g/t Au
65

Figure 14.4
Silver Variogram Models for Erato and AAT UV Zones
A: Erato UV model
B: AAT UV model
66

Figure 14.5
Silver Variogram Model for LV Zone
14.10 Block Model Parameters

Two block models were generated for the Amulsar project. A panel model for the MIK
estimation of UV unit gold grades is comprised of a block size of 20 m E 20 m N and
10 m elevation. The target smallest mining unit (SMU) block model for this unit is a block
size of 10 m E x 10 m N x 5 m elevation. Estimation procedures used parent model
blocks for both panel and SMU models, while mineral resources were reported in a subblocked SMU model.
Mineral resources for the lower volcanics are estimated using a sub-blocked SMU
model. Mineral resources for silver are also estimated using a sub blocked model of UV
and KV zones. Block model definitions are presented in Table 14.3.
Table 14.3
Model
SMU
Panel
Amulsar Project Block Model Definition

Coordinate
Origin (m)
Block Size (m)
No. of Blocks
Northing:
559700
10
292
Easting:
4396300
10
430
Elevation:
2300
164
Northing:
559700
20
146
Easting:
4396300
20
215
2300
10
82
Elevation:
67

14.11 Estimation Procedures

14.11.1 Gold Estimates for Upper Volcanic Units
Gold grades were estimated using a MIK estimator, using 1 m gold composites for each
of the Erato and AAT UV zones. As the combined LV and UV composite set of grades
for each of the Erato and AAT zones is more statistically stable, these were used to
estimate gold into each of the Erato and AAT models. A panel model with the
dimensions of 20 m E 20 m N 10 m elevation was used for the each UV zone MIK
estimates. In preparation for ranking of localized estimates, gold grades were estimated
by OK into a target SMU model with the dimensions 10 m N 10 m E 5 m elevation.
These estimates also utilized the combined (LV and UV) composites for Erato and AAT
zones.
Gold grades were estimated in three estimation runs using progressively larger search
ellipsoid ranges for the Erato and AAT zones, as outlined in Table 14.4. The search
ellipsoid for the Erato zone was inclined at 10 to the north to reflect a dip trend
observed in mineralization. No similar trends were observed in the AAT zone.
A change-of-support adjustment was applied in order to produce resource estimates that
reflect the anticipated level of mining selectivity. When estimating local recoverable
resources the objective is to obtain the proportion of mineralization above a particular
cut-off grade (pseudo tonnage) within panels that are large enough to achieve a robust
estimation. Estimation was conducted by MIK-based panel model (20 m N 20 m E
10 m elevation). A selective mining unit (SMU) of 5 m E 5 m N 5 m RL was then
estimated applying a two-staged indirect log-normal\affine change-of-support
methodology.
The panel estimates was subjected to a series of corrections to reflect the change-ofsupport:
Lognormal change-of-support
Readjustment to retain permanence of the distribution.
Affine correction to ensure variance target is met.
A global change-of-support was generated using discrete Gaussian change-of-support

and compared against results generated in the MIK model. The final change-of-support
coefficients (f) applied to the domains are shown below:
Erato Upper Volcanic zone, 0.50
ATT Upper Volcanic zone, 0.40
A localized MIK (LMIK) SMU model was generated using the MIK SMU-corrected
histogram, and partitioning the estimated tonnage and metal from the MIK panel model
evenly into SMU blocks within the panel this methodology is based on work by
Abzalov (2006). In this manner, grades are mapped into each of the SMU-sized blocks,
thereby replicating the targeted mining selectivity. Ranking of the SMU-sized blocks
within a panel is based on SMU grades estimated by ordinary kriging. Comparative
grade tonnage checks between the MIK and the LMIK models were completed as part of
68

the verification process. Visual review and statistical reviews of the LMIK model were
also completed prior to accepting the final model. Tonnage and grade plots for the Erato
and AAT UV Zones are presented in Figure 14.6 and Figure 14.7.
14.11.2 Gold Estimate for Lower Volcanics
Gold grades were estimated by ordinary kriging (OK) for the Lower Volcanic unit using
only LV composites. No distinction was made between Erato and AAT areas for these
estimates. Three estimation runs were completed using progressively expanded
ellipsoid search ranges. Estimation parameters for this unit are outlined in Table 14.4.
14.11.3 Silver Estimates for Upper and Lower Volcanic Units
Silver grades were estimated for the Upper and Lower Volcanic units using silver
composites separately for each zone. Capped composites for the Erato UV zone are
used to for estimation of silver grades in the Erato UV model. Uncapped composites are
used to for estimation of silver grades in the AAT UV model. Capped composites are
used for estimation of silver grades in the LV model; no distinction is made between
Erato and AAT areas for these estimates. Three estimation runs were completed using
progressively expanded ellipsoid search ranges. Silver grades were estimated using an
OK estimator. Estimation parameters for silver are also summarized in Table 14.4.
14.11.4 Specific Gravity
Specific gravity values were assigned to each estimated model on the basis of the
average specific gravity measurements in each of the estimated models. Average
values assigned to each zone are:
Erato Upper Volcanic zone: 2.30
AAT Upper Volcanic zone: 2.38
Lower Volcanics: 2.32
69

Table 14.4
Gold and Silver Estimation Parameters

Search Ellipse
Rotation*
Ranges [m]
VARIABLE
Estimator
Zone
Au
OK
UV
Au
OK
UV
Au
OK
LV
Au
MIK
UV
Au
Ag
Ag
Ag
MIK
OK
OK
OK
UV
UV
UV
LV
Maximum
Composites
per Drillhole
not used
Subzone
Estimation
Run
Minimum
Maximum
Octant
Search
SVx
[m]
SVy
[m]
SVz
[m]
Z
AXIS
XAXIS
YAXIS
100
12
80
none
60
60
20
100
10
12
40
none
120
120
40
not used
20
none
240
240
80
not used
12
60
none
60
60
20
12
40
none
120
120
40
not used
12
30
none
360
360
120
not used
12
60
none
60
60
20
200
100
100
100
200
not used
100
10
not used
12
40
none
120
120
40
12
80
none
60
60
20
12
40
none
120
120
40
not used
20
none
240
240
80
not used
12
60
none
60
60
20
12
40
none
120
120
40
not used
12
30
none
360
360
120
not used
12
80
none
60
60
20
12
40
none
120
120
40
not used
12
20
none
360
360
120
not used
12
60
none
60
60
20
12
40
none
120
120
40
not used
12
30
none
360
360
120
not used
12
60
none
60
60
20
12
40
none
120
120
40
not used
not used
not used
3
3
*Datamine convention rotations
70

Figure 14.6
Tonnage and Grade Plot for Erato Upper Volcanic Zone LMIK
Estimate
4.0
140
3.5
120
3.0
100
2.0
ChangeofSupportTonnage
60
1.5
LMIKEstimateTonnage
LMIKEstimateGrade
40
1.0
ChangeofSupportGrade
20
0
0.00
RelativeTonnage
Figure 14.7
Grade[gpt]
80
0.5
0.0
0.20
0.40
0.60
0.80
1.00
CutOffGrade[gpt]
1.20
1.40
1.60
1.80
2.00
Tonnage and Grade Plot for AAT Upper Volcanic Zone LMIK
Estimate
120
6.0
100
5.0
80
4.0
60
3.0
Grade[gpt]
RelativeTonnage
2.5
ChangeofSupportTonnage
2.0
40
LMIKEstimateTonnage
ChangeofSupportGrade
LMIKEstimateGrade
20
1.0
0.0
0
0.00
0.50
1.00
1.50
CutOffGrade[gpt]
2.00
2.50
3.00
Cross-sections of the Amulsar model with estimated gold and silver grades are provided
in Figure 14.8 and Figure 14.9.
71

Figure 14.8
Cross-section of Amulsar Gold Deposit Sub Unit Block Model
72

Figure 14.9
Cross-section of Amulsar Gold Deposit Gold Grade Block Model
73

Figure 14.10 Figure 14.10 Cross-section of Amulsar Gold Deposit Silver Grade Block Model
74

14.11.5 Validation
Validation checks were completed for the Erato and AAT UV zone estimates for both
MIK and LMIK gold estimates including:
Comparisons of mean grades of declustered composites and estimated model

grades;
Swath plots of declustered composites and LMIK model estimates;
Grade and tonnage curves for declustered composites with change-of-support

targeted on the SMU variance (global change of support) LMIK model estimates.
Validation checks were also completed for LV zone gold and silver estimates, and Erato
and AAT UV zone OK estimates including:
Comparisons of mean grades of declustered composites with estimated model

grades;
Swath plots of declustered composites and OK model estimates;
Validation checks confirm that block model estimates for gold and silver for the Amulsar
project are appropriate, and reasonably reflect the underlying sampling data.
14.12 Resource Classification
The Mineral Resources have been estimated using the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves,
Definitions and Guidelines prepared by the CIM Standing Committee on Reserve
Definitions and adopted by CIM Council, and procedures for classifying the reported
resources were undertaken within the context of the Canadian Securities Administrators
National Instrument 43-101 (NI 43-101).
Estimated resources have been classified with consideration of the following criteria:
Quality and reliability of raw data (sampling, assaying, surveying).
Confidence in the geological interpretation.
Number, spacing, and orientation of intercepts through mineralized zones.
Knowledge of grade continuities gained from observations and geostatistical

analyses.
The likelihood of material meeting economic mining constraints over a range of

reasonable future scenarios, and expectations of relatively low selectivity of
mining.
Gold mineralization at the Amulsar deposit is characterized by short range continuities,

particularly if considering grades above potentially economic cut-offs. This short-scale
continuity is controlled by the lithological heterogeneity of the deposit. Complex
structural histories, including a major thrusting event, followed by at least two
extensional events have increased the spatial complexity of mineralization for the
75

deposit. This is supported by indicator variography for higher gold grades for the Upper
Volcanic unit, with ranges typically less than 40 m.
It is, therefore, important to identify low-confidence areas which have been estimated by
one or two drillholes in an isolated area, regions at depth where estimates are highly
influenced by a single drillhole, or regions that have been estimated at longer distances
from any drillholes. AMC considers that estimates based on these circumstances do not
meet the requirements of Inferred category resources. Using the boundary between the
UV second and third estimation runs as a guide, AMC developed a wireframe which
constrained the extent of reportable estimated resources. The boundary also excluded
blocks estimated by isolated drillholes or blocks estimated by drillholes that are
significantly isolated from other drillholes at depth. This wireframe was applied to the
final block model containing UV and LV estimates, and all blocks below this boundary
were removed from the model as unclassified material.
Indicated resources were classified on the basis of a wireframe enclosing drilling that
was closely spaced (approximately 45 m), and included holes drilled vertically and at
inclined angles, demonstrating vertical and horizontal continuity. The wireframe outline
was drawn to enclose a continuous zone of mineralization and relatively high number of
composites used to make each block estimate. These outlines were designed around
areas that showed lateral continuity exceeding 150 m. Indicated classification was
extended to include overlying or underlying blocks of the Lower Volcanic unit.
Resources classified as Measured were contained within the indicated wireframe, but
where block grades are estimated by 50 or more composites. The Measured
classification encompassed only blocks in the Upper Volcanic unit.
Resources classified as Inferred comprise all remaining blocks not classified as
Measured or Indicated.
The likelihood of the resource being potentially economic was tested by generating an
optimized pit shell around the classified resources using:
Pit slope angle of 45 degrees
Gold price assumption of $1,200 per troy ounce of gold
14.13 Mineral Resource Statement

Mineral Resources for the Amulsar project have been estimated in conformity with
generally accepted CIM Estimation of Mineral Resource and Mineral Reserves Best
Practices guidelines and are classified according to the CIM Standards on Mineral
Resources and Reserves: Definition and Guidelines (December, 2005). At a cut-off
grade of 0.35 g/t gold, the Mineral Resources are estimated at 524 Mt at 1.05 g/t Au
(1.77 million ounces) of Measured category, 181 Mt at 1.02 g/t Au (0.59 million ounces)
of Indicated category, and 580 Mt at 0.93 g/t Au (1.73 million ounces) of Inferred
category resources.
The Mineral Resource Statement was prepared by G. David Keller, P.Geo.
(APGO#1235), of AMC Consultants (UK) Limited (AMC), an independent Qualified
Person as this term is defined in National Instrument 43-101. The effective date of the
76

Mineral Resource Statement is 5 March 2013. Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability. There is no certainty that
all, or any part of, the Mineral Resources will be converted into Mineral Reserves. AMC
is unaware of any environmental, permitting, legal, title, taxation, socio-economic,
marketing, political, or other relevant issues that may materially affect the Mineral
Resources.
Table 14.5
Mineral Resource Statement for the Amulsar Project, Armenia, AMC

Consultants (UK) Limited, 5 March, 2013
Quantity (tonnes)
Gold
Grade (g/t)
Silver
Grade (g/t)
Contained
Gold (toz)
Contained
Silver (toz)
Measured
52,400,000
1.05
4.19
1,769,000
7,059,000
Indicated
18,100,000
1.02
3.25
593,000
1,888,000
Inferred
58,000,000
0.93
2.87
1,734,000
5,351,000
Total Measured and

Indicated
70,500,000
1.05
3.95
2,379,000
8,949,000
Total Inferred
58,000,000
0.93
2.87
1,734,000
5,351,000
Classification
1.
2.
The effective date of the Mineral Resource Statement is 5 March 2013.

A cut-off grade of 0.35 g/t gold for this project based on gold price of US$1,200 per troy ounce of gold and assuming
an open-pit mining scenario.
Figures have been rounded to the appropriate level of precision for the reporting of Indicated and Inferred Resources
in the upper and lower volcanic units.
Due to rounding, some columns or rows may not compute exactly as shown.
Mineral Resources in this resource statement are not Mineral Reserves do not have demonstrated economic viability.
The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues. Mineral Reserves have been previously reported for this project
using a prior Mineral Resource statement
3.
4.
5.
14.14 Previous Resource Estimates

Resources for the Amulsar project were previously estimated by Independent Mining
Consultants Inc. (IMC), as presented in the KD Engineering Report Amulsar Resource
Update and Heap Leach Feasibility Study, in 2012. Mineral resources were reported at
a cut-off grade of 0.40 g/t Au, with the following assumptions:
Gold price US$1,200 per troy ounce of gold;
Processing costs of US$3.00 per tonne;
Mining costs of US$6.00 per tonne.
The IMC Mineral Resource Statement for the Amulsar project is presented in
Table 14.6.
77

Table 14.6
Mineral Resource Statement for the Amulsar Gold Project,

Independent Mining Consultants Inc., 3 September, 2012
Classification
Measured
Quantity (Mt)
Gold Grade (g/t)
Silver Grade (g/t)
36.5
1.00
3.82
Indicated
32.2
0.95
3.84
Inferred
35.5
0.92
4.01
Measured + Indicated
68.8
0.98
3.83
Mineral resources estimated by AMC comprise an increase of Measured and Indicated

resources of 1.7 million tonnes, with increased gold grade from 0.98 g/t to 1.05 g/t gold
and an increase in silver grades from 3.83 g/t to 3.95 g/t. Inferred resources increased
from the previous resource by 22.8 million tonnes, with a corresponding minor decrease
in gold grades from 0.98 to 0.93. Measured resources increased by 15.9 million tonnes
from the previous estimate, gold grades increased marginally from 1.00 g/t to 1.05 g/t,
and an increase in silver grades from 3.82 g/t to 4.19 g/t. However, Indicated resources
decreased by 14.1 million tonnes with a corresponding increase in gold grades from
0.95 g/t to 1.02 g/t, and a marginal decrease in silver grades from 3.84 g/t to 3.24 g/t.
The change in mineral resources can be attributed to the following factors:
Major reinterpretation of project geology, where mineralization is essentially

constrained to the new UV unit;
The interpretation of structural blocks used to model the mineralized UV unit;
Estimation of mineral resources using a different methodology;
Classification of mineral resources based on a number of factors including;

structural and lithological complexity of mineralization, ranges of higher grade
indicator variography, and continuity of mineralized zones.
The major geological and structural reinterpretation of the Amulsar project necessitated
a different approach to the estimation of mineral resources, as well the classification of
mineral resources.
14.15 Grade Sensitivity Analysis
The mineral resource for the Amulsar project is sensitive to the selection of the reporting
cut-off grade. To illustrate this sensitivity, the global quantities and grade estimates are
presented in Table 14.6 at different gold cut-off grades. The reader is cautioned that the
figures presented in this table should not be misconstrued with a Mineral Resource
Statement. The figures are presented only to show the sensitivity of the block model
estimates to the selection of cut-off grades. Table 14.7 and Figure 14.11 present the
sensitivity as grade and tonnage plots.
78

Table 14.7
Global Model Quantities and Grade Estimate, Amulsar Project
Resource Classification
Measured + Indicated
Inferred
Cut-off Grade
[g/t Au]
Gold Grade
[g/t]
Quantity [t]
Contained Gold
[toz]
0.00
0.27
353,500,000
3,068,000
0.05
0.46
202,200,000
2,990,000
0.10
0.63
140,500,000
2,846,000
0.20
0.78
107,700,000
2,702,000
0.30
0.95
81,100,000
2,476,000
0.35
1.05
70,500,000
2,379,000
0.40
1.14
61,600,000
2,258,000
0.50
1.32
49,000,000
2,078,000
0.80
1.83
28,200,000
1,660,000
1.00
2.11
21,800,000
1,476,000
1.50
2.91
11,500,000
1,072,000
3.00
4.74
3,700,000
564,000
5.00
6.26
1,400,000
277,000
0.00
0.09
924,000,000
2,674,000
0.05
0.32
245,800,000
2,529,000
0.10
0.48
151,400,000
2,337,000
0.20
0.64
103,500,000
2,130,000
0.30
0.82
70,100,000
1,847,000
0.35
0.93
58,000,000
1,734,000
0.40
1.02
49,900,000
1,636,000
0.50
1.20
37,800,000
1,458,000
0.80
1.75
19,400,000
1,090,000
1.00
2.04
14,400,000
944,000
1.50
2.82
7,400,000
674,000
3.00
4.71
2,300,000
347,000
5.00
5.70
1,000,000
185,000
79

Figure 14.11 Global Grade and Tonnage Curves, Amulsar Project

10,000,000
19
9,000,000
17
15
8,000,000
MEA+INDQuantity
INFQuantity
7,000,000
13
MEA+INDGrade
11
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
GoldGrade[gpt]
Quantity[100xt]
INFGrade
6,000,000
0
0.00
0.50
1.00
1.50
CutOffGrade[gptAu]
2.00
2.50
3.00
80

15
MINERAL RESERVE ESTIMATES
A mineral reserve estimate for the Amulsar project was developed from the results of the
2012 feasibility study for the project using a concurrent mineral resource estimate and
has not been revised for later mineral resource estimates. The mineral reserve is
reported as being current at 3 September 2012. The mineral reserve will be revised as
part of a feasibility study currently underway and due for completion in August 2013.
The mineral reserve is the total of all proven and probable category ore that is planned
for production. Section 16 details the mine plan and schedule that have been
determined to be the most economic method of extracting this reserve. The mineral
reserve was established by tabulating the diluted tonnes and grades of proven and
probable material within the designed final pit geometry that is scheduled as ore to the
crusher over the mine life. A floating cone algorithm (independently verified by Whittle
optimizations) was used to determine the final pit design and internal phase designs.
15.1 Floating Cones
The floating cone optimization algorithm is a commonly used and accepted industry tool
for providing guidance to mine design. The algorithm applies an estimate of costs and
recoveries along with overall pit slope angles to establish theoretical economic
breakeven pit wall locations.
Economic input applied to the cone algorithm is based on the Preliminary Economic
Assessment (PEA) and subsequent estimates as it was one of the first steps in the
development of the mine plan. However, the cone geometries should be considered as
a guide as they do not necessarily account for minimum safe mining widths or access to
sequential phases. The important result of the cones is the quantification of the relative
changes in geometry between the cones as a function of increasing metal prices and or
costs. Lower metal prices result in smaller pits which provide guidance to the design of
the initial and internal phase designs as these are usually indicative of high value areas
of the deposit. The change in cone geometry as metal prices are increased indicates the
best directions for the succeeding phase expansions to the ultimate pit.
A suite of floating cones was generated using gold prices between US$ 1200/oz. and
US$ 400/oz. with two goals in mind: Firstly, to determine the extents of the ultimate pit
as well as the contained gold within; and secondly to provide guidance for the optimum
interim cutbacks for the initial years of mining. The parameters in Table 15.1 were used
as inputs when generating the floating cones. The metal recoveries and costs used for
the pit definition are preliminary and different than the metal recoveries and costs
generated by the Feasibility Study because pit definition is one of the initial steps of
developing a mine plan. The mining costs resulting from the Feasibility Study given in
Section 21.2 and final recoveries presented in Table 13.30 are the inputs that were
applied to the financial model.
81

Table 15.1
Floating Cone Inputs
Gold Price
$400 to $1,200/oz (in $100/oz increments)
Silver Price
1/60*Gold Price ($20/oz when gold is $1,200/oz)
Mining Cost
Processing Cost
Waste
$2.98/t
Ore
$1.98/t
Artavasdes/Tigranes
$3.18/t
Erato
$3.38/t
Deposit
Recovery
Gold
Silver
Artavasdes
84.86
39.88
Tigranes
89.35
23.27
Erato
93.72
58.51
Refining Charges
$0.15/gm gold
Inc. Haulage Cost
$0.02/t/bench (below 2800 m elevation)
Discounting
0.5%/bench
Overall Slopes
Volcanics
42
Andesite
27
Colluvium
29
Grades less than 0.15 gm Au/t have an applied recovery of 0%
Processing costs were provided by KDE and are based on a 10 Mt/year throughput rate.
Costs for processing ore from Erato were increased by an additional US$ 0.20/t to
account for the longer distance for ore to be hauled to the crusher from the pit.
A mining cost of US$ 1.98/t for waste, was derived from the PEA when the waste rock
dump was sited on the eastern edge of the Amulsar ridge in relatively close proximity to
the pits. As the waste dump has been relocated due to geotechnical constraints to a
location approximately 4.5 km north of Tigranes/Atavasdes an additional US$ 1.00/t was
added to the waste mining cost.
The inter-ramp slope angles are by lithology:
Volcanics = 45o for slopes with dip azimuths ranging from 90-360
42o for slopes with dip azimuths ranging from 0-90,
Andesite = 30o and
Colluvium = 29o
For the floating cone runs, the interramp slopes were reduced by approximately 3o to
account for haul roads in the pit walls. Slope angles used were recommended by Golder
in their June 2012 Pit Slope Design Report (Golder, 2012c).
Figure 15.1 illustrates the US$ 900/oz cone that was used as guidance for the ultimate
pit boundary. Figure 15.2 depicts the cones between US$ 400/oz and US$ 1200/oz
sliced at an elevation of 2830. This figure can be compared with a slice of the phases in
82

the following section at the same elevation. Figure 15.3 shows cross sections of the US$
400, 600 and 900/oz cones whose section lines are given in Figure 15.2.
Figure 15.1
$900/oz Floating Cone used for Ultimate Pit Design
83

Figure 15.2
US$ 400-US$1200/oz Floating Cones Sliced at 1830m Elevation
84

Figure 15.3
Cross Sections of $400, $600, and $900/.oz Au Cones
85

15.2 Final Pit Design

The final pit design is based on the shell generated by the US$ 900/oz cone as a result
of the evaluation of the discounted net value at US$ 1200/oz gold and US$ 20/oz silver
prices for all of the cone geometries. Cones were evaluated at discount rates of 0%, 5%
and 10%, using the US$ 1200/oz gold and US$ 20/oz silver metal prices and the same
cost estimates that were used in generating the floating cones. Table 15.2 shows the
results of the cone evaluations.
The cones above US$ 900/oz. showed no increase in contained value for the additional
material mined. This is also a function of the estimation being data limited as the cone at
US$900/oz captures ore up to where drilling is limited and insufficient drill data exists to
classify material as either measured or indicated. Essentially at $900/oz gold price the
ore body is robust enough that all material in the current block mode is extracted
meaning that extensions to the orebody at depth have a high likelihood of being
economic in the future.
Table 15.3 shows the resulting tonnages contained within the cone shapes. Material
above a cutoff of recoverable 0.25 g/t gold is reported as economical material. The
results of the cone evaluation are presented graphically in Figure15.4.
Table 15.2
NPV of Floating Cone Geometries Evaluated at US$1,200/oz Au and

US$20/oz Ag
Gold Price
for Cone Run
$/oz
NPV @ $1,200/oz
no discount
$1,000's
NPV @ $1,200/oz
5% discount
$1,000's
NPV @ $1,200/oz
10% discount
$1,000's
400
906,500
851,500
800,500
500
1,220,000
1,139,000
1,063,000
600
1,376,000
1,280,000
1,192,000
700
1,626,000
1,500,000
1,385,000
800
1,749,000
1,601,000
1,468,000
900
1,761,000
1,611,000
1,477,000
1,000
1,760,000
1,610,000
1,475,000
1,100
1,759,000
1,608,000
1,472,000
1,200
1,755,000
1,604,000
1,468,000
86

Table 15.3
Gold
Price for
Cone Run
Material Contained within Floating Cone Geometries
Economic
Material
Rec.
Au>0.25 g/t
$/oz
kt
Contained Metal
Au g/t
Ag g/t
Recoverable
Metal
Au g/t
Recoverable Ounces
Ag g/t
Au
Ag
Waste
kt
Total
kt
400
33,775
0.959
4.23
0.832
1.54
903,461
1,672,272
37,312
71,087
500
50,997
0.884
4.02
0.771
1.55
1,264,124
2,541,365
66,682
117,679
600
62,691
0.831
3.84
0.725
1.45
1,461,282
2,922,563
90,268
152,959
700
82,141
0.790
3.52
0.694
1.37
1,832,779
3,618,023
151,247
233,388
800
90,653
0.796
3.44
0.704
1.37
2,051,850
3,992,946
193,760
284,413
900
92,983
0.790
3.42
0.698
1.36
2,086,651
4,065,680
204,229
297,212
1,000
94,652
0.785
3.40
0.694
1.35
2,111,932
4,108,226
215,274
309,926
1,100
96,618
0.780
3.40
0.690
1.35
2,143,374
4,193,557
227,968
324,586
1,200
97,708
0.778
3.40
0.687
1.35
2,158,130
4,240,867
235,966
333,674
Figure 15.4
Results of Floating Cone Evaluations
A drawing of the final pit is presented in Figure 15.5 at the same scale for comparison
against the $900/oz floating cone in Figure 15.1. This pit is the end result of mining 7
internal phases that are described in more detail in Section 16.
87

Figure 15.5
Ultimate Pit
88

15.3 Mineral Reserve Estimate

The mineral reserve for the project is the proven and probable material that is sent to the
crusher over the life of the mine. Due to the location of the Amulsar deposit on the top of
a ridge the construction of a sizeable low grade stockpile near the crusher is difficult. A
stockpile of approximately 655,000 tonnes is generated in the second year of mining
due to the grade of material being economic but not sufficient to displace higher grade
ore which averages above the 0.35g/t recovered cutoff grade. Since no other low grade
stockpile is generated during the mine life, the reserves for the project are a total of the
undiluted ore sent to crusher during mining and the stockpile generated in Year 2.
The proven and probable mineral reserves for the project are presented in Table 15.4.
Table 15.4
Mineral Reserves Represent the Diluted Ore Scheduled to the

Crusher
Contained
Recoverable
Contained
Recoverable
Ore kt
Gold
g/t
Proven
51,143
0.801
3.37
0.713
1.31
1,317,000
5,541,000
1,172,000
2,154,000
Probable
43,751
0.692
3.15
0.609
1.08
973,000
4,435,000
857,000
1,526,000
Proven +
Probable
94,894
0.750
3.27
0.665
1.21
2,290,000
9,976,000
2,029,000
3,680,000
Category
Silver
g/t
Gold
g/t
Silver
g/t
Gold
oz
Silver
oz
Gold
oz
Silver
oz
*Material in Year 2 above 0.30 g/t recoverable gold stockpiled

1.The gold and silver recoveries vary by deposit area based on the metallurgical test work. A recoverable grade for gold
and silver is assigned in the block model and used for tabulations.
The mineral reserve tonnes and contained ounces stated in Table 15.4 include a dilution
factor of 7%. The dilution is comprised of 6,645 kt of material with a contained gold
grade of 0.15 g/t and contained silver grade of 1.5 g/t. These dilution grades are
supported by the average grade of metal in the model blocks enveloping the scheduled
undiluted ore. The surrounding blocks average 0.21 g/t gold and 2.2 g/t silver (when any
surrounding inferred material is zeroed)
89

16
MINING METHODS
This section is based on the 2012 feasibility study for the project completed by K D
amended 26 November 2012. This section has not been revised to reflect work or
studies that had been completed at the time of the Mineral Resources reported on 5
March 2012. This section will be updated as part of a feasibility study currently
underway and due for completion in August 2013.
Mining of the Amulsar deposit is planned to be accomplished by conventional open pit,
truck and shovel mining methods. As part of the mine plan, consecutive mine phases
were designed in accordance with the outputs from the sequential floating cones. A
schedule for the mining of the phases has been developed that moves higher gold
production forward in the mine life to reduce payback periods whilst maintaining material
movements that effectively utilize the selected equipment.
The schedule delivers ore to the crusher at a rate of 5 million tonnes per annum in the
first three years of mine life, increasing to 10 million tonnes per annum following a
crusher capacity increase in the later part of Year 3. After crushing, the ore will be
delivered via conveyor to the heap leach pad for cyanide leaching.
The steps for the development of the mine plan were as follows:
1.
Floating cone guidance to phase design
2.
Phase designs
3.
Mine production schedule (strategy to maximize project return on investment)
4.
Waste material allocation.
5.
External haul road design
6.
Time sequence mine plan drawings
7.
Equipment and Manpower requirements
16.1 Pit and Phase Design

Phases were designed using the floating cones outlined in the previous section as
guidance. The two initial phases were designed based on the $400/oz cones with the
ultimate pit extents guided by the US$ 900/oz cone. No significant value was gained by
increasing the size of the ultimate pit beyond the US$ 900/oz cone, although it is
expected that the ultimate pit will increase as a function of ongoing drilling onsite, which
will upgrade potential resource into indicated and inferred categories.
The following criteria were followed when designing the mining phases:
90

Table 16.1
Phase Design Criteria
Bench Height
10 m
Interramp Slopes recommended by Golder

Volcanics
Andesite
Colluvium
42-45
30
29
Road Width
25
Road Gradient
double benched
single bench
single bench
m
% (maximum of 10%)
The majority of haul roads were designed to a lower than industry standard gradient of 8
percent, to make hauling conditions safer in icy winter conditions. In some instances,
short segments of the haul roads were increased to 10% gradients to achieve desired pit
geometries. Sequential phases were designed with at least 100 m of bench width
between push backs to allow sufficient operating room for mining equipment.
A total of seven phases are scheduled to be mined to arrive at the current design
ultimate pit limit. The Artavasdes and Tigranes areas are mined out with five phases and
the Erato area is mined in two phases. When sequencing the phases, preference was
given to phases having the lowest cost per ounce of gold produced so as to maximize
cashflow in the early years of the project. Except for the last year of mining, more than
one phase is active at any given period of time to provide adequate ore exposure while
stripping areas for future ore release.
Table 16.2 is a comparison of the designed ultimate pit tonnage with the tonnage
contained in the US$ 900 floating cone; ore tonnages are undiluted. The material
difference between the floating cone and the final pit design is less than 5% which is in
line with industry standard and is a function of ramp design and operational constraints
which are difficult to quantify via floating cone or Whittle.
Figure 16.1 shows the pit phases sliced at 2830 m elevation for comparison with the
cones sliced at the same elevation in Figure 16.2.
91

able 16.2
Volume
Boundary
Comparison of Designed Phase Tonnes against $900 Cone Tonnes at a 0.25 g/t Recovered Gold Cut-Off
Rec. Au cutoff g/t
Mat. > cut-off

ktonnes
Rec. Au
g/t
Rec. Ag
g/t
Rec. Au
oz.
Rec. Ag
oz.
Waste
ktonnes
Total Mat.
ktonnes
Strip. Rat.
w/o
$900 Cone
0.25
92,983
0.698
1.36
2,087
4,066
204,229
297,212
2.20
Ultimate Pit
0.25
89,710
0.697
1.36
2,011
3,912
216,896
306,606
2.42
-0.10
-0.27
-3.75
-3.92
% Difference
-3.65
5.84
3.06
9.15
92

The individual phase tonnages are shown in Table 16.3 at a recovered gold cut-off
grade of 0.25 g/t on an undiluted basis.
Table 16.3
Phase
Comparison of Designed Phase Tonnes against US$900 Cone

Tonnes at a 0.25 g/t Recovered Gold Cut-off
Mat > cut
Ktonnes
recAu
g/t
recAg
g/t
Recoverable Oz.
Au
Ag
Waste
kt
Total
kt
SR
W/O
Ph1a
4,697
0.849
0.48
128,211
72,487
5,337
10,034
1.14
Ph1
7,083
0.953
0.81
217,024
184,459
10,169
17,252
1.44
Ph2
21,733
0.713
1.97
498,204
1,376,523
44,242
65,975
2.04
Ph3
13,869
0.696
1.56
310,350
695,613
28,382
42,251
2.05
Ph4
18,534
0.592
0.84
352,768
500,549
46,194
64,728
2.49
Art/Tig_Tot
65,916
0.711
1.34
1,506,557
2,829,631
134,324
200,240
2.04
9,186
0.564
1.63
166,572
481,406
16,713
25,899
1.82
Erato ph1
Erato
14,608
0.72
1.28
338,159
601,172
65,859
80,467
4.51
Erato Tot
23,794
0.660
1.42
504,731
1,082,578
82,572
106,366
3.47
Total
89,710
0.697
1.36
2,011,288
3,912,209
216,896
306,606
2.42
As the three separate deposits of Artavasdes, Tigranes and Erato have different gold
recoveries, a recovered gold variable was inserted in the resource block model (based
on the deposit wireframes) on a block by block basis to facilitate more accurate mining
and economic modeling. For mine scheduling and reporting purposes, the recovered
gold grade has been used instead of the contained gold grade as this allows
consideration for recovery in planning and prevents lower value ore from having priority
over higher value ore.
93

Figure 16.1
Phases Sliced at 2830 m Elevation
94

Figure 16.2
Cross Sections of Designed Phases Showing Gold Grade in Block

Model
95

16.2 Mine Schedule

The seven phase designs were scheduled to deliver 5 million tonnes of ore per annum
in the first three years of mine life and 10 million tonnes per annum for the remainder of
the mine life starting in Year 4 upon completion of the expanded crusher facilities. Waste
stripping was scheduled far enough in advance that at any given time, there is sufficient
ore exposed to provide a continuous feed to the crusher from the pit without stockpiling.
At the projected crushed ore rates, the operation has a 12 year mine life including
mining from the pit and the re-handling of the stockpile accumulated in the second year
of mining.
Several criteria were considered when generating the mine schedule:
Maximizing the project NPV by varying the cutoff grades by period to move the highest
value ounces forward in the mine life:
Targeting consistent production of over 200,000 ounces of recoverable gold a year

from the heap for the first 3 years following the upgrade to the crushing facility in
Year 3.
Matching and keeping consistent the material movement rates to correspond with
realistic loading units outputs to ensure maximum usage of mine capital
Minimizing ore stockpiling because of the lack of accessible locations for

stockpiles in the vicinity of the crusher and to reduce costs associated with
rehandling.
At US$ 1200/oz. the marginal cutoff grade per tonne of ore is approximately 0.09 grams
per tonne.
Marginal Cut-off Grade = (ProcessCost+G&A Cost) = $3.38/t = 0.087g/t
Gold Price ($/g)
$38.58/g
As the modeling of the ore body shows large continuous volumes of economic grades,
no ore loss has been applied to the schedule as mining is scheduled at a much higher
cutoff than the true internal cutoff grade. Consequently scheduled ore is rarely bounded
by truly uneconomic material and as such ore loss due to strict dilution control measures
is unlikely.
Dilution of the higher grade ore will occur and has been modeled in the schedule by
including an additional 7 percent at a grade of 0.15 g/t. This material is included to
account for some mixing of higher grade material with lower grade but still economic
material at the interfaces of the ore boundaries. The 0.15 g/t dilution grade is below the
lowest cutoff grade for any of the given years which ranges between .20 g/t and 0.35 g/t
recovered gold.
To account for this dilution, 93 percent of the desired ore tonnage was scheduled for any
given time period and the additional 7 percent was assumed to be dilution incurred in
the mining process at the grade of 0.15 g/t. For example, in Year 4, 9,300 ktonnes at a
head grade of 0.73 g/t contained gold are scheduled to the crusher. It was modeled that
an additional 700 ktonnes of dilution will also be sent to the crusher in Year 4 with an
96

assumed grade of 0.150 g/t contained gold. This is a realistic estimate for dilution as
5,659 ktonnes of material greater than 0.15 g/t but less than the cutoff grade of 0.280 g/t
are sent to the waste dump in this period. The average head grade of this economic but
sub-grade material is 0.246 g/t recoverable gold. Life of mine, the average block grade
of blocks bounding scheduled ore blocks is .22 g/t recoverable gold.
The resulting mining and crusher feed schedule with material movements is provided in
Table 16.3. Cutoff grade for material sent to the crusher is always maximized well above
the true breakeven cutoff grade in an effort to increase gold produced for a given
throughput in time. In Year 2 of mining, a small low grade stockpile is generated when
the crusher cutoff grade is 0.35 g/t recoverable gold. This is to keep a consistent mining
rate as well as maximize the grade of material fed to the crusher in early years.
The cutoff grade for the low grade stockpile in this period is 0.30 g/t recoverable gold.
This material is planned for re-handle to the crusher in Years 10 and 12. In total,
385,000 tonnes of ore is stockpiled in pre-production and re-handled to the crusher in
the first quarter of crusher operation. A graphical representation of the schedule is given
in Figure 16.3 showing ore tonnes sent to crusher, waste tonnes mined, and recoverable
gold grade sent to the heap leach pad.
The drop in ounce production in Years 7 - 10 is a result of the commencement of mining
in the early stages at Erato. As the drill density at Erato is less, a larger proportion of the
material inside the ultimate pit shell is in the inferred category and hence cannot be
included in this study. It is expected that as exploration activities continue in 2012 and
2013, more material will be upgraded from inferred and this drop in ounces produced
can be reduced. Increased understanding of the Erato orebody will also lead to more
optimized stage designs which will also improve the production schedule in the later
years.
97

Table 16.4
Material Movements Total Annual Summary
Parameter
Cut-off Grade
yr1
yr2
yr3
yr4
yr5
0.28
yr6
0.26
yr7
0.26
yr8
0.26
yr9
0.24
yr10
0.22
0.20
yr11
yr12
0.26
Total
rec. Au
0.28
0.35
0.30
0.25
Total Mined
(bcm)
4,317,300
6,452,700
6,411,300
14,113,500
14,269,100
14,371,100
14,348,400
14,379,800
14,325,400
14,299,800
12,824,800
549,500
130,662,700
Total Mined
(t)
10,064,000
15,127,000
15,193,000
33,466,000
33,500,000
33,500,000
33,500,000
33,500,000
33,500,000
33,500,000
30,433,000
1,323,000
306,606,000
Waste Mined
(bcm)
2,735,997
4,065,867
4,311,687
9,936,188
10,081,896
10,164,218
10,132,056
10,152,273
10,097,873
10,304,795
8,664,585
156,005
90,803,440
Waste Mined
(t)
6,314,000
9,471,880
10,193,000
23,466,000
23,500,000
23,500,000
23,500,000
23,500,000
23,500,000
23,959,000
20,433,000
375,000
211,711,880
Ore Mined
(bcm)
1,581,303
2,386,833
2,099,613
4,177,312
4,187,204
4,206,882
4,216,344
4,227,527
4,227,527
3,995,005
4,160,215
393,495
39,859,260
Ore Mined
(t)
3,750,000
5,655,120
5,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
9,541,000
10,000,000
948,000
94,894,120
Stkpl Rehandle
(bcm)
162,066
193,141
82,559
437,766
Stkpl Rehandle
(t)
385,000
459,000
196,120
1,040,120
Au
Ore Grade (Au)
Insitu (g/t)
0.915
0.966
0.957
0.730
0.812
0.870
0.639
0.658
0.549
0.562
0.815
1.508
0.750
Ounces (Au)
Insitu (Oz)
110,375
175,557
153,784
234,711
261,160
279,822
205,529
211,505
176,540
172,454
262,012
45,973
2,289,423
Ore Grade (Au)
Rec. (g/t)
0.806
0.849
0.837
0.630
0.701
0.753
0.561
0.578
0.493
0.521
0.764
1.414
0.665
Ounces (Au)
Rec (Oz)
97,217
154,365
134,631
202,544
225,501
241,967
180,275
185,957
158,656
159,688
245,558
43,086
2,029,444
Ore Grade (Ag)
Insitu (g/t)
2.12
3.16
5.02
4.85
3.76
3.94
3.43
3.00
2.27
2.14
2.35
3.20
Ounces (Ag)
Insitu (Oz)
255,464
574,921
806,334
1,558,899
1,209,553
1,265,710
1,104,352
963,816
728,417
656,738
754,352
97,612
Ore Grade (Ag)
Rec. (g/t)
0.64
0.97
1.56
1.54
1.19
1.25
1.19
1.02
1.00
1.19
1.37
1.87
Ounces (Ag)
Rec (Oz)
77,656
176,065
251,430
495,976
384,109
400,444
383,821
327,271
320,700
364,514
441,372
57,113
1.67
2.04
2.35
2.35
2.35
2.35
2.35
2.35
2.51
2.04
0.40
Ag
Strip Ratio
(W:O)
1.68
3.27
9,976,166
1.21
3,680,473
2.23
Material Processed Total

Tonnes Crushed
(t)
3,750,000
5,000,000
5,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
1,144,120
94,894,120
Au
Feed Grade
Insitu (g/t)
0.915
1.046
0.957
0.730
0.812
0.870
0.639
0.658
0.549
0.553
0.815
1.310
0.750
Feed Ounces
Insitu (Oz)
110,375
168,122
153,784
234,711
261,160
279,822
205,529
211,505
176,540
177,667
262,012
48,195
2,289,423
Feed Grade
Rec. (g/t)
0.806
0.920
0.837
0.630
0.701
0.753
0.561
0.578
0.493
0.511
0.764
1.224
0.665
Feed Ounces
Rec. (Oz)
97,217
147,858
134,631
202,544
225,501
241,967
180,275
185,957
158,656
164,249
245,558
45,032
2,029,444
Ag
Feed Grade
Insitu (g/t)
2.12
3.27
5.02
4.85
3.76
3.94
3.43
3.00
2.27
2.15
2.35
3.05
Feed Ounces
Insitu (Oz)
255,464
525,125
806,334
1,558,899
1,209,553
1,265,710
1,104,352
963,816
728,417
691,955
754,352
112,192
Feed Grade
Rec. (g/t)
0.64
1.00
1.56
1.54
1.19
1.25
1.19
1.02
1.00
1.17
1.37
1.68
Feed Ounces
Rec (Oz)
77,656
160,632
251,430
495,976
384,109
400,444
383,821
327,271
320,700
375,437
441,372
61,622
3.27
9,976,166
1.21
3,680,473
98

Figure 16.3
Graphical Presentation of Mine Schedule
16.3 Waste Movement

At Amulsar, the distance from the pit to the waste dump is approximately 4.5 km. The
waste dump, designed by Golder, has a design capacity of 158 million tonnes with room
for expansion subject to environmental approvals. Over the mine life, 150.5 million
tonnes of waste are sent to the dump. At the end of the mine life, an opportunity to back
fill the pits becomes available. This has three benefits, namely:
Decreasing the haulage requirements which reduce operating costs.
Increasing total waste storage capacity with minimal environmental impact and.
The prevention of the formation of pit lakes after mining is complete.
In total, 61.1 million tonnes primarily from the latter stages of Erato are scheduled to be
backfilled into the Artavasdes and Tigranes pits. Figure 16.4 shows the final planned
backfill of the mining phases. Table 16.4 outlines the waste movements based on the
schedule.
In Years 4, 5 and 6, waste material is sent to a waste stockpile east of the Artavasdes
pit. This material below the cutoff grade in Years 4 through 6 is stockpiled rather than
sent to the waste dump to prevent an unnecessary spike of trucks during these years. It
is re-handled to the pit backfill in Year 11 when more truck shifts are available.
99

Figure 16.4
Pit Backfill at End of Mine Life
100

Table 16.5
Waste Movement Required for Mine Schedule
Period
To Dump
ktonnes
Yr1
6,314
6,314
Yr2
9,472
9,472
Yr3
10,193
10,193
yr4
19,666
3,800
23,466
yr5
19,700
3,800
23,500
yr6
23,500
23,500
yr7
23,500
23,500
yr8
23,500
23,500
yr9
8,862
14,638
23,500
yr10
5,875
18,084
23,959
yr11
20,433
20,433
yr12
7,975
7,975
Total
150,582
To bkfill
ktonnes
61,130
To Stkpl
ktonnes
7,600
Total Waste Moved

ktonnes
219,312
16.4 Low Grade Stockpiles

As discussed previously, a small low grade stockpile was designed near the crusher to
hold 655,000 tonnes of low grade material between 0.30 g/t and 0.35 g/t mined in the
second year of mining. This provides a buffer of approximately 3 weeks of feed capacity
to the crusher should mining in the pit be interrupted for an extended period. If not
rehandled earlier, this lower grade tonnage is scheduled to be sent to the crusher at the
end of mine life.
Figure 16.5 shows the proposed stockpiles at the end of Year 10 in the mine life.
101

Figure 16.5
Proposed Stockpiles at the End of Year 10
102

16.5 External Haul Roads and Time Sequence Drawings

As all three deposits daylight at the top of hills, initial access to the phases will be with
external haul roads. One main waste dump access road has been designed to handle all
material from the Tigranes / Artavasdes pit as well as the Erato pit later in the mine life.
Temporary haul roads will be used to terrace down the hillside until such time as the pit
no longer daylights, at approximately 2900RL to 2850RL. At this point permanent
internal haul roads and ramps will be constructed to ensure access to the deeper
benches extracted later in the mine life.
The design of haul roads and the planned pit progression can be seen in Figures 16.6
through 16.10.
103

Figure 16.6
End of Production
104

Figure 16.7
End of Year
105

Figure 16.8
End of Year 5
106

Figure 16.9
End of Year 10
107

Figure 16.10 End of Year 12
108

16.6 Mining Equipment Fleet

Mine mobile equipment was selected to meet the production requirements as outlined in
Table 16.3. Although operations are targeted to run 365 days per annum, it has been
assumed that inclement weather will render this impossible for 35 days per annum.
Consequently, mining activities are scheduled for 330 days per annum. Shift lengths for
production personnel will be 11 hours with two shifts in a day. Maintenance personnel
both for fixed plant and mobile equipment will work 12 hour shifts, day shift and night
shift. Refueling and minor maintenance work / servicing will be performed in the 2 hours
between shifts. The bulk of the lost mining days are planned to occur in the winter
months during the first and fourth quarters. A three crew rotation is planned for the
Armenian workforce consisting of 14 days on and 7 days off. Expatriates will be working
a 9 weeks on, 3 weeks off roster.
16.6.1
Drill and Blast
Blast hole drilling will be carried out with a fleet of Sandvik DP1500i drills. These
machines are versatile rigs capable of drilling vertical through to horizontal holes of
diameter 80mm 140 mm. Due to the undulating terrain in the early years of mining
these smaller track mounted rigs were given preference to larger blasthole rigs to
provide flexibility in blast design and allow easier access across the deposit. Although
contractors exist in country to provide drilling services, for the purposes of this study it
has been assumed that Lydian will purchase and operate these machines.
It is planned to drill 127 mm holes at 3.68 meter spacing. These drill holes will be
sampled and assayed for ore control. Dry blast holes will be loaded with ANFO and wet
holes with emulsion. A number of suppliers exist in country for the provision of
explosives and Lydian has already completed preliminary discussions regards the
supply and management of ANFO, emulsion and packaged explosives in country.
Capital costs have been allocated to account for the construction of magazines and the
purchase of specialized explosives trucks. However, this is primarily due to the early
stages of negotiations with in country suppliers; it is likely that Lydian will ultimately
outsource the explosives supply and management.
16.6.2
Load and Haul
In Years 1-3 the primary loading units will be one 180t Cat 6018 and one 290t Cat 6030
hydraulic backhoe excavator. These will be supplemented by an additional, Cat 6018
and Cat 6030 hydraulic backhoe excavators in Year 4.
The smaller machines were chosen in the earlier years to better facilitate the mining of
the hillside. Backhoe configuration was chosen in preference to face shovel as it allows
for greater selectivity during ore mining as well as providing increased flexibility during
the construction phase and early years of mining. A number of these machines are
already in use elsewhere in Armenia and it is expected that access to trained operators
and mechanics will be simpler due to their prevalence.
For the expansion to 10Mtpa in Year 4, Cat 6030s were chosen as they allow for greater
production due to their increased size but offer sufficient similarities in terms of controls
etc that upgrading the skills of existing operators should not be overly arduous.
109

An additional Caterpillar 992K loader has been included in the loading units for stockpile
re handling to the crusher and other ancillary work. This machine may be used as a
substitute for the Cat 6018 excavators if required.
Hauling of material from the pit to the crusher, dump and stockpiles will be accomplished
with 90t Caterpillar 777G Haul Trucks. The 777G truck is considered an optimum match
for the Cat 6018 excavator and its versatility and size will offer considerable advantages
in the early years of mining as well as construction. Current capital and operating cost
estimations assume that the Cat 777G is used for the duration of the mine life. However,
subject to exploration drilling and increases in ultimate pit size and mine life,
consideration may be given to utilizing 135t Cat 785 trucks as a match for the Cat 6030
excavators in Year 4.
Haul truck productivity was based on a detailed haul time simulation over measured haul
profiles. Truck performance characteristics were based on Caterpillar published truck
specifications for the Cat 777G model. Haul profiles were measured for each material
type, from each pushback to each destination on a quarterly/yearly basis. These profiles
account for the gradient and design of the haul road so as to accurately model truck
speed and cycle times for each period in the mine schedule.
Equipment productivity for excavators and ancillary equipment was calculated on a shift
basis based on Amulsar rock and operating conditions. Productivity for each machine
was calculated based on shift length, planned and unplanned stoppages, machine
utilization, and operator effectiveness. Calculated productivities were then benchmarked
against comparable machines in similar environments.
The productivity per shift and the tonnage requirements set the number of operating
shifts needed per year to move the material. Availability and utilization were applied to
determine the required number of operating units and overall fleet size which can be
viewed in Table 16.5.
16.6.3
Ancillary Equipment
Caterpillar D10 tractor dozers have been selected as the primary materials handling
option for the waste dump, the stockpiles, road construction and for in pit operations. To
supplement the track dozers, Caterpillar 824 wheel dozers will be used in loading areas
and on haul roads to keep floors clean and free of debris that may damage tyres. A
Caterpillar 16M grader will also be purchased to manage haul roads and dumps to
ensure optimum performance from trucks and reduce maintenance costs.
Dust suppression will be provided by a Caterpillar 777G water truck that will source
water from catchment areas adjacent to the haul road, waste dump and crushing facility.
Light construction work, trenching and general housekeeping will be handled using a
Caterpillar 336 excavator.
Table 16.6 summarizes the mine mobile equipment fleet for the mine life.
110

Table 16.6
Summary of Mine Mobile Equipment Fleet Life of Mine

Equipment Requirements by Time Period
Time Period
Yr1
Yr
1
Yr
2
Yr
3
Yr
4
Yr
5
Yr
6
Yr
7
Yr
8
Yr
9
Yr1
0
Yr1
1
Yr1
2
Sandvik DP1500 Drill
10.0 cu m Exc
17.0 cu m Exc
Cat 777 Haul Truck
19
19
20
37
37
37
37
34
25
24
24
18
Cat D10 Track Dozers
Cat 824G Wheel Dozer
Cat 16M Motor Grader
Cat 777 Water Truck
Cat 992G Wheel

Loader
Cat 336DL Excavator
TOTAL
32
31
33
56
56
56
56
53
44
43
41
30
Equipment Type
16.6.4
Personnel
Salaried staff requirements are expected to be 44 persons per year; 16 expatriates and
28 nationals (Table 16.7). Labor requirements for operations and maintenance increase
to approximately 208 persons in the last quarter of Year 1. Labor requirements remain in
the lower 200s of persons until Year 4 when the labor required increases to 345
persons. The persons required remains in the mid 300s until Year 8 when the personnel
requirements begin to decrease. An allowance for vacation, sickness and absenteeism
(VSA) is included in the overall labor requirement. Table 16.8 is a summary of the mine
operations and maintenance personnel requirements.
111

Table 16.7
JOB TITLE
Salaried Staff Labor Requirements

Personnel by Time Period
Yr -1
Mine Manager
Yr1
Yr2
Yr3
Yr4
Yr5
Yr6
Yr7
Yr8
Yr9
Yr10
Yr11
Yr12
MINE
OPERATIONS:
Mine
Superintendant
Mine Leading
Mine Operations Total
12
12
12
12
12
12
12
12
12
12
12
10
MAINTENANCE:
Maint. Manager
Maint.
Superintendent
MINE
Maint. Lead Hand
Mine Maintenance Total
10
10
10
10
10
10
10
10
10
10
10
10
Technical Services
Super. Senior Mine
Engineer Mining
Engineer
Surveyor
Mine Engineering Total
Senior Mine Geologist
Grade Control Geologist
Sr Geotechnical
Engineer Geotechnical
MINE ENGINEERING:
MINE GEOLOGY:
Engineer
Mine Geology Total
10
12
12
12
12
12
12
12
12
12
12
TOTAL PERSONNEL
14
42
44
44
44
44
44
44
44
44
44
44
30
112

Table 16.8
Mine Hourly Labor Requirements
JOB TITLE
Personnel by Time Period

Yr-1
Yr1
Yr2
Yr3
Yr4
Yr5
Yr6
Yr7
Yr8
Yr9
Yr10
Yr11
Yr12
Drill Operator
18
18
18
18
18
18
18
17
Shovel
Operator
Loader Operator
Haul Truck Driver
54
56
59
109
110
111
111
101
73
71
71
54
Track Dozer Operator
Wheel Dozer Operator
Grader Operator
Service Crew
12
12
12
12
12
12
12
12
12
12
12
107
109
112
178
179
180
180
170
142
141
136
88
Mechanic
41
42
43
74
74
74
74
69
56
55
52
29
Welder
20
21
21
36
36
36
36
33
27
27
26
14
Electronics Tech.
11
11
11
11
10
Fuel & Lube Man
Tire Man
Laborer
Maintenance Total
82
85
86
136
136
136
136
127
107
105
101
63
VS&A at 10%
19
19
20
31
32
32
32
30
25
25
24
15
17
208
213
218
345
347
348
348
327
274
271
261
166
1.50
0.77
0.78
0.77
0.76
0.76
0.76
0.76
0.75
0.75
0.74
0.74
0.72
MINE OPERATIONS:
Blasting Crew
Floating Operator
Laborer
Operations Total
MINE MAINTENANCE:
TOTAL LABOR
Maint./Operations Ratio
113

17
RECOVERY METHODS
underway and due for completion in August 2013. Development of the Amulsar Project
will be conducted in two phases:
Phase I is the construction of a facility to process ore at a rate of 5 Mtpa.
In the third year of operation Phase II will be constructed to increase throughput to

10 Mtpa for year four. The Phase II expansion will essentially entail installation of
a duplicate Phase I facility, though some of the unit operations and ore handling
equipment will be initially installed to support the 10 Mtpa processing rate.
The Overall Flowsheet is shown below in Figure 17.1.

Figure 17.1
Amulsar Overall Flowsheet
17.1 Crushing Facility

Ore is processed through three stages of crushing to a target crush size of 100 percent
minus 12 mm.
114

17.1.1
Primary Crushing
Run-of-mine ore is delivered to the primary crusher feed hopper, or adjacent stockpile,
by rear-dump haul trucks. A static grizzly screen above the hopper limits the top size of
rock fed to the crusher to 700 mm. Below the hopper, an apron feed transfers ore at a
controlled rate to the vibrating grizzly screen. Grizzly screen oversize, plus 100 mm
material, feeds the primary jaw crusher. Grizzly screen undersize joins the crusher
product on the primary crusher discharge conveyor which feeds the primary crusher
transfer conveyor taking the ore to the second stage of crushing. The primary crushing
circuit reduces the size of run-of-mine from a maximum of 700 mm to approximately 80
percent passing 165 mm. The rock breaker is installed to serve the static grizzly and the
monorail crane and air compressor support jaw crusher operation. Dust is controlled at
the feed pocket by water sprays and at the screens and transfer points by dust
collection/filtration in the bag house. Tramp iron is removed from the crushed product by
way of the magnet mounted above the discharge of the discharge conveyor.
In the Phase II expansion, the entire primary crushing circuit is duplicated except both
phases share a common run-of-mine stockpile, dust bag house, air compressor and
transfer conveyor.
17.1.2
Secondary Crushing
Primary crushed product is fed into the coarse ore storage bin. Two apron feeders
transfer the ore to the coarse ore transfer conveyor which feed ore at a controlled rate to
the secondary vibrating screen deck. The screen deck oversize, plus 100 mm and plus
28 mm, is fed to the secondary cone crusher. Screen deck undersize joins the
secondary crusher product on a transfer conveyor for delivery to the third stage of
crushing. Secondary crushing reduces the primary crushed product to approximately 80
percent passing 32 mm. The crane and air compressor is installed to support crushing
operations and dust is controlled at the screen deck and crusher by collection/filtration.
The Phase II expansion shares the coarse ore storage bin, crane, air compressor and
product transfer conveyor with Phase I, but requires installation of two additional apron
feeders, one vibrating screen deck and one secondary cone crusher.
17.1.3
Tertiary Crushing
Secondary crushed product is discharged onto the fine ore screen tripper conveyor and
delivered to the fine ore screen feed bin. The belt feeder delivers ore from the bin to the
double deck vibrating screen. Screen oversize, plus 30 mm and plus 17 mm, reports to
the screen oversize tripper conveyor and discharged into the tertiary crusher feed bin.
Two belt feeders deliver the screen oversize material to two tertiary short cone crushers.
The tertiary crushed product is discharged onto the fine ore screen tripper conveyor and
re-circulates back to the vibrating screen. The screen undersize, approximately 80
percent passing 12 mm, reports to the fine ore collection conveyor which discharges
onto the fine ore transfer conveyor. The fine ore transfer conveyor delivers ore to the
crushed ore tripper conveyor and into the crushed ore surge bin. Four belt feeders
transfer crushed ore from the surge bin to the overland conveyor. Tertiary crushing is
115

supported by the air compressor and crane hoist. Dust is controlled at all transfer points,
the screen and crushers by collection/filtration.
The Phase II expansion requires installation of two second tertiary vibrating screens with
belt feeders and two additional tertiary cone crushers with belt feeders.
17.1.4
Stacking
The current overland conveyor system consists of three connecting overland conveyors,
followed by a series of twenty four portable conveyors, ending with a radial stacking
conveyor. The first conveyor is approximately 4 Km in length and spans from the
crushing plant to the northwest corner of the heap leach pad. The second conveyor is
approximately 1.2 Km in length and continues south along the west side of the heap
leach pad. The third conveyor is approximately 1.2 Km and includes a tripper conveyor.
The tripper provides stacking capability over the area of the pad without a need to
increase the number of portable conveyors.
The overland conveyor system was designed by a third party vendor, Paakkola
Conveyors OY. The 4 kilometer main conveyor has a proposed straight line routing
down the mountain from the crushing plant to the heap leach pad. Paakkola proposed
this routing due to the complexity of placing bends in the conveyor, which would require
900 times the belt, resulting in a minimum of approximately 1 kilometer in length to place
a curve in the conveyor. Utilizing multiple shorter conveyors would require more
maintenance and conveyor components (e.g. drives, drive ends, tail ends, etc.). The
trade-off of using a curved conveyor or multiple conveyors versus the suggested straight
routing resulted in no advantages in cost savings or required earthworks. The
succeeding overland conveyors also have proposed straight-line routing design based
on the same criteria. Ore is discharged from the stacking conveyor onto the heap leach
pad in 8 meter high lifts.
Pebble lime is added on the overland conveyor from a storage silo via screw feeders
with the rate of lime addition varying with tonnage.
17.2 Heap Leach Facility
Golder completed and submitted to Lydian a separate document detailing a feasibilitylevel design and cost estimate for the heap leach facility including the leach pad and
collection ponds (Golder, 2012c). Prior to selecting the final location (known as Site 6), a
thorough review of Heap Leach Facility Site Alternatives Analysis (Golder, 2012j) was
undertaken jointly by Golder, WAI and Geoteam.
Heap leaching consists of stacking the crushed ore on the leach pad in 8m lifts and
leaching each individual lift to extract the gold and silver. Barren leach solution (BLS)
containing approximately 0.5 g/l sodium cyanide (approximately 250 ppm free cyanide)
is applied to the ore heap surface using drippers at an application rate of 10 l/h/m2. The
overall leaching cycle for the ore is at least 140 days total with 30 days of primary
leaching, 80 days of secondary leaching and 30 days of leaching as a buried lift. This is
equivalent to a solution-to-ore application ratio of 3 cubic meters per tonne of ore.
Leaching commences as the BLS piping is installed on the surface of the first heap lift
with a sufficient area to accommodate the applied solution flow rate.
116

The solution percolates through the ore to the impermeable pad liner where it collects in
a network of perforated solution collection drain pipes installed within a 0.6 meter thick
granular cover drain fill layer above the liner. The leaching process is carried out as a
two-stage counter-current leach in order to maximize the gold tenor to the gold recovery
process. Leach solution of intermediate strength is used as recycle leach solution (ILS)
to leach freshly stacked ore. This produces a higher gold grade pregnant leach solution
(PLS) reporting to the pregnant pond.
17.2.1
Leach Pad
The lined leach pad will be constructed in three phases to provide an ultimate ore heap
of 95 Mt stacked in three stages. Each pad phase will be divided into two cells for a total
of six cells.
The Phase 1 (Starter) pad will be constructed at the southern end of the gently sloping
plateau at Site 6 with grade fill placed to maintain pad grades between 0.5% and 3% to
accommodate the stability requirements. In addition to stability considerations, the
grading in Phase 1 accommodates the solution drainage requirements and provides a
sufficient surface to stack the first ore lift on the Phase 1 pad to accommodate the active
leaching area requirement. The toe fill will extend within the central valley of the site
northward from the southern pad toe limits until it daylights into the existing ground.
Ore will be stacked on the Phase 1 pad in a maximum of seven 8 m thick, horizontal lifts
to develop a Stage 1 ore heap with a capacity of 18 Mt during the initial 3.3 years of
operations. The Phase 1 leach pad will have an area of 479,690 m2 and the Stage 1
heap will have a top surface elevation of 2,229 m. The Phase 1 leach pad may be
constructed in sub-phases to further minimize initial capital costs.
The Phase 2 leach pad will consist of a 465,000 m2 expansion of the pad to the north,
providing for the stacking of the Stage 2 ore heap above the Stage 1 ore heap and
Phase 2 leach pad. The Stage 2 ore heap will consist of five additional horizontal lifts
above the Stage 1 ore heap level and will have a nominal top surface elevation of 2269
m. The Stage 2 ore heap will add capacity for an additional 27 Mt, which is projected to
occur through the end of Year 6 of operations.
The Phase 3 leach pad will consist of a final 461,120 m2 expansion of the leach pad to
the north, providing for the stacking of the Stage 3 ore heap above Stages 1 and 2 and
the Phase 3 leach pad in horizontal lifts for a nominal maximum heap height of 72 m
above the ultimate leach pad, with the heap top lifts stepped to match the sloping pad
grade. Stacking of the Stage 3 ore heap is projected to continue through sloping pad
grade. Stacking of the Stage 3 ore heap is projected to continue through Year 11 of
operations to provide an approximate total ore heap capacity on the Ultimate pad of 95
Mt.
If additional leachable ore is identified beyond the Stage 3 ore heap capacity, a fourth
pad expansion to the north may be constructed. Up to 120 Mt of ore heap may be
stacked on the pad including the Phase 4 expansion. The pad will have a basal
composite liner system consisting of a 2-mm (80-mil) linear low-density polyethylene
(LLDPE) geomembrane underlain by a 0.3-m minimum thick compacted lowpermeability soil liner. The geo-membrane will be smooth in most areas and will include
117

a double-side textured strip along the downgradient toe of the pad to enhance heap
stability.
The drainpipe network above the leach pad liner will be embedded within the 0.6 m thick
liner cover drain fill composed of free-draining, hard, and durable granular material.
Solution and storm runoff flows collected by the drainpipe network in each pad cell will
be routed via transfer pipes through the leach pad cell spillways to the process ponds,
and will be directed by valve control to either the pregnant or intermediate ponds. A
limited and targeted leak collection and recovery system (LCRS) will be constructed
beneath the leach pad composite liner that will consist of a series of transmissive drains
connected to down-gradient sumps. The LCRS drains will be underlain by a secondary
LLDPE geo-membrane liner. Should a leak ever occur through the pad liner and be
intercepted by the LCRS drain, it would flow through the drain to the LCRS sump
located at the low point of each pad cell, where it would be removed via a pump. The
LCRS will be constructed beneath the pad areas where the highest potential for
elevated hydraulic head and/or concentrated flows occur, e.g., at the down-gradient cell
divider berm locations and beneath the primary solution collection pipes.
A stock-proof mesh fence with locking gates will be constructed around the perimeter of
the leach pad to prevent wildlife from reaching the pad and ore heap. An additional
purpose of the fence is for public safety and to deter unauthorized access into the pad
area.
Collection Ponds
The collection ponds consist of process (PLS and ILS) ponds and a storm event (storm)
pond sized in accordance with the project design criteria. Additionally, an overflow pond
will be constructed down-gradient of the storm pond. The collection ponds and overflow
pond will be constructed during the Phase 1 leach pad construction. The collection pond
crest elevation will be approximately 15 m lower than the pads lowest point for cut and
fill quantity optimization.
Solution and storm water flows from the pad cells will be routed to the process ponds. A
common divider berm will be constructed between the pregnant and intermediate ponds
for solution and storm water overflow conveyance between these ponds. A spillway will
be constructed between the intermediate pond and the storm pond for storm water
overflow conveyance to the storm pond.
The combined process pond capacity is approximately 94,600 m3 to bottom of
freeboard depth. The storm pond capacity is approximately 218,040 m3 to bottom of
freeboard depth.
The process ponds are sized to contain 8 hours of normal operational solution flow and
24 hours of solution drain-down flow from the ore heap for the Ultimate pad in case of
operational shutdown due to pump failure or power loss. Considering a maximum
solution flow rate of 2,848 m3/hr the 8 hours of normal operational storage and 24 hours
of emergency drain-down storage require 22,784 m3 and 68,352 m3, respectively, for a
combined volume of 91,136 m3. The approximate process pond capacity of 94,600 m3
exceeds this combined volume, and therefore the ponds provide for full passive
containment below their freeboard for these flows.
118

The storm pond was sized to accommodate project design criteria of 150% of the 100year, 24-hour design storm event runoff from the Ultimate pad and collection pond
areas. Considering a 100-year, 24-hour design storm depth of 95 mm and an ultimate
area of approximately 1,405,800 m2 across which precipitation would be collected,
150% of the design storm over this area would generate a maximum runoff of 200,330
m3 (assuming no uptake into the heap). The storm pond capacity of approximately
218,040 m3 exceeds this design runoff volume, and therefore the storm pond provides
for full containment below its freeboard of the design contingency containment criteria.
The storage capacity of the process ponds and storm pond were also evaluated against
the expected inflows that would occur during the wettest month on record. A maximum
monthly precipitation of 213.8 mm was observed in the 41 years of precipitation data.
This precipitation would generate a maximum containment volume of 300,560 m3 from
the ultimate facility. The heap is expected to retain a portion of this volume through
uptake of the ore from the delivered water content of 3% to its field capacity water
content of 10%. Considering an ore stacking rate of 10 Mtpa (833,300 Mt per month),
the ore will uptake approximately 58, r or so300 m3 of wate lution during this month.
Considering 8 hours of normal operational flow storage (22,800 m3), 300,600 m3 of
water from precipitation, and 58,300 m3 of water or solution uptake into the heap, the
net volume in the ponds at the end of the wettest month on record would be 265,000
m3. The approximate combined process ponds and storm pond capacity of 312,640 m3
exceeds this net volume, and therefore the ponds would provide for full containment
below their freeboard during this month.
An additional overflow pond will be constructed downgradient of the storm pond to
contain potential overflow discharge from the storm pond, should a low probability event
or series of events ever occur that exceed the project design containment criteria.
The process ponds will have a composite double geo-membrane liner system comprised
of top (primary) and bottom (secondary) geo-membranes, with an intermediate LCRS
layer. The bottom geo-membrane will be underlain by a 0.3 m thick compacted lowpermeability soil liner. The bottom geo-membrane will be a 2-mm (80-mil) thick smooth
LLDPE and the top geo-membrane will be a 2-mm (80-mil) thick single-side textured
high-density polyethylene (HDPE) with texturing at top for traction (as a safety
consideration). The LCRS between the two geo-membranes will be a transmissive geocomposite that is connected to a LCRS sump. Should a leak ever occur through the top
geo-membrane, it would flow through the geo-composite to the LCRS sump, where it
would be removed via a pump. The design intent of the LCRS is to ensure that no
hydraulic head occurs on the bottom geo-membrane, thereby removing any driving force
required for seepage to occur through that geo-membrane.
The storm pond will have a composite liner system consisting of 2-mm (80-mil) singleside textured HDPE geomembrane with texturing at top for traction, underlain by 0.3-m
minimum thickness compacted low-permeability soil liner. A 0.3 m thick layer of cover fill
will be placed at the bottom of the storm pond to protect the exposed geomembrane
liner from wind and weather damage considering that this pond will be empty under
normal operating conditions.
The overflow pond will be lined with a 0.3 m thick compacted low-permeability soil liner.
119

the collection ponds to prevent wildlife from reaching the fluids in the ponds. An
additional purpose of the fence is for public safety and to deter unauthorized access into
the collection ponds area.
Top netting will be provided above the process ponds fence to prevent birds from
accessing the fluids in the ponds. If occasional bird access still occurs, additional
deterrent will be employed by using floating plastic balls.
17.3 Process Plant
The process plant consists of an ADR Plant, electrowinning cells, a refinery and reagent
handling equipment. For the Phase II expansion, essentially a duplicate carbon
adsorption train of five stages and electrowinning cell will be installed; the refinery and
reagent handling facilities will be initially sized to accommodate the increase in metal
production.
The entire process plant designed by Summit Valley Technologies treats seven tonne
batches of pregnant 6 x 16 mesh carbon. The plant processing steps include carbon
adsorption, carbon acid wash, carbon stripping, carbon regeneration, carbon handling,
sodium cyanide and sodium hydroxide mix/storage, electrowinning, and refining.
The sourcing, transportation, handling, use and disposal of any hazardous substances
will be regulated in accordance with relevant framework management plans prepared in
accordance with international best practice to support the ESIA submission.
Brief descriptions of each processing step are presented below.
17.3.1
Carbon Adsorption
Pregnant leach solution is pumped into the ADR plant, passes over a trash screen, and
enters the bottom of the first carbon adsorption column. The solution flows up through
the bed of carbon, over the column top and down into the bottom of the second carbon
adsorption column. This is repeated for a total of five carbon adsorption stages and the
design is such that solution flows by gravity through the columns. Upon exiting the fifth
stage of adsorption the solution, now barren, flows through a carbon safety screen and
into the barren solution surge tank. Barren solution is pumped back to irrigate the heap
leach pad.
The carbon flows through the five stages of adsorption counter-current to the solution.
Periodically, once or twice per day, carbon is pumped from the first carbon adsorption
column to the acid wash vessel, or alternatively, the strip vessel. Carbon from the
second carbon adsorption column is pumped into the first column, the third into the
second, and so on. Fresh or regenerated column is added to the fifth carbon adsorption
column. Wire samplers are installed on the pregnant and barren leach solution lines.
The adsorption plant contains a safety shower and a sump with pump to return solution
to the fifth carbon adsorption column.
120

For the Phase II expansion, a duplicate set of carbon columns is installed with
associated screens, pumps, and samplers though shares the Phase I sump, shower and
barren solution surge tank.
17.3.2
Carbon Acid Wash
Loaded carbon is preferably pumped to the acid wash vessel prior to stripping. The acid
wash vessel, constructed of fiberglass reinforced plastic, holds seven tonnes of carbon.
Hydrochloric acid, diluted to approximately 3 to 5 percent, recirculates through the
carbon bed for a period of one to two hours. Caustic solution is pumped into the vessel
to neutralize the acid followed by fresh water. The caustic solution and wash water
report to the neutralization tank which is pumped to the barren solution tank via the
carbon safety screen. The washed carbon is pumped to the desorption circuit. The acid
wash circuit is supported by the safety shower, the sump with pump to return solution to
the neutralization tank and the exhaust fan to vent acid fumes to the atmosphere.
The Phase II expansion does not require modification to the acid wash circuit.
17.3.3
Carbon Stripping
Metal is desorbed from the carbon in the strip vessel. The strip vessel holds seven
tonnes of carbon and operates under conditions of elevated temperature and pressure.
Barren strip solution flows up through the bed of carbon, strips gold from the carbon,
and then flows through a carbon bucket trap, a plate and frame heat exchanger to
exchange heat with the barren strip solution, another trim heat exchanger to further cool
the solution before reporting to the electrowinning cell feed tank. Following
electrowinning the discharge solution reports to the barren strip solution tank. Caustic
and sodium cyanide are added to the barren solution, which is pumped through the plate
and frame heat exchanger, past an electric immersion heater, and back into the bottom
of the strip vessel. Once or twice per day, the stripped carbon is transferred preferably to
the kiln dewatering screen for thermal regeneration, or alternatively, to the carbon sizing
screen to be returned to the adsorption circuit. The stripping circuit is supported by the
safety shower, wire samplers on the barren and electrowinning feed solutions and the
sump with pump to discharge solution to the adsorption circuit trash screen.
In the Phase II expansion, an additional strip vessel with all auxiliary equipment is
installed except for the sump and safety shower.
17.3.4
Carbon Regeneration
Stripped carbon is pumped to the kiln dewatering screen. Transfer solution and fine
carbon flow to the carbon fines tank. Carbon sized above 16 mesh reports to the kiln
feed bin. By way of the screw feeder, the carbon is passed into the rotating carbon
reactivation kiln. Under a steam atmosphere and at temperatures between 550 and 650
degrees Celsius, organic fouling is removed from the carbon. Carbon exits the kiln and
reports to the carbon quench tank. The reactivated carbon is pumped to the carbon
sizing screen. Transfer water and fine carbon report to the carbon fines tank. The
carbon sized above 16 mesh reports to the activated carbon storage tank and, as
required, is pumped back into the fifth carbon adsorption column.
121

17.3.5
Carbon Handling
The virgin activated carbon is attritioned prior to being introduced into the adsorption
circuit. The carbon is placed into the carbon attrition tank with process solution and
mechanically agitated for 20 to 30 minutes. This process breaks off any platelets or
sharp corners of the particles, which would have easily broken off while in the adsorption
column. Fines generated in this step can amount to 3 to 5 percent of the initial carbon
weight. The attritioned carbon is pumped to the carbon sizing screen. Properly sized
carbon falls into to the activated carbon storage tank. Fine carbon and transfer solution
report to carbon fines tank. The carbon slurry in the fine carbon storage tank is pumped
to the filter press. The filtrate flows to the barren solution surge tank. The filter cake is
packaged in 50-gallon drums for off-site shipment and treatment
17.3.6
Electrowinning and Smelting
The electrowinning feed solution is pumped from the feed tank into the electrowinning
cell. Cell electrical power is supplied by the rectifier. Metal is deposited from solution
onto stainless steel mesh cathodes. The metal free solution flows to the electrowinning
cell discharge surge tank and from there to the barren strip solution tank. Periodically,
the sludge is washed from the cell cathodes and is pumped to the plate and frame filter
press. The filtrate reports to the barren strip solution tank. The filter cake is placed into
the electric retort. Dry cake is blended with flux in the flux mixer and then smelted in the
induction bullion furnace.
The slag is periodically reprocessed in the furnace though is ultimately disposed of on
the leach pad. The dor is packaged for off-site shipment. The gold room operations are
supported by the exhaust fan over the electrowinning cell, the dust collector over the
furnace, the high pressure water sprayer and the sump with pump discharging spill/wash
solution to the barren solution strip tank.
In the Phase II expansion an additional electrowinning cell and rectifier will be installed.
17.3.7
Reagent Handling
In addition to the aforementioned lime silo, facilities are provided to handle the bulk
caustic and sodium cyanide. Raw water and sodium hydroxide briquettes, or flakes, are
added to the caustic mix tank to a make-up concentration of 25 percent. The caustic/mix
transfer pump re-circulates the solution and then transfers it to the sodium cyanide mix
tank. Sodium cyanide is added to the mix tank to obtain a 20 percent concentration. This
concentrated solution is transferred to the sodium cyanide storage tank and distributed
to the barren solution surge tank and the barren strip solution tank. This reagent
handling station is supported by a safety shower and the sump pump discharge
reporting to the barren solution surge tank.
Metering pumps and lines deliver anti-scalant directly from 50-gallon drums to the
barren solution surge tank.
A pump and solution line delivers concentrated hydrochloric acid from standard drums
or carboys to the dilute acid tank.
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18
INFRASTRUCTURE
18.1 Existing Infrastructure and Services

18.1.1
Location
The Amulsar Gold Project covers an area of 130 km2, located in south central Armenia.
18.1.2
Site Access and Roads
The Amulsar area is located 170 km by sealed road from the capital city of Yerevan, and
15 km by gravel track from the town of Jermuk or 4 km from the town of Gorayk. The
license area straddles the boundary between Vayots-Dzor and Syunik provinces and
incorporates part of the main highway south from Yerevan into Iran.
For the Amulsar project the road will be upgraded from Gorayk to the plant and mine site
to allow for heavy loads. In addition a new bridge will be constructed over the Vorotan
River. The road from Jermuk to the plant and mine site will also be upgraded however
this road is not intended for heavy loads.
18.1.3
Buildings
An employee camp owned by Geoteam will be established at the site. The camp will
have capacity for 200 people in single and shared person accommodation units and the
facilities include a kitchen, laundry, office, workshop, warehouses, sewage treatment
plant, diesel and fuel tanks / mess building and diesel generator. The remaining
employees will live in the nearby towns of Jermuk or Gorayk.
Geoteam has also established an exploration sample preparation and core/sample
storage facility in the village of Gorayk.
It is assumed the contractor will provide a temporary camp to house approximately 550
people located either near the process plant or in a nearby town. Senior management
will also have a small camp in a nearby town for management, vendors and equipment
vendors.
Additional non-process buildings are discussed in Section 18.2.7.
18.1.4
Resources & Infrastructure
Infrastructure near the project site is very good. The town of Jermuk is 15 km to the
north and the village of Gorayk some 6 km to the south east of the Amulsar project.
There is good infrastructure surrounding the Amulsar project. This includes the main
sealed highway between Yerevan and Iran, high tension power lines and substations, a
gas pipeline from Iran, year round water from the Vorotan River and a fibre optic internet
cable. As a consequence of the project location on the top of a mountain ridge, a
reasonable amount of infrastructure will need to be constructed during project
development. In order to fast track the project consideration will be given to
constructing portable or skid mounted equipment.
123

18.1.5
Communications
The exploration camp is currently serviced by satellite dish based internet and TV
connection. Mobile phones work on most parts of the project area and a telephone
connection is available at the exploration camp.
18.1.6
Personnel
As part of the companys commitment to adding value to the local communities and
building capacity in Armenia, the bulk of the steady state Amulsar workforce will be
Armenian. Ideally, the majority of the workforce will be sourced from the four local
towns, Gorayk, Gndevaz, Jermuk and Saravan. However, given the lack of extractive
industry in these communitys it is expected that a significant percentage of the highly
skilled workforce, i.e. engineers, geologists, metallurgists, mechanical and electrical
tradesmen with mining and processing experience will need to be recruited from
Yerevan and other regional centers in the country. Positions that cannot be filled locally
will be staffed with suitably qualified expatriates on fixed term contracts, with the ultimate
goal of developing qualified Armenia individuals for these jobs. Initial expatriate numbers
are expected to be less than 10% of the workforce with a reduction targeted to less than
5% as local staff gain the necessary skills to replace them.
All Armenian operations staff will work a 14 days on 7 days off roster. Personnel
recruited locally will continue to be based in their home town, whilst those recruited from
greater Armenia as well as expatriates will be accommodated in housing provided by the
company in close proximity to the mine. Expatriate personnel will work a 9 weeks on 3
weeks off roster.
The bulk of the workforce, approximately 85%, will be employed in the mining and
processing departments. As on the job training is possible during the construction period
is it expected that come commissioning, the mine operations roles such as equipment
operator, drill and blast assistant, survey assistant and service crew will be filled almost
entirely by local villagers. Training of mobile maintenance personnel will be supported by
the local Caterpillar dealer, Zeppelin who have specialized training facilities in Russia as
well as extensive experience on other mine sites in Armenia.
Processing personnel for operation and maintenance of the crushers, ADR plant and
conveyors will, in all likelihood be sourced from other mining and heavy industrial
projects in Armenia. As Amulsar is the first gold heap leach project in the country,
external expertise in the form of expatriates will be required to set operating procedures
and train the local workforce in the early years.
Literacy rates in Armenia are exceptionally high, over 99% for the adult population. This
rate, coupled with Universities in Yerevan offering degrees in engineering, mining,
geology and finance, amongst other things means that there is a readily accessible pool
of graduates with the appropriate skills to fill the technical and support functions at the
mine. Again, in the early years they will be supported by experienced expatriates to set
up operating procedures but in time this requirement will reduce and it is expected that
the bulk of middle management at the mine will be Armenian.
124

Salaries have been benchmarked against comparable operations in Armenia and it is

expected that given the working roster Amulsar should be able to attract and retain
people from outside the local region.
The total workforce during operation is estimated at around 550 employees. The total
workforce during construction is estimated at 600.
Construction activities will be split into two categories, earthworks, which include the
heap leach and waste dump construction and fabrication, which will encompass the
crushers, ADR plant, overland conveyor and associated infrastructure.
Earthworks associated with the heap leach and waste dump will be completed by local
Armenian contractors with assistance from company equipment on the bulk excavations.
Assessment of local contractors in country has been undertaken and a number of firms
exist that have the capability to complete this work.
Specialized fabrication work associated with the heavy infrastructure will require
significantly more expatriate assistance. It is expected that an international firm will be
awarded an EPCM (Engineer, Procure, Construct, Manage) contract to facilitate the
installation of the crushers, conveyor and ADR plant. This firm will employ the bulk of the
expatriates required for the construction of the project. A part of their mandate will be to
maximize the employment of local personnel and to utilize local sub-contractors where
suitable skills exist.
Housing for construction personnel will be at a dedicated camp onsite sized according to
the construction requirements. The workforce overflow during the peak construction
period would be housed in Jermuk, which would be in the region of 400 people by
current estimations. Post construction, the construction camp would be used during
operations to accommodate about 200 Armenian staff. It is anticipated that expatriate
and the non-local Armenian management workforce expected to be in the region of 150
people will be staying at Jermuk. The balance will be leaving in nearby towns.
Table 18.1 below summarizes the personnel required during operations by department.
125

Table 18.1
Summary of Operations Personnel

Department
Number of Personnel
Mining
350
Processing
134
Logistics & Finance
27
Environment, Health and Safety
19
Site Administration & Security
22
Total
552
Throughout the construction and operations phase of Amulsar, the company intends to
develop the following through its recruitment and training practices:
Improvement of local skills to facilitate initiatives that benefit both Amulsar and the
local community;
The development and dissemination of international best practices to the company

and contractor workforces;
Investment in local businesses to upgrade their ability and increase the amount of
goods and services sourced from local communities around the mine.
A summary of the senior management on the mine site during steady state operations
can be viewed Figure 18.1.
126

Figure 18.1
Mine Senior Management Staff
127

18.1.7
Power Supply
The country has ample electric power from nuclear, hydro and heat electro-power plant
sources. Power lines and sub-station infrastructure are located in close proximity to the
project area. There is also a hydro-electric power plant on the Vorotan River, which is in
the final stages of construction and will have an installed capacity of 1.8 MW. There are
plans to increase the capacity to 2 MW.
Power is not currently reticulated to the Project site although domestic usage power is
available at neighbouring main towns to the south and east. The supply of power in
Armenia is controlled by the Armenian Electrical Networks company (AEN) that owns
the distribution channels of the country in an arrangement whereby in this region power
is purchased from the AEN distribution grid at 35 kV, stepped down at AEN owned
substations and reticulated as required to consumers.
Based on a study by the local Power Network Design Institute, power for the project will
be fed from two sources - 220/110/35 kV Yeghegnadzor and 100/35/10 kV Sisakan
substations through a 110 kV overhead line. There is a 35kV line option from Gorayk
substation, however, it has low reliability due to frequent power outage and using this
line will result in energy losses.
A two-chain 12 km 110 kV overhead power line will be constructed for power supply to
the mine site. This line will connect to Sisakan 110 kV overhead line, which in its turn is
connected on one side to 110 kV rods of the Sisyan 110/35/10 kV substation, and on
the other side to 110 kV rods of the Gndevaz, Vorotan 3 and Vorotan 2 110 kV
substations and to Yeghegnadzor 220/110/35 kV substation. In addition to these lines,
in case of this option, a 12 km 35 kV overhead single-chain line will be built and
connected to Gorayk 35 kV overhead line.
The 110kV rated utility transmission lines will be the primary source for supplying power
to the mine site. The additional 35kV line option will serve backup power in case the 110
kV line fails. The 35kV line will be capable of supplying power to only few processes in
the plant to keep critical equipment on-line for facilitating a safe shut-down or for
keeping critical processes in operation till the primary source of power can come on-line.
The utility transmission voltage (110 kV and 35kV) will be stepped down to 6kV, at the
main substation, for reticulation around the site. From there the power would be
distributed to the crushing plant, waste dump area and water treatment plant, conveying
and stacking system, and the ADR plant. All these areas will have their own dedicated
transformers, where the 6 kV power will be stepped down to 400/220 V.
18.1.8
Power Distribution
Upon review of the most recently proposed equipment list, a total electrical load of
approximately 22.6 MW was determined. The electrical load is summarized in Table
18.2.
128

Table 18.2
Mine Power Requirements (by Area)

Mine Power Requirements (by Area)
Area
Electrical Load (MW)
Crushing Plant
6.7
Overland Conveying + Stacking
4.9
Solution Management Pumps
3.1
ADR Plant + Camp
4.0
Water Treatment Plant + River Pump Station
1.35
Exploration Camp + Offices + Mine Shops
0.8
Reserve capacity (Future additions)
1.75
Total
22.6
The electrical system upon entering the mine site will be configured as a radial type
system. The utility transmission line voltage (110 kV and 35 kV) will be stepped down to
6 kV at the mine main substation, via two 25 MVA, 3 phase, 50 Hz transformers. These
transformers will provide power to a 6 kV switchgear consisting of a main circuit breaker,
a tie breaker and several feeder breakers for distributing power to the crushing area,
waste dump area & water treatment plant, overland conveying and stacking, heap leach
area, ADR plant and camp site.
The mine main substation is located in the crushing area. The crushing area power
requirements include primary crushing, secondary crushing, tertiary crushing and
screening, lime addition, administration offices, warehouse and mine pit requirements.
The 6 kV overhead power line to the waste dump area will distribute power to the water
treatment plant, exploration camp and other facilities in those areas. There will be three
(3) 6 kV overhead transmission lines running along the overland conveyor route; the first
to provide power for overland conveying and stacking, the second to provide power to
the heap leach area and ADR plant, and the third to provide power for pumping river
(raw) water, camp site and other miscellaneous buildings in the area.
Depending on the load, the distribution voltage of 6KV will be utilized directly (operating
voltage for motors greater than 200 kW) or it will be further stepped down to a 400 VAC,
3-phase, 3-wire system for feeding motors below 200 kW. The 400 VAC will be further
stepped down to feed lighting loads at 400/230VAC and 120 VAC to facilitate
instrumentation requirements and general office equipment (receptacles, computers,
printers, etc.). Power distribution design will follow the federal, state and local standards.
The mine site will be provided with a grounding grid to which all building steel,
equipment, etc. will be connected for safety. This grounding grid will consist of a #4/0
AWG bare copper conductor buried below ground connecting all items previously
mentioned. All above ground connections except connections to building steel will be
mechanical type connections so that equipment can be removed or replaced easily. All
underground connections including those to building steel will be of the thermoweld
type. A test well will be provided for periodically measuring / testing the resistance of the
ground grid. Grounding design will follow the federal, state and local standards.
129

Lighting will be of the high intensity discharge type. High pressure sodium type light
fixtures will be utilized for exterior areas and high bay interior applications. Metal halide
lighting fixtures will be utilized indoors for low bay application and where color rendition
is a factor. Fluorescent lighting fixtures will be used in interior applications such as office
lighting, electrical rooms, etc. All areas will be equipped with emergency light fixtures
utilizing battery packs which will provide a minimum of 90 minutes of illumination.
Lighting levels will be designated by the Illumination Engineering Society (IES)
published guidelines.
A computer based data gathering system, Supervisory Control And Data Acquisition
System (SCADA), will be incorporated in the control and monitoring of all process
operations. The SCADA system will use remote termination devices to channel
appropriate control and monitoring signals from field locations back to the central
processing unit (CPU) computer where an operator can physically operate equipment
from his computer work station. The SCADA system will be based on equipment types
preferred and designated by the Owner. The configuration of the SCADA will be based
on the latest industrial standards. A programmable logic controller (PLC) system will be
installed in respective areas, gathering information from the input and output signals
from instruments and motor control equipment. The SCADA will process and record all
communications with respective PLCs. An uninterruptable power supply (UPS) will
provide power to each PLC.
Standby diesel generators will be provided to handle emergency situations at the heap
leach pad area and ADR plant, respectively. These generators will be connected on the
secondary side of the distribution transformer in respective areas. A 4000 kW generating
station at the heap leach pad will provide power to select solution management pumps
and other equipment that may affect the process production line should they stop
operating. A 1000 kW, 480V rated generator at the ADR plant will provide power to
agitators, sump pumps and other equipment that may affect the process production line
should they stop operating. A 225 kW generator by the water treatment plant and one
more 225 kW unit by the crushing plant for emergency situations.
18.2 Site Development
The Project will require development at the following major locations:
The mining areas
The mine surface facilities, including the mine administration building, truck shop,
mine workshops, refuelling area, mine control areas and explosives yard
The crushing plant area
The ADR plant, leach pad and storage ponds
Waste dump and water treatment plant
Road and site access
Power line tie into the local utility
Raw water sourcing and distribution
130

The ESIA team provided input into the site selection and design decisions for all major
infrastructure to ensure that environmental and social considerations inform the mine
design process.
The following describes the engineering site preparation requirements at each location.
The proposed overall general arrangement layout drawing is shown in Figure 18.2.
131

Figure 18.2
Proposed Overall Site General Arrangement Layout
132

Mine Surface Facilities

The mine service area will be supplied with power by an overhead power line from the
plant. The mine administration and warehouse will be connected to the main PABX at
the administration building. An optical fibre cable will connect mine service area
computers to the main server. Potable water will be supplied from the water treatment
facility at the plant.
The mine operations services area will include the following facilities:
Mine Administration Office
Cleaning
Mine Cafeteria
Heavy vehicle workshop / store and washdown bay
Light vehicle workshop
Heavy vehicle fuelling station
Light vehicle fuel station
Fuel storage
Magazine
18.2.1
Crushing Plant
The ROM pad and crushing plant will be located to the North of the main open pit.
Sub-surface conditions will be further defined with additional geotechnical testing for
building foundations and will be supervised by Golder. This drilling is in addition to the
extensive geotechnical work already undertaken and is scheduled to be completed by
the end of the 2012 drilling season.
The crushing plant site will be cleared and grubbed to remove organic material,
contoured for drainage and then capped with laterite to allow heavy vehicle traffic during
construction. There is extensive laterite available in the area.
18.2.2
Leach Pad and Collection Ponds
The leach pad and ponds are described in the heap leach facility write-up in Section
17.2.
18.2.3
Waste Dump Facility
The waste dump facility (WDF) at Site 13 consists of the waste dump (WD), and an
influent equalization basin (IEB), wastewater treatment plant (WWTP), and evaporation
pond (EP), located downgradient of the WD and utilized for the collection and treatment
of mine-influenced water draining from the WD. Diversion channels will be constructed
upgradient of the WDF to divert storm and snowmelt runoff from upstream catchments
away from the WD, IEB, WWTP and EP.
133

18.2.3.1
Waste Dump
The WD will be constructed in three phases. The WD phase areas will be approximately
465,500 m2, 506,800 m2 and 360,100 m2 for Phases 1, 2 and 3, respectively, for a total
WD area of 1,332,400 m2. Waste material will be deposited on the WD in nominal 8
meter thick lifts at the natural angle-of-repose of approximately 1.4H:1V. Benches with a
nominal width of 16.8 m will be constructed between lifts to provide an overall exterior
waste pile slope of 3.5H:1V, to be compatible with closure requirements.
The Phase 1 waste pile will be deposited on the Phase 1 WD in the southern portion of
the Site 13 valley in 12 horizontal lifts to a top surface elevation of 2430 m. The Phase 1
waste pile is approximately 20 Mt and will be deposited during the initial two years of
operations. The Phase 2 waste pile will be deposited north of the Phase 1 pile to fill the
valley to elevation 2430 m. The Phase 2 waste pile is approximately 54 Mt to be
deposited in three years. The Phase 3 waste pile will consist of depositing nine
additional horizontal lifts above the Phases 1 and 2 waste pile to a top surface elevation
of 2502 m. The Phase 3 waste pile is approximately 84 Mt to be deposited in six years,
and will bring the total Phases 1, 2 and 3 waste pile capacity to approximately 158 Mt.
This capacity may be reduced slightly when considering access ramps within the waste
piles and operational constraints. The WD may be expanded higher up the hillside to the
southwest to accommodate additional waste material.
The WD will be lined with a 0.45 meter thick compacted low-permeability soil liner. An
underdrain system will be constructed within the WD footprint beneath the soil liner to
drain groundwater/subsurface seepage to the IEB and prevent the seepage from
entering the waste pile above the WD base liner. The WD will have 1.5 meter high
perimeter berms to prevent rainfall and snowmelt water within the WD that comes in
contact with the waste pile (contact water) from overflowing the WD. This water will be
collected by an overdrain system constructed above the WD base liner and routed to the
IEB.
18.2.3.2
Influent Equalization Basin
The IEB was sized in accordance with the project design criteria to store 24 hours of the
WD maximum estimated underdrain flow plus overdrain flow from the 100-yr/24-hr storm
event (snowmelt and precipitation), and to provide flow control to the WWTP. The IEB
storage capacity is approximately 739,400 m3 to the 0.6-m freeboard depth. The IEB will
be constructed during the Phase 1 WD construction by building an earthen dam across
the narrow valley downgradient of the WD. The dam crest elevation will be
approximately 5 m lower than the WD downgradient toe elevation.
Groundwater/subsurface seepage flow from the WD underdrains and rainfall/snowmelt
contact water from the WD overdrains will be routed to the IEB. The collected water will
be pumped from the IEB where it will be tested for compliance with discharge criteria,
and if needed, routed to the WWTP for treatment.
The IEB will have a composite liner system consisting of 2-millimeter (80-mil) thick
single-side textured HDPE geomembrane with texturing at top for traction, underlain by
0.3-meter thick compacted low-permeability soil liner. An underdrain system will also be
constructed within the IEB footprint beneath the liner to drain groundwater/subsurface
134

seepage to a collection sump located downgradient of the IEB. Water collected in the
sump will be tested for quality and released if non-impacted, or pumped to the IEB if the
water quality criteria are exceeded.
18.2.3.3
Wastewater Treatment Plant
The WWTP will receive water from the IEB. Treatment processes have been developed
based on the projected water quality characterization of the combined flows from
underdrains and overdrains. The IEB and WWTP capacities have been designed to
accommodate high flows associated with snowmelt, with operation of the WWTP at a
constant rate for about eight months per year. Final treated effluent water quality targets
are to be determined. The WWTP effluent is projected to comply with Armenian
maximum allowable concentration (MAC) Category II standards. Category III standards
(more lenient) have been considered, but the conceptual design and cost estimation for
the WWTP is conservatively based on the more stringent Category II effluent targets.
The design flow rate for the WWTP is 182 m3/hr. The WWTP will operate 24 hours per
day, seven days per week for eight months per year (roughly April through November).
High flows in spring will accumulate in the IEB and will be gradually worked off through
the drier summer months. The final unit operation in the wastewater treatment process
is a spray-enhanced solar evaporation pond. Use of the evaporation pond limits the
operational season for water treatment. The IEB, WWTP and EP are conceptually sized
with capacity to treat twelve months of accumulated flow in the 8-month operating
season.
The contaminants of potential concern (COPCs) are based on comparison of the
projected influent water quality characterization and the Category II discharge
standards. COPCs include metals, sulfate, and suspended solids. Treatment operations
for these COPCs include:
Chemical precipitation (lime treatment) for metals removal.
Microfiltration for suspended solids removal.
Reverse osmosis for sulfate removal.
All ancillary equipment (chemical reagent feeds) have been included in conceptual
design, as well as secondary waste handling equipment (dewatering chemical
precipitation sludge).
Treated water will be discharged to the Vorotan River. Secondary waste sludge from
chemical precipitation will be disposed on site. Solids accumulated in the evaporation
pond may be removed for disposal or disposed in-place at the end of the WWTP life.
The WWTP is expected to operate in post-closure mode for some period of time,
currently estimated at 10 years. Further study of post-closure flows from the overdrains
and underdrains is needed to more accurately predict post-closure water treatment
requirements and duration of operations.
135

18.2.3.4
Evaporation Pond
Reverse osmosis brine from the WWTP will drain by gravity to the EP for evaporation.
The EP was sized to meet the brine storage requirements. The EP storage capacity is
approximately 61,420 m3 to bottom of the 0.6-m dry freeboard depth. The EP will be
constructed during the Phase 1 WD construction by excavating into the sloping terrain
on the uphill side and filling earthen embankments on the downhill side. The pond crest
elevation will be 20 m higher than the IEB crest level.
The EP will have a composite liner system consisting of 2-millimeter (80-mil) single-side
textured HDPE geomembrane with texturing at top for traction, underlain by 0.3-meter
minimum thickness compacted low-permeability soil liner. An ultrasonic system will be
provided for the EP to prevent birds from accessing the fluid in the pond.
the IEB, WWTP and EP for public safety and to deter unauthorized access into the
waste water treatment area. The fence will also prevent wildlife from reaching the fluid in
the ponds.
18.2.4
Accommodations
The final strategy for accommodating all construction personnel, employees and security
personnel during the construction period will be defined as part of the detail engineering
effort. The basis of the cost estimate included an allowance to house 200 Lydian
employees on-site and the remaining employees in nearby towns. Employees who live
outside the area would be placed in hotels while local employees could live in existing
accommodations. The contractor will provide housing for all construction personal and
this cost was included in the construction labor rate.
Prior to detail engineering of the on-site housing facility potential vacant or run down
housing opportunities will be investigated in Jermuk.
18.2.5
Roads & Site Access
For supplies, material and equipment can be shipped to the ports of Poti or Batumi,
Georgia then trucked through Georgia and Armenia to the Amulsar project site.
Airfreight through the Zvartnots International Airport in Yerevan is also possible.
There is a sealed road from Yerevan to the Iranian border passing to the south of the
project area and a sealed spur road to the town on Jermuk. The current project access
is gained via a gravel/dirt road from the Jermuk road. A further gravel/dirt road runs
along the Vorotan river valley to the town on Gorayk. The sealed roads to the site turnoff are adequate for all Project transport requirements. The existing gravel/dirt site
access road to the mine site will need to be widened over its entire length of 20 km as
noted below, and maintained for all weather operation, providing the main means of
access to the mine site and associated infrastructure The gravel/dirt road from Gorayk
can also be used to access the Amulsar site and will also require upgrading.
136

The roads required for the Project are:
Plant access road
Village access road
Leach pad & ponds access roads
Waste dump and WTP area roads
Mine haul roads
Borefield access road
18.2.6
NonProcess Buildings
The following non process buildings have been included in the capital cost estimate:
Administration and engineering building
Plant Warehouse / Workshops
Maintenance Shop
Mine Truck shop
Lube Storage
General Storage
Truck Wash Station
Guard Gate
Gas Pump Building
Explosive magazine
Camp including the following;

-
Dining Area
Sleeping Quarters
General Store
Laundry
Infirmary
Sewage Treatment plant
Laboratory services for exploration, the mine and process facilities will be supplied by
ALS Minerals (ALS). ALS has expressed interest in constructing a laboratory either on
site or in close proximity to serve not only the mine but other regional requirements.
Based on an analytical requirement volume and determinations estimate, ALS will
supply and staff the laboratory accordingly. Lydian will make payments monthly to ALS
for the analytical support. For the FS, this monthly cost is estimated as the staffing cost
of a Chief Chemist, two additional chemists, four assayers and four sample preparation
technicians plus US$10 per sample and 40,000 samples per year.
137

18.3 Water Source

The water source for the project will come from the Vorotan River with potable water
delivered as required. A sitewide water balance was prepared as part of the Integrated
Water Studies by Golder and adequate supply is available for production, makeup
water, and general use in supplementing mine infrastructure needs for additional
requirements such as dust control.
18.3.1
Potable Water Supply
Potable water will be used for drinking water, cleaning, change rooms, laboratory water
and safety showers.
Potable water is not required for the process requirements.
The design potable water demand is 115 m3/day based on 300 l/person per day in the
staff quarters and 40 l/day for staff not resident in the quarters. A further 70 m3/d will be
required within the plant (ablutions, laboratory, safety showers, etc). Accordingly, a
supply of 370 m3/d has been allowed and will be purchased from local community
supplies.
18.3.2
Raw Water Distribution System
Based on the water balance study and hydrological assessment, there is adequate raw
water available from the Vorotan River. An abstraction permit will be required in
accordance with Armenian legislation and at this time it appears there is no reason to
suspect that this will not be granted. KDE has included a raw water storage and
distribution system for the project that pumps to the following areas;
ADR Plant Area
Camp Area
Water Treatment Plant
Truck shop area
Crusher Area
Mine Area
In order to minimise the number of services it is proposed to provide firewater via the
raw water system. A diesel driven pump will start automatically on loss of raw water
pressure to provide a secure fire service. A minimum volume of water will be held in the
raw water pond at all times.
For exploration drilling purposes Geoteam currently holds a water use permit from a
small pond on the western side of the pit.
Raw water required for the operation of the plant will be sourced from the Vorotan River.
It is assumed that the well for raw water will be located on the shore of the river
somewhere downstream of the hydro-electric power plant. The tentative location for the
extraction well is shown on site plan. A perforated pipe with an installed pump (i.e,
138

sump) will be buried adjacent to the river and surrounded with drainage gravel to allow
water to flow into the sump and be pumped through the delivery piping system. A local
contractor will be utilized to design and build the extraction well to assure this meets
local codes.
The exact location of the extraction well will be determined during the detailed
engineering phase of the project and after getting necessary environment permits.
Geoteam is completing the permitting process required to source water from the river for
this project.
The water is pumped at the required rate to an adjacent tank located out of the flood
plain. From the storage tank, the water will then be pumped to ADR and crushing plant
through 4 and 3 km high pressure buried pipeline with a booster pump station if required
The electrical power of 6 kV will be brought to site by a overhead power line spurred
from ADR plant which then will be stepped down to 400V for use.
18.3.3
Process Water Supply
Process water will be prepared at the process plant and will be recycled to the extent
possible. Makeup water will be kept to a minimum. Process water quality will be
monitored and, provided it is acceptable, will be used in the following areas:
Leach pond
Screen sprays
Carbon transfer
Process plant washdown
18.3.4
Sewage Waste Water Treatment
Sewage waste water treatment will be required at the man camp, ADR process plant,
crushing plant, truck shop and contact water treatment plant area. An allowance was
included with the building costs to include a septic system for each of these facilities.
In the event that geotechnical testing indicates that a septic system is not appropriate
due to ground conditions then a pre-engineered sewage waste water treatment system
would be placed at the man camp and sewage from the other locations would be hauled
to this facility for treatment. Regardless of the type of sewage treatment facility required
this facility will be designed to meet local regulatory requirements.
18.4 Waste Disposal
Two landfill disposal sites will be constructed in accordance with the EU Landfill
Directive for non-hazardous and hazardous waste. The sites are small and would be
adjacent to each other within the Rock Allocation Area.
Engineering requirements for a hazardous waste landfill/cell are a basal and side wall
liner with a permeability and thickness equivalent to 1 x 10-9 m/sec at 5m thick.
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Engineering requirements for a non-hazardous waste landfill/cell are a basal and side
wall liner with a permeability and thickness equivalent to 1 x 10-9 m/sec at 1m thick.
The Directive states that where the geological barrier does not naturally meet the above
conditions, it can be completed artificially, but must be no less than 0.5m thick (again on
the base and side walls) and be of equivalent standard (i.e. for a hazardous waste
landfill/cell it would have to be equivalent to 1 x 10-9 m/sec at 5m and for a
nonhazardous landfill/cell equivalent to 1 x 10-9 m/sec at 1m).
Non-hazardous waste generation is estimated to be less than 5,000 t. Hazardous waste
generation is estimated to be considerably less. The landfills would be constructed with
leachate management and treatment systems.
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19
MARKET STUDIES AND CONTRACTS
19.1 Marketing Studies
The product from the Amulsar Project will be dor bars containing a mixture of gold and
silver and other impurities. The precious metal content of the bars is estimated to be
between 90 and 99 percent gold plus silver. Dor bars produced at the mine will be
weighed and assay samples collected. These high grade samples will be analyzed both
on site and at an independent laboratory. The weight of the bar combined with the assay
values allows the calculation of the ounces of gold plus silver contained in each bar and
thus the overall value. Typically gold and silver dor bullion is sold through commercial
banks and metal dealers. Sales prices are obtained on the World Spot or London fixes
and are easily transacted.
The dor bars will be shipped by a secure carrier to a precious metal refinery, probably
located in Europe or Asia. Upon arrival at the refinery, the bars are weighed and
samples are taken to determine the precious metal content. The refiner will schedule
periodic processing of the Amulsar dor in separate crucibles. The products from the
refinery are separate refined gold and silver ingots known as good delivery bars. The
option exists to take physical metal or to employ a trading account to monetize the
bullion.
Once the mine has established an operating history at the refinery, payment of typically
90 percent of the estimated shipment value will be forwarded at the company's account
at the commercial bank that manages the gold and silver sales for the company as the
bullion is transferred from the company to the secure carrier. Usually the company CFO
manages the account as a source of immediate funds or, alternately, gold and silver can
be kept in inventory. Typical shipping and refining costs are approximately US$ 5 per
ounce of gold refined.
19.2 Contracts
As of this writing, the company has not entered into contractual agreements with civil
contractors or engineering, procurement and construction management contractors.
However, potential contractors have been interviewed and shortlisted.
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20
ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY

IMPACT
Wardell Armstrong International (WAI) was instructed by Lydian International Limited
(Lydian) to undertake an Environmental and Social Impact Assessment (ESIA) of the
Amulsar Gold Project in the Republic of Armenia (RoA). This reporting process involved
the following key steps:
Preparation of a Scoping Study by WAI - to set out the main project parameters,
outline national legislative and international best practice requirements and identify
any potential environmental and social impacts;
Baseline data collection - designed in accordance with the above, with data
collection principally undertaken by in-country specialists with input from WAI (in
relation to the social baseline conditions), Golder (contributing to seismicity and
water resources).
Impact prediction, assessment and mitigation, with regular interaction with the
Amulsar Feasibility Study (FS) team; culminating in the:
-
Preparation of the ESIA document - disclosure draft due for submission in

Q3 2012;
Preparation of Framework Environmental and Social Management Plans,

Stakeholder and Community
Engagement Plan and Framework Mine Closure Plan; these framework

management plans set out principles and outline management strategies for
Lydian, and form the basis of an Environmental and Social Management
System to be developed and adopted by Lydian for the Amulsar gold
Project.
In order to produce an ESIA to satisfy international requirements, WAIs remit has been
to review and incorporate data and reports collected and prepared by Geoteam, Golder
and other FS contributors, together with various appointed Armenian and international
specialists. Significant specialist contribution has been provided by Dr. Clive Hallett (acid
rock drainage), Eddie Jewell Associates (noise data modelling), SKM Colin Buchanan
(traffic impact assessment), Environmental Resources Management Group
(archaeology and cultural heritage), Dr. Joanna Treweek (biodiversity), Shape
Consulting Limited (community health) and Radman Associates (Radiation Protection
Advisors). Therefore, in addition to the above listed reports, various supporting
deliverables and activities have also been undertaken throughout the ESIA process.
These include formal and informal stakeholder engagement and the iterative integration
of environmental and social considerations within Project design and development.
Information provided by third parties has been referenced as appropriate and has been
detailed in full in the ESIA.
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Where relevant, key environmental and social aspects have been included and identified
throughout this FS. The focal elements of the ESIA process are summarized in this
Section and the full ESIA is presented as a separate document. Aspects covered in the
ESIA, such as geology, geotechnics, geochemistry and seismicity are fully detailed in
the ESIA and geochemistry and seismicity have been further discussed in Section 24.
For completeness this report should be read in conjunction with the full version of the
ESIA (WAI Report No. EO-52-0088-2); and the Scoping Study (WAI Report No. EO-520088-1, February 2011).
It should be noted that, whilst exercising all reasonable diligence in checking and
confirming it, WAI has relied upon the data presented by others in undertaking the ESIA
and cannot comment on the adequacy of actual field sampling undertaken, laboratory
procedures or any interpretation of data by others. Some of the documents reviewed by
WAI have been translated from Armenian, necessitating WAI to interpret and use the
information with caution.
Erato
The ESIA has been undertaken for the extraction and processing of ore from Tigranes
and Artavasdes up to and including Year 12 of the Project. Whilst resource drilling has
been undertaken at Erato, currently the resource is indicated only and has not been
included within the ESIA.
In terms of the FS, the economic contribution and resource allocations associated with
the commencement of mining of Erato in Year 7 of the Project has been identified, in
that provision has been made for the waste from Erato to be accommodated in the
current WD, with potential for progressive backfilling of Tigranes and Artavasdes open
pit. Similarly, Erato ore will form the late stages of the proposed development of HLF.
However, the environmental and social studies required with respect to mining
operations at Erato will require full assessment in an ESIA addendum to be completed
at a later stage of the Project. Additional studies will necessitate the consideration of
baseline data, including biodiversity field studies, hydrogeological field data and
modeling, soils and land capability assessments, together with further ARD
characterization and extended visual impact analysis. Stakeholder engagement would
also take place to inform and explain the nature of these studies.
20.1 Location, Environmental and Social Setting
The Project is located in central southern Armenia and straddles two administrative
provinces, or Marzesr, namely Vayots-Dzor and Syunik. The Project area is largely
open in nature with no areas of woodland and is characterised by a temperate climate of
long cold winters and short relatively cool summers.
The landscape ranges in altitude from approximately 1500masl to a ridge of 2988masl,
where the gold deposits are located (Amulsar Mountain). Elevated areas are rocky
rounded mountain ridges with steep sided slopes, leading to large undulating plateaus
and river valleys, some of which are locally incised by gorges of the Rivers Arpa and
Vorotan. The environment is relatively pristine, being unaffected by any industry in the
immediate area, and is characterised by grassed foothill meadows, prairies and subalpine to alpine landscapes as the elevation increases. The River Vorotan and
143

associated catchment is located within the licence area. The Vorotan feeds the
Spandaryan Reservoir, located approximately 2.5km to the south of the proposed heap
leach facility (HLF).
There are a number of ephemeral and permanent surface water features in the foothills
of the Project area, supporting a range of natural and semi-natural habitat and fauna.
The land use within the Project area includes; seasonal grazing pasture (moderately
high elevations within the alpine meadow grasslands), hay cropping and winter grazing
(lower elevations, supporting sub alpine meadow grasslands). Local residents and
visitors make use of the Vorotan, Arpa and Darb river systems for recreational fishing. A
small proportion of local residents also hunt for recreation within the Project area.
Three rural communities with a combined population of approximately 2000 people lie
within the Project vicinity. These include the communities of Saravan (consisting of the
villages of Saravan, Saralanj and Ughedzor, which is only inhabited during the summer
months), Gorayk and Gndevaz. The communities of Saravan and Gndevaz are in
Vayots Dzor Marz, some 5 - 9 km west and southwest of the deposit. Gorayk village is
located in Syunik Marz, and lies approximately 5km southeast of the deposit. The main
livelihood is subsistence agriculture.
The closest city is Jermuk (which includes the associated village of Kechut) which is
located approximately 14 km to the north-west of the proposed open pit. Jermuk and
Kechut together have approximately 6000 residents. Jermuk is endowed with natural hot
springs and several renowned health resorts and spas. Jermuk hosts an established
mineral water plant and emerging tourist industries.
20.2 ESIA and Permitting
20.2.1
Scope of the ESIA
The ESIA fully describes the policy, legal and administrative framework under which the
Project will be developed and under which the assessment was carried out, as well as a
description of the Project covering geographical, ecological, social and temporal
aspects. It includes baseline data describing the physical, biological, cultural and
historical conditions and the environmental and social impacts associated with project
implementation. Mitigation measures needed to minimize impacts to an acceptable level
are presented, as well as an analysis of feasible alternatives. Key framework
management plans covering environmental, health and safety, social management and
community development have been formulated and presented, together with an
Environmental and Social Action Plan for the delivery of the Project from construction to
operation and eventual closure.
The integration of the ESIA team with the specialists engaged in the FS has allowed
many potential impacts to be prevented or designed out at early stages of the study.
Similarly, the integration process provides the means for appropriate and practical
mitigation measures to be included in the designs.
While the submission of the international ESIA is not an Armenian regulatory
requirement (the Armenian EIAs (ShMAGs) fulfill this role), the ESIA will be made
available to the Ministry of Nature Protection and other Government departments. The
144

ESIA will also be circulated to relevant financial institutions and made available publicly
in both Armenian and English language versions. Public input is welcomed and will be
considered in the decision-making process of the relevant financial institutions. In this
regard the findings of this study will be used in the compilation of the final ShMAG
documentation, based on the detailed design of the project, and submitted for approval
by the government authorities.
The ESIA is prepared in line with the requirements of an international standard ESIA,
specifically the International Finance Corporation Performance Standards (IFCPSs) and
the European Bank of Reconstruction and Developments Performance Requirements
(EBRD-PRs). The objective is that the Project will be acceptable to IFC and EBRD, and
other financial institutions that are signatories to the Equator Principles (EPFIs). In
January 2012 the IFC introduced updated Performance Standards, and it is these 2012
PSs that have been applied in the compilation of the ESIA.
The Equator Principles apply the IFCs environmental and social screening criteria, to
reflect the magnitude of impacts understood as a result of assessment:
Category A - Projects with potential significant adverse social or environmental impacts
that are diverse, irreversible or unprecedented and may affect an area broader than the
site facilities subject to physical works;
Category B - Projects with potential limited adverse social or environmental impacts that
are few in number, generally site-specific, largely reversible and readily addressed
through mitigation measures; and
Category C - Projects with minimal or no social or environmental impacts.
The IFC and EBRD have been investors in Lydian International since the company
began early exploration activities on the Project. Accordingly the ESIA examines the
potential environmental measures needed to prevent, negate, minimize, mitigate or
compensate for adverse effects, and to improve environmental performance, whilst
seeking to optimize the positive benefits that the Project may accrue. On the grounds of
the Project being classifiable as Category A, the ESIA is required to integrate
environmental and social considerations into Project design and to conduct consultation
and disclosure accordingly.
Although the Amulsar Project has the potential to incur environmental and social
impacts, the ESIA and this Section of the FS demonstrates that these are manageable
to avoid, prevent or to reduce to acceptable levels, in accordance with Armenian and
international standards.
20.2.2
Republic of Armenia Environmental Impact Assessment
The requirements under the RoA Environmental Impact Assessment procedure

(ShMAG) are slightly different in terms of process, method and presentation, to those
required of an ESIA by international funding agencies. Therefore two processes were
undertaken, following parallel paths and based on common baseline data and project
parameters.
145

WAI has provided input into the conceptual ShMAG reports for the crushing, conveying
and heap leach facility (HLF). Under Armenian law the mining operation and the
HLF/ADR operations are permitted separately and thus require separate submissions.
The ShMAG reports have been prepared by in-country experts Eco Audit LLC, based
on baseline data principally provided by Geoteam.
20.2.3
Permits and Licensing
Subsequent to the exploration phase, and prior to development of the mine, several
permits and licenses will be required. These include those outlined in Table 20.1 below.
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Table 20.1
Republic of Armenia Permits Required for Development of Amulsar Mine
License/Permit Title
Application/Provision
Status Comment
Mining Licence
To permit extraction of ore
Granted. Valid until 2034.
Technical Safety
Approve that the design follows all Armenian safety regulations.
Granted. Valid until the life of the ML, unless there are changes in the design of the Open Pit operations.
Rock Allocation Area
Change in land use from agriculture to industrial required to accommodate all

mining infrastructure and get construction permit
Granted for open pit, waste rock dumps & crushing. Valid until 2034.
Once the Concession Agreement is signed with the Government, the new RAA will be granted which will include all
the HLF and parts of general infrastructure. As part of RAA the land status change will be done automatically after
RAA is granted with defined limits.
Water abstraction & discharge licence
To permit the use and the discharge of water.
No application has been made as yet. The company has a water extraction permit for exploration activities.
Air emission permit
To permit the emissions to the Air.
Not yet applied for. The company has air emission permit for exploration activities.
Explosives permit (store, transport, use
To permit the use and the storage of the explosives material.
The Company will contract a company that will have both blasting and storage permits. As such, Geoteam will not need to
get these permits.
ICMC cyanide supplier compliance
Company is committed to become ICMI compliant, thus the transporter

and the producer should be compliant as well.
Construction and Architecture permits
To get the approval that all the design corresponds to Armenian Standard
Not yet applied for.
and Norms.
Gas and power use designs and

construction expertise and permits
To permit the gas and power use.
Waste Passports
To give the class of hazard to the different waste types and permit the
location of the waste and its disposal.
d The Company will purchase CN from a producer that is ICMC compliant, or working on becoming compliant, taking
professional advice from a ICMI Lead Auditor to ensure that viable options are in line with the ICMC..
147

20.3 Significant Project Consumption and Releases

The ESIA details the effects and influences of the Project, which are significant for the
environmental and social impacts (both positive and negative). The most significant are
summarized here and detailed in the ESIA:
Land Take - the Rock Allocation Area (the area within which mining activities are
authorized) will be approximately 4,700 hectares (ha). While Lydian intends to maintain
seasonal nomadic grazing access to the majority of land under its control, and grazing
does not occur on all of the 4,700 hectares due to altitude and topography restrictions,
at least a small proportion of land currently in use for grazing is likely to be sterilized,
either permanently or temporarily.
Permanent sterilization would occur at the:
Waste rock dump and
HLF
Temporary sterilization will result from the development of mine infrastructure which will
be in place for the period of mining and includes the following elements:
Waste rock stockpile
Waste water treatment plant & basins
Conveyor
Utilities
Mine camp
HLF ponds
Truck shop
Exploration camp
Maintenance shop & offices
Explosives magazine; and
Road to crusher
Certain haul routes and access roads will be retained as a part of the mine reclamation
plan for longer term maintenance and aftercare management. The ESIA provides details
of the footprint for individual areas within the mine site. In summary (see Figure 20.1),
during operations, it is estimated that the area of direct disturbance from the
development of the mine and associated infrastructure will be in the order of 510
hectares. However, because elements of the infrastructure such as haul roads, the
conveyor and site access roads will also reduce access for grazing and other
recreational activities, it is estimated that a further area of approximately 260 hectares
will be indirectly affected as consequence of fencing and bunding. In addition, there will
be approximately 270 hectares where access to grazing land will be restricted by
controlled passage of animals via crossing points on mine haul roads.
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Figure 20.1
Footprint of Mine Development (Throughout the Operational Life)
149

Labor and Services - Approximately 600 people will be directly employed during
construction, 550 during various phases of the operation and 20 for closure care and
maintenance. In addition, where services are outsourced, local contractors will be
offered the opportunity to bid for tenders.
Energy and Diesel Consumption - Total electrical load is estimated to be 22.6MW.
Total diesel consumption will be 9 million litres /year (based on consumption estimated
in year 2 of the Project).
Air Emissions - Dust is defined as particulates from 1 to 75 micrometers in size,
however, 95 percent of dust will normally be over 30 micrometers in size and will be
subject to aerodynamic and gravitational effects, which determine the distance they
travel before settling out of suspension. Main Project dust sources will be open pit
excavations, crushing plant/overland conveyor, ore stacking and associated haulage
and deposition activities. The latter is chiefly haulage of waste rock from the open pit to
the waste rock dumps and ore from the pit to the run-of-mine (ROM) ore stockpile and
crushing facility.
Greenhouse Gas Emissions - The calculated annual emissions of CO2 and other
greenhouse gases are predicted to be 91,900 Total CO2e/yr (tonnes), predominantly
from grid electricity consumption for crushing and grinding (c.67,800 tonnes per annum)
and diesel consumption (c. 24100 tonnes per annum). Greenhouse gas generation has
been based on published data, however it should be noted that there is no coal power
generation in Armenia, which relies on a combination of nuclear, hydroelectric and gas.
Water Uses and Discharges - Total water requirements for processing (including HLF,
crusher and dust suppression water) will average 1.9 Mm3 per year during Phase 1,
rising to 3.2 Mm3 per year during Phase 2. Average requirements are broken down on
Table 20.2. This water will be sourced from the Vorotan River. Water for domestic and
potable needs, requiring a supply of 136,000m3/yr abstracted from a combination of
local spring supplies and Vorotan River, which may be shared with the new Gorayk
water supply. Water sourcing and requirements are further detailed in the Water
Balance prepared as part of the Integrated Water Studies by Golder.
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Table 20.2
Average Water Requirements
Water Requirement
m3/hour
m3/day
Potable water at camp
15.4
370
2 x hoppers at crusher site
45.8
1100
General dust suppression
19.7
22 (4 months/year)
272 (4 months/year)
472 (4 months/year)
Process water for leaching Phase 1
147
3,528
Vorotan River
Process water for leaching Phase 2
147
3,528
Vorotan River
374.9
8,998
SUM (assumes summer

season during Phase 2)
Supply Source
Local springs (share with new Gorayk

supply) or Vorotan River
Dust suppression pond/Influent
equalization basin (IEB)
Dust suppression pond/IEB
Water discharge from the site will be from the WWTP, which treats the water to an
acceptable standard, and is designed to release water to the Vorotan catchment at a
maximum rate of 182m3/hour.
The HLF will be a closed system, and no discharge will occur from this area. Foul water
from the mine camp will be treated to a high standard, and released to the Vorotan
catchment.
Principal Wastes - The mine will generate diverse waste streams throughout all
development phases, including solid construction wastes, domestic and technical
(processing and assaying wastes) wastes, domestic effluents and runoff waters. Liquid
waste streams (effluents and residual liquids) will not be released to the environment
unless they conform to Armenian regulatory requirements and internationally recognised
concentrations. The management of wastes will be undertaken in line with the various
framework management plans, accompanying the ESIA.
Waste Rock - The geochemical characterisation study, reported in full in the ESIA,
identifies that the majority of Amulsar waste rock lithologies have some Acid Forming
and Metal Leaching potential. All waste rock will be placed on the waste rock dump sited
to the north of the mine (see Figure 20.1) and contact waters will be treated in a WWTP.
Due to known properties of the waste rock, the WWTP has been designed to capture,
divert and neutralise all associated contact waters to meet the regulatory standards.
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Detailed design and operation will be informed by an Acid Rock Drainage Management
Plan.
Water Treatment Sludge - These comprise the residues from the treatment of surface
water run-off and leachates from the waste rock dump. The sediments are removed as a
sludge containing metal hydroxides. This volume of sludge is insignificant, with annual
productions in the order of 69t/year (equivalent to 49m3 /year). The sludge will be reincorporated in the Waste Dump.
Ore - Ore will be stacked on the HLF which will be operated as a closed system with
adequate environmental protection (as described in Table 20.5). ARD test work has
been undertaken on ore material showing that it is also acid forming and metal leaching
and plans have been designed to manage this acid generation. Any ROM stockpile will
be of very short residence time, small-scale, lined, and include runoff collection/diversion
to a storage facility in order that contact waters are treated prior to discharge.
Hazardous Materials & Reagents - These will include sodium cyanide (NaCN), lime,
caustic soda (NaOH) and hydrochloric acid (HCl), together with diesel oil. Appropriate
signage and MSDS will be used. Chemical-specific first aid training will be provided to
staff. The use, transport, storage and handling of cyanide at the site will be controlled by
documented management procedures and formal management plans and procedures in
accordance with the International Cyanide Management Code (ICMC) and the ESIA
framework Cyanide Management Plan. Measures to avoid, respond to and treat spills
and emergency situations are outlined in the ESIA framework Spill Prevention and
Emergency Response Plan.
20.4 Environmental Context
20.4.1
Geology and Soils
The Amulsar high sulfide gold deposit is hosted in an Upper Eocene to Lower Oligocene
calc-alkaline magmatic-arc system. Detailed regional and site-specific geology, together
with the current block model, has been summarized in preceding chapters and is
detailed within the ESIA.
Soil types, broad characteristics and indicative pH have been identified in the general
Project area and over 2,000 exploration soil samples have been tested for heavy metal
content. Targeted samples have also been tested for extended environmental suites
including potentially toxic heavy metals ions and cations, radiological parameters,
hydrocarbons, cyanide and microbiology. A geotechnical soil sampling regime within the
proposed footprints of major mine infrastructure has been undertaken. This data is
considered in detail in the ESIA with respect to the assessment of impacts on soil quality
and land use.
20.4.2
Radioactivity
It is understood that some residents in the Project vicinity are concerned about the
impact of radioactivity arising from the Project as radioactive dust or in the form of
radon. The main source of dust from proposed mining activities will be from disturbed
rock, and to a lesser extent, soil. Uranium (U) and Thorium (Th) concentrations from
152

over 2,000 samples of soil and 46,000 samples of rock (ore and waste) have been
provided by Geoteam from their extensive exploration programme undertaken across
the licence area.
The measured U and Th concentrations have been reviewed by Radman Associates
(Radman), a UK-based firm of accredited Radiation Protection Advisors and the
concentrations have been compared with typical reported levels of these elements in
Armenian soils (United Nations Scientific Committee on the Effects of Atomic Radiation,
UNSCEAR).
Household surveys for baseline radon levels were conducted in households in the
villages of Gorayk, Saravan, Saralanj and Gndevaz. The measurements were taken in
149 locations in December 2010 until March 2011.
20.4.3
Seismicity
Armenia is situated within the Caucasus region in the vicinity of the Alpine-Himalaya
seismic belt and at the juncture of the African, Arabian and Indian tectonic plates. It is a
global region of moderate to high historic earthquake activity. The Amulsar license is
located within a seismically active region of the Arabia-Eurasia plate boundary zone.
Detailed studies evaluating the regional seismic profile and seismic hazard class of the
Project area were completed by Golder and were included in their report titled
Earthquake Hazard Assessment and Seismic Parameters for the Amulsar Gold Project
(Golder, 2012b), summarized in Section 24.
The results of this study have been used to develop appropriate seismic design criteria
for major mine infrastructure in accordance with international and Armenian guidance
and building codes.
20.4.4
Water Resources
Groundwater Characteristics
The bedrock of the mountain and proposed open pit has been shown by hydraulic
testing to have a low permeability. Exploration has shown that the alteration of bedrock
to clay is extensive, and therefore the low permeabilities measured are likely to be
representative of the bulk geology of the open pit. The mountain-top topography of the
proposed open pit further reduces the groundwater inflow potential, since, unlike a flat or
valley setting, there are no adjacent water-bearing strata which would drain towards the
excavation; at least for the majority of the open pits life. A 2D groundwater model has
been generated for the open pit, and indicates a maximum groundwater inflow of
approximately 850 m3/day (9.8 L/sec).
Hydraulic testing at the WD has indicated that this is a groundwater discharge area, with
marginally higher groundwater inflows, but the aquifer here can still only be considered
of local importance here. The HLF area is situated within poorly-fractured basalts, and
also does not have significant groundwater potential. Neither the WD or HLF
construction will involve excavation into the saturated subsurface.
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Infiltration of precipitation is limited by the low permeability of the geology, leading to the
development of many low-flow, short-pathway local mountain springs at the open pit and
WD areas. Twelve springs have been identified within the WD and open pit areas, but it
is likely that the number of active springs varies according to season. Four of the
springs appear to support/be associated with an area of suspended marsh. Another
spring drains to the Benik Pond within the Darb catchment, west of the mountain. There
are reportedly more springs at the WD area and, as discussed below, Gorayk village.
Groundwater quality and flow (pathways and volumes), together with a calibrated
groundwater model, Conceptual Site Model and side-wide water balance are presented
in the ESIA.
Surface Water Characteristics
The Project licence area is bisected approximately north-south by a catchment divide,
with the Darb catchment (a subcatchment of the Arpa) to the west, and the Vorotan
catchment to the east. Virtually all Project activities will take place within the Vorotan
River catchment. River flows at both of these catchments have been significantly
altered by human intervention, including the following:
The Vorotan River has a tunnel at Spandaryan reservoir which diverts flow to
Kechut Reservoir (as part of measures to augment the flow at Lake Sevan). It is
understood that the flow entering Kechut Reservoir from the tunnel is
approximately 30 L/second. Since the water intake at Spandaryan has not been
opened since the tunnel was completed (in 2003) due to geotechnical difficulties,
the water flowing from the tunnel outlet is assumed to be groundwater.
Within the Darb catchment, to the north-west of Amulsar Mountain, is a small

pond, referred to as Benik Pond. The pond is approximately 1ha in area, and is
noteworthy for its naturally low pH and wetland biodiversity. It is interconnected
with local springs and surface water channels.
As identified previously, of the proposed main infrastructure associated with the Project,
only a portion of the open pit will be located within the Arpa Darb catchment. The heap
leach facility (HLF), waste dump (WD) and most roadways will be situated within the
Vorotan catchment. The surface water quality, Conceptual Site Model, runoff and
drainage characteristics of the Project area are outlined in detail in the ESIA.
Lake Sevan is the largest lake in Armenia, and in the Caucasus Region. Its basin makes
up one sixth of the total territory of Armenia. The lake water is of unusually high quality
for a lake of its size and position. During the Soviet period, flows were artificially
increased from the lake, leading to dramatic falls in lake surface area, and, among other
impacts, a decline in biodiversity and water quality. The lake remains an important
national resource for water supply, electricity, fishing and recreation. Measures to
restore the quality and size of the lake have been ongoing since the 1980s, and have
included flow-augmentation tunnel interconnections with the adjacent Arpa River basin
(which has an, as yet, uncommissioned flow-augmentation tunnel from the Vorotan
River basin).
154

Community Water Supplies

Drinking water for the village of Gorayk is supplied by three groundwater springs
originating in pasture land north east of the village. A new groundwater source is
envisaged to be developed by the village administration, as there are existing water
quality issues with the current supply. Drinking water is currently also used for irrigation.
Water for animals is sourced from groundwater filled storage tanks on the outskirts of
the village.
The Saravan village cluster is connected to the regional water mains for drinking water.
This water is shared with livestock. A multitude of groundwater springs are used for
irrigation water.
There is a reported pipeline and canal, fed by the headwaters of the River Vorotan
(upstream of the Project licence area), which supplies the village of Gndevaz with
irrigation water. This essentially transfers a portion of the flow from the Vorotan
catchment, to the Arpa catchment.
Drinking water for Gndevaz is supplied through a water intake pipe which was installed
in the downstream section of an adjacent spring. This is further outlined in the ESIA.
20.4.5
Biodiversity
Protected Areas and Areas of International Significance

The Project is located below the southern edge of the Caucasus Mixed Forests (CMF),
which is a Global 200 Ecoregion (238 Ecoregions have been identified by WWF as
priority areas for global conservation because of their important biodiversity). The
Caucasus Mixed Forest Ecoregion covers a wide area of 170,300 sq. km including
portions of Georgia, Russia, Azerbaijan as well as Armenia. It has been assigned a
status of critical/endangered' due to rapid land use changes, including widespread
deforestation. The Project site itself does not currently support forests of the type
prioritized within the Ecoregion.
The 2010 IUCN Red List of Threatened Species identifies around 50 species of globally
threatened animals in the Caucasus region as a whole. The whole of Armenia is within a
Birdlife International Endemic Bird Area, which covers an area of 170,000 km2 and
includes portions of Azerbaijan, Georgia, Iran, Russia and Turkey. The EBA is important
for several restricted-range species as well as breeding populations of raptors and
reflects the importance of the Caucasus as a center of bird endemism. Armenia provides
important habitat for many migratory bird species as part of an international flyway
between Africa and Europe, notably migratory raptors.
There are two Important Bird Areas (IBAs) in the vicinity of the Project:
Jermuk and Gorayk IBAs (see Figure 20.2). The IBAs constitute Key Biodiversity
Areas according to the definition in IFC Performance Standard 6 and have been
identified at national level using the globally standardized criteria which underpin the
KBA methodology. The Concession Area partially overlaps with Gorayk IBA and the
proposed Heap Leach Pad location (Site 6) is located partially within it. The IBA was
155

designated primarily for its breeding colony of lesser kestrel Falco naumanni and the
boundary represents the limits of an assumed hunting area around the breeding colony.
The status of lesser kestrel on the IUCN Red List has decreased from Vulnerable down
to Least Concern though it is still listed as Vulnerable on the Armenian Red List and the
only breeding colony in the country is at Gorayk, making it important in a national
context. Gorayk IBA also was identified because of a large number of other species
including Egyptian Vulture (Neophron percnopterus) which is listed as Endangered by
IUCN as well as several other raptor species and a large number of passerine and
wetland birds.
The closest National Park to the site is the Sevan National Park located approximately
44km to the north- north west of the Project. Three specially protected Natural Areas (2
are only proposed and one is active) are located in the vicinity of the Project as
illustrated in Figure 20.2, below: Jermuk (proposed) is 2.9km north west of the WD,
Herher Open Woodland (proposed) is 5.1km, west north west of the WD and Jermuk
Hydrological (operational) is 6.4km, north of the WD. WWF has put forward proposals to
develop an additional National Park encompassing these State Reserves and the
Jermuk Important Bird Area. These proposals are still under discussion.
There are several wetland habitats present within the Project area, generally within the
Vorotan River, its valleys and tributaries form an extensive network of surface drains
within the Project area. Habitats include the Benik pond, River Vorotan and tributaries,
suspended marsh and mires wet meadow; some of which form part of the functioning
ecosystem supporting the species identified within the IBA.
Protected Species
The Project affects four main vegetation types: alpine meadows, sub-alpine meadows,
mountain steppe and steppe grassland. There are also some wetlands. Mount Amulsar
is at an elevation of 2988m asl and has alpine vegetation. The mine pit and crushing
plant are located in areas above 2,100m with rocky outcrops, scree slopes and alpine
vegetation, including one plant which is included in the Armenian Red Data Book. Other
mine components are located on sub-alpine meadows and steppe grassland. Vegetation
has been analyzed using satellite imagery in the ESIA and further details of the density
of vegetation within each of the project components have been considered.
Desk top information indicates several IUCN listed and Armenian Red Book (1990)
species which have a high potential occurrence in the Project area. The Armenian Red
Book was updated in 2010. Field studies confirmed the presence of 9 plant species
which were listed in the 1990 Red Book but which were removed from the 2010 version.
In 2012, a Red Book (2010) plant species (potentilla porphyrantha) was identified in the
area of the open pit, and further baseline work is being conducted to clarify the
importance of the Amulsar population in a national context. The Project Area supports
seven species of bird that are listed in the Armenian Red Data Book and one which is
listed as an endangered species in the IUCN Red List. Further details of the
ornithological studies are presented in the ESIA.
Two species of dorcadion beetle (D. Bistriatum and D. Sevangense the latter of which
is listed in the Armenian Red Book), the IUCN Vulnerable Apollo butterfly (Parnassius
156

apollo) and rock viper (Montivpera raddei also included in the Armenian Red Book)
have been identified in the license area. No Red Listed fish have been observed.
There are some other globally endangered species which are known to have used the
area in the past. These include the Caucasus leopard (an endangered subspecies) and
the Bezoar goat. Brown bear (included in the Armenian Red Data Book) has been
recorded in the vicinity of the Vorotan River near the proposed HLP location. This is
regarded as a keystone species in the region, though its populations have declined
dramatically and it is now likely to be a rare visitor. Together with Bezoar Goat It is one
of the mammal species targeted for action in Armenia in the recently issued
Conservation Plan for the Caucasus Ecoregion (WWF 2012). Moufflon and Bezoar goat
are known to occur within the Jermuk area and NGOs have queried their presence in
the project site, however they have not been identified by field studies. The Caucasus
leopard is likely to be locally extinct. Evidence of the brown bear (Ursus arctos) has
been found in the Project area.
Ecosystem Services
In terms of ecosystem services, foothill grasses and other species provide seasonal
grazing for sheep and cows in foothill zones where homeopathic species are also known
to occur. A questionnaire has been undertaken to assess which areas are foraged by
local people for plants and the types used for household/dietary and medicinal purpose.
The results provide information on the relative abundance and local availability of the
species used and have been used in the assessment of impacts on ecosystem services
and informal land uses.
Grasslands support seasonal grazing for sheep and cows; in the foothill zones medicinal
species are also known to be present. A questionnaire has been undertaken to assess
which areas are foraged by local people for wild plants and the types used for
household/dietary and medicinal/homeopathic purpose. The results provide information
on the relative abundance and local availability of the species used and have been used
in the assessment of impacts on ecosystem services and informal land uses.
Habitat Designation
The license area is largely open in nature with a relatively high density of surface water
features.
Most land within the concession area is natural habitat according to the definition in
IFC PS6. The relatively large footprint of the Project means that achieving No Net Loss
of natural habitat is likely to require consideration of offset activities.
IFC Performance Standard 6 (2012) sets out criteria for identifying areas which might
constitute critical habitat. The site as a whole could potentially constitute critical habitat
under criterion:
i)
Because it provides habitat of significant importance to a globally

Endangered species (Egyptian vulture);
and possibly under criterion;
157

ii)
Because it provides habitat for globally significant concentrations of migratory

species.
Additional criteria referred to in IFC PS6 Guidance Notes which could potentially apply
are: Concentrations of Vulnerable (VU) species in cases where there is uncertainty
regarding the listing, and the actual status of the species may be EN or CR and Habitat
necessary for the survival of keystone species.
Additional baseline studies are being conducted to further refine the impact assessment
on biodiversity values at the Amulsar project. If critical habitat is confirmed, biodiversity
offsets will be developed to ensure no net loss occurs, focusing on areas which could
support the species and habitats which are being impacted. One option for an
appropriate offset may be to support the development of the Jermuk National Park.
Impacts to protected floral species will also be minimized through project design where
possible.
A Biodiversity Management Plan is being developed at present and will define clear
management and mitigation strategies for all biodiversity impacts and outline a
comprehensive monitoring plan. The results of continuing biodiversity studies will be
reported in the ESIA.
158

Figure 20.2
State Sanctuaries and Important Bird Areas in relation to the Project Exploration License
159

20.4.6
Air Quality
There are no significant urban or industrial emission sources within the area, and
therefore the existing levels of related gasses (SO2, NOx, hydrocarbons, smoke
particulates, etc) are low to very low.
Baseline monitoring of particulates (total deposition) and gases (including SO2 NOx,
CO, CH4 and volatile organic compounds) at the Project and nearest communities will
continue and will be supplemented by construction and operational monitoring in order
to assess and control (if necessary) emissions to air.
20.4.7
Noise and Vibration
There are no major urban centres or industrial activities in the region that would result in
significant levels of noise. There is a small hydro-electric power plant located less than
1km to the east of the proposed waste rock dump (WD) site, however, noise emissions
from this facility are considered to be negligible in the wider context of the Project area.
The M-2 public highway to the south of the Project experiences relatively constant traffic
conditions over a 24 hour period, with some seasonal variation, however the baseline
local traffic flows on the links in the study area are very low and within the study area
and local village residential receptors, traffic noise is generally considered inaudible.
The baseline noise environment will be typical rural, and experiences very low
background levels throughout the day and night.
Ground vibration and air overpressure results from blasting operations that take place at
mining operations and certain other construction projects. There are no operations of a
similar nature in the locality, therefore these potential impacts are absent in the current
baseline conditions. The potential for effects associated with blasting fall into two
categories; those causing human discomfort (nuisance) and those with the potential for
causing damage to structures. The principal source of vibration and overpressure will
result from blasting to remove rock from the open pit.
20.4.8
Visual and Landscape Aspects
The Project site is in a remote location, with small population in villages in the local area.
The landscape is characterized by steep and rolling topography dominated by the
Amulsar Mountain and the river valleys.
Landscape effects associated with a development relate to changes to the fabric,
character and quality of the landscape and how that is perceived by stakeholders who
have opinions on and/or will be potentially affected by the Project. This includes the
surrounding communities, seasonal herders and visitors to the area. Jermuk markets
itself as a spa town and which includes tourism and associated leisure activities such as
skiing. Tourism necessitates that the overall value and importance of the area is
considered from an aesthetic point of view.
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20.5 Environmental and Social Impact Assessment (ESIA)

A comprehensive ESIA has been prepared and for the purpose of summarizing the
potential impacts and approach to mitigation design and management the environmental
and social impact analysis has been considered separately in Tables 20.3 and 20.4. The
importance magnitude, in terms of significance, taking account of mitigation (i.e. the
residual impact), has been defined as:
NEGLIGIBLE to MINOR: Not significant.
MODERATE: Not significant subject to suitable management or action plans,
including potential for offsite enhancement; otherwise
MAJOR: Significant.
20.5.1
Environmental Impact Assessment
A summary of the environmental impacts from the ESIA are considered in Table
20.3.
161

Table 20.3
Summary of findings from the Environmental Impact Assessment

PHASE
Source & Description
Potential Impact
Soil
Inherent Impact
Mitigation
Residual Impact
Quality
Mountain meadow and pasture soils at elevation above 2000m.

At lower elevations, the soils are generally, brown, black earths or alluvial
in the Vorotan River valley. Soil quality will be affected by earthworks
carried out by the Project.
Moderate
Thin soil profile can be handled and stored using standard mining
operations. Use of relatively long, low storage
mounds <3m in height, will enable long term storage for a
long period. Dressing side of mounds and grass seeding will
reduce risk of erosion.
MINOR
Capability
Soils support grassland also used generally for pasture, which are
more fertile and can be farmed for longer periods of the year at lower
elevations.
Low capability, permanent grassland with low productivity, but valued
for extensive summer pastures.
Moderate
Area of direct disturbance is limited to and relatively small

in comparison to the area available for extensive summer grazing.
Mine design and operation, to maintain access to areas of
grassland, particularly during the summer months.
MINOR
Impact to soil capability through conversation of land use.
Groundwater
Surface water
Quality
Potential risk of contamination of groundwaters from nitrogen

compounds (blasting), ARD (waste dump), cyanide spillage and
seepage from HLF.
Moderate to major
Blast design and good practice identified. Design criteria for

design and operation of the waste dump. Mitigation
measures incorporated into the design of the WD and HLF
to cover operation and climatic conditions experienced.
MINOR
Quantity
Construction and operation of the open pit is likely to affect

groundwater flow regime, with resultant potential impact on spring and
stream flow to the west of Mount Amulsar.
Moderate
Mitigation incorporated into design combined with a water

Management plan during operations.
MINOR
Risk from mine operation to impact supplies at the upgradient and distant
Jermuk springs.
Major
Vibration generated by blasting at site is of insufficient magnitude NEGLIGIBLE

to impact the springs in any way.
Release of ARD, HLF overflow as a consequence of mine

operations into surface waters.
Minor to moderate
Risk assessment has been integrated into the design of

site drainage and water treatment, based on analysis of
materials obtained during site investigations.
Potential impact on important secondary receptors through

tunnels interconnecting basins of Kechut Reservoir and Lake
Sevan.
Major
Reduction or increase in base flows, as a consequence of

alteration in drainage patterns and control of drainage within the mine
site
Moderate
NEGLIGIBLE
Design measures in place for total containment of potential
contaminants. In
the
event
of
leakage,
contaminant
concentrations would not be detectable in the secondary
receptors.
NEGLIGIBLE
Construction of appropriate storage and treatment works to
maintain allowable release rates during periods of high and low
flow.
Reduction in Vorotan River flows through abstraction of process

water.
Moderate
Potential impact greatest during summer low-flow,

MINOR
mitigated by operational management (preferential abstraction of
stored water from HLF stormwater collection pond).
Risk of flooding would primarily affect the operation of the mine

and use of infrastructure
Negligible to moderate
The potential for flood risk has been factored into all
aspects of site design.
Quality
Quantity
Flood risk
NEGLIGIBLE
NEGLIGIBLE
162

PHASE
Potential Impact
Biodiversity
Air Quality
Inherent Impact
Mitigation
Residual Impact
Habitats
The Project area has Alpine and Sub Alpine habitats as well as extensive
areas of montane steppe and steppe grasslands which are managed
through extensive summer grazing. The habitats are natural according to
the definition in IFC PS6. The grassland communities are species rich and
include some species of conservation priority, particularly in the alpine
communities.
Moderate
The Project has a large footprint of disturbance on natural habitat MODERATE

with high species richness which is extensive in Armenia but
also declining rapidly in Armenia and is threatened globally. There
will be a residual impact requiring measures through a biodiversity
action plan to achieve no net loss.
Flora
The vegetation is generally important because of its species richness, rather

than because it supports individual species of high conservation priority.
The Project affects one plant species Potentilla porphyrantha which is
listed as Critically Endangered in the Armenian Red Book.
Moderate/ Major
A species action plan is being developed which is likely to include MODERATE

measures to protect a proportion of the population and efforts to
translocate individuals located within the Project footprint.
Fauna
The diversity of habitats, combined with the presence of abundant water and
low levels of disturbance and human modification have contributed to a rich
diversity of species. These include species which are included in the IUCN
Red List and the Armenian Red Data Book. Animal species will be exposed
to loss of habitat through the Projects physical footprint, increased levels of
disturbance and other indirect impacts associated with mining and mineral
processing.
Moderate/ Major
There is some potential for off-site mitigation to maintain, and in MINOR/ MODERATE
some cases enhance biodiversity within the locality taken as a
whole.
Birds
The Project area is part of a global flyway and is particularly important

for migratory and breeding raptors, including Egyptian Vulture which is
Endangered on the IUCN Red List. Other species are listed as Vulnerable
and are included in the Armenian Red List. Parts of the Project affect
Gorayk IBA directly, which is considered critical habitat. The valley of the
River Vorotan outside the IBA boundary provides important supporting
habitat for many of the listed species in the Gorayk IBA.
Major
The location of the HLF has been subject to assessment of detailed MODERATE
design alternatives and the current proposed location is considered
to be the only feasible design. Measures will be needed to offset
the resulting loss of hunting area for lesser kestrel (a primary
reason for designation of Gorayk IBA). Some species such as
corncrake will be difficult to provide mitigation for. Species listed in
the IBA which will be affected by the Project will be included in a
Biodiversity Action Plan supported by monitoring.
Dust
Emissions of dust result from surface mining activities, including overburden /

rock and ore extraction, haulage and processing. In addition, fugitive
emissions of dust result from areas of bare and disturbed ground in dry windy
conditions. Vulnerable receptors include: flora and fauna, surface water, and
human communities in terms of nuisance and potential health impacts. A very
high proportion of fugitive dusts will settle within a short distance from the
emission point or source. The mine activities are remote from human
settlements and the land close to the mine is not subject to intensive
agricultural usage.
Negligible to Moderate
Dust management plan to prevent release of particulates into the NEGLIGIBLE

area surrounding the site. Long term monitoring will enable analysis
of the effectiveness of the management plan and provides feedback
to manage operational procedures and seek alternatives to minimize
emission of particulates over the life of the mine
Gaseous emissions
Acid gases from vehicle exhaust fumes related to construction,

extraction, loading and haulage operations. Vulnerable receptors include
human receptors. However, these activities do not take place within a
close proximity to settlements.
Negligible
Regular maintenance and scheduling of all vehicles used at the NEGLIGIBLE

mine. Site speed restrictions on haul roads to reduce optimize
vehicle use and fuel efficiency.
163

PHASE
Potential Impact
Inherent
Impact
Mitigation
Residual Impact
Greenhouse gas emissions derive from onsite diesel use from mobile plan, oil and gas
for heat. Offsite source derives from electrical usage for static plant, conveyors, lighting
and general industrial and business uses.
The local environment is vulnerable to climate change, in relation to natural habitats,
duration of snow cover and change in mean annual, mean and maximum daily
temperatures.
Minor
Of the fuel sources, operational procedures should be directed

towards the efficient use of diesel and heating oil that result in
lower GHG emissions/kW.
Electrical supply in Armenia is principally sourced from
nuclear and gas, with future projects to develop both
geothermal and wind that should reduce the embedded GHG
emissions associated with grid electrical supply.
Noise
Emissions associated with operational plant within the mine.

Vulnerable receptors include dwellings within settlements (closest is 5km distance), herders
and summer grazing flocks, and disturbance to off-site wildlife.
Negligible to
moderate
Site noise levels will be maintained within an acceptable range of NEGLIGIBLE

between 32 to 37 LAeq dBL. At these levels operations will be
inaudible at nearest settlements and have a negligible effect on
potential disturbance of summer grazing and herding.
Air Overpressure
Blasting operations for extraction will result in instantaneous noise emission termed air over
pressure. Due the remote location of the mine, there are limited human receptors; however
there is the potential for disturbance of fauna and summer grazing herds.
Minor
Blasting design and practice can be used to mitigate this

impacts and actual emission can be controlled to a level
between 94dBL and 109dBL.
Vibration
Ground vibration that result from the blasting operations. Due the remote location of the mine,
there are limited human receptors; however there is the potential for disturbance of fauna and
summer grazing herds.
Negligible
Blast pattern designed to prevent excessive vibration and negate NEGLIGIBLE
Greenhouse gases
Landscape & visual
Visual intrusion of activities Excavation of mining void and ancillary infrastructure exposed and elevated ridge with views
from surrounding areas with potential views towards the open pit from Saralanj to south.
Above ground structures and mounds, these are dispersed within the development area and
tend to be visually confined, by surrounding relief. Structures and waste rock dump will be
visually prominent close to, but not from visually important receptors due to topography and
distance separation.
MINOR
MINOR
any potential.
Negligible to
Moderate,
depending on
viewpoint
The footprint of direct disturbance has been defined and will be NEGLIGIBLE TO MINOR
maintained by delineating the outer boundary with a perimeter soil
mound. Shape and seed the outer face of the mound.
Appropriate maintenance, as identified in ESAP directed to best

practice in terms of the appearance of operational areas.
NEGLIGIBLE
164

20.5.2
Summary of Environmental Impacts
By adopting a wide range of impact management and mitigation measures, it is

considered that any potential residual environmental impacts can be reduced to a
moderate or low (or below) level. Mitigation measures include reduction of emissions by
active dust control; biodiversity offset measures, blast limitation, water management and
treatment, monitoring programs with stakeholders consultation and participation, good
waste management practices, and progressive rehabilitation. Full mitigation measures
are defined in the ESIA, which has been subject to an iterative process in parallel with
mine design and operational practice. Therefore, mitigation measures that formed part
of the design have been included in the development costs. In addition, there are a
range of associated management plans which will be incorporated into the design and
operations, through procedures, as well as Lydians ESMS. Early adoption of
management plans allows for efficiency of design and therefore the potential for cost
savings and these have been considered during the iterative process of site design.
20.6 Social Context and Baseline
20.6.1
Archaeology and Cultural Heritage
A phased assessment has been undertaken by in-country experts. The initial desk study
phase for the Project area (5000ha) did not indicate the presence of any sites or
features of cultural or archaeological significance within the license. However,
subsequent reconnaissance surveys revealed the presence of several features of
potential archaeological interest, such as tombs and kurghans (graves). Most features
are located away from areas of proposed maximum disturbance and some appear to be
already disturbed and degraded.
Currently none of the features identified are thought to necessitate in-situ preservation
which could affect the progression of development. All features are being recorded by a
State archaeologist; working in concert with international archaeologists. Appropriate
measures will be identified for off- or on-site preservation, as appropriate.
20.6.2
Demographic, Land-Use, Family Structure and Migration Patterns
The study area for socio-economic considerations is comprised of the villages of

Gorayk, Saravan (including Saralanj and Ughedzor), and Gndevaz, all of which lie within
a 9km radius around the Project, as well as the city of Jermuk (and the associated
village of Kechut), located 14km from the Project. Socio-economic baseline data were
obtained through reconnaissance visits, a household survey covering all rural
households and a sample of Jermuk households, a number of focus groups with
community members, as well as semi-structured interviews with a range of community
members, community leaders and administrators.
The rural settlements within the study area have a naturally aesthetic setting, while
Jermuk has a more urban character, with greater density of buildings and people. As a
spa town it also has a few iconic estates.
The total population of the study area is circa 8000 people; over 6000 of these people
live in the city of Jermuk (including the associated village of Kechut) and about 2000 in
165

the three rural communities of Gndevaz, Saravan and Gorayk. The total figure includes
an estimated 60 seasonal (summer) herders based in Ughedzor and in many other
locations in and around the Project area, with main herder camps being focused around
the proposed site of the waste dump and HLP.
Armenia is ethnically homogeneous and the study area follows this trend over 99% of
study area residents are Armenian Christian. As seasonal and permanent, international
and domestic migration is an important factor in Armenias population mix and trends,
the national census distinguishes between the legally registered resident population (de
jure) and actually resident (de facto) population. The figures above refer to de jure or
registered residents, except for the seasonal herders, whose numbers have been
estimated by WAI.
The de facto populations of Gorayk and Saravan are skewed in favour of working age
women, showing high out-migration among working age men. Gndevaz also
experiences male out-migration, but to a lesser extent. Jermuk residents tend to migrate
permanently. All except Gorayk are depopulating communities; Gorayks migration trend
has reversed since 2008 and it now has a slowly growing population. Discussions with
stakeholders suggest that the reversal in the migration trend relates, at least in part to
employment opportunities within Geoteam.
Household sizes tend to be large in the study area, with the majority of rural areas
averaging 5-7 members, while Jermuk averages 3-4 members per family. Family life and
family allegiance are important to the local communities. Often family units consist of
different generations, with sons bringing their wives into the family home. Mother and
daughter-in-law relationships are paramount, with the mother-in-law managing the
household assisted by daughters and daughters-in-law. Although women have an
important role in the household, men are regarded as the head of the family and
community affairs are predominantly managed by men. There is no evidence of
generation conflict, with young men and women performing their roles within the
extended household.
20.6.3
Household income
The livelihood strategies of the local households are multiple and flexible, with
household members engaging in a multitude of subsistence and cash based activities.
In general, women engage in subsistence food production and agricultural productbased small scale business (cheese, butter). Men take care of crop and fodder
cultivation and seek formal employment where available. The majority of household
income levels are under AMD 70,000, with Gndevaz reporting the lowest proportion of
households with earnings under this threshold compared to Saravan and Gorayk.
Gndevaz also has a small proportion of relative wealthy households with monthly
incomes of AMD 300,000 400,000.
Agriculture, animal husbandry and agricultural products (such as cheese) are the major
economic activities in the villages of Gorayk, Gndevaz and Saravan. The majority of
Kechut residents rely on their vegetable gardens for subsistence, but a small proportion
are formally employed in Jermuk. Settlement level information for all the settlements
mentioned above has been incorporated into the impact assessment process. Barriers
to economic growth have also been identified. Potential employment in the mining
166

industry is seen both as a benefit for the unemployed and as a deterrent to agricultural
growth.
Economic activity in Jermuk is based on tourism and local services. Tourism
development potential in Jermuk has been explored by a development plan produced by
USAID and endorsed by Jermuk administration.
20.6.4
Land Use
The predominant land use in the vicinity of the mine site is agro-pastoral use, including
cattle grazing, cultivating grains and other crops, fruit orchards, bee-keeping and hay
cropping. Agricultural land is subdivided into arable land, hayfields, irrigated arable land,
agricultural lands and pasture. Within the Project area, the majority of the land use is for
extensive summer grazing. At lower elevations, in the Vorotan River valley, grazing
takes place over a longer period of the year and summer grass is conserved for winter
hay feed. Rural residents tend to change the landscape through small-scale
interventions, without recourse to authorities or community leaders. This includes
creating irrigation channels, dammed ponds and vehicle tracks on previously pristine
land. Non-agricultural land uses include foraging for plants and mushrooms, collecting
firewood, as well as hunting and fishing for recreation. Residential and commercial land
uses exist within individual settlements; most residences also have small vegetable
gardens.
20.7 Social Impact Assessment
A summary of the impacts from the ESIA are considered in Table 20.4. The assessment
identifies positive (beneficial) impacts and whether these can be enhanced through
appropriate management and engagement. In addition, potential adverse impacts have
been identified and mitigation measures identified that would reduce or negate the
impacts.
167

Table 20.4
Summary of Social Impacts
Potential Impact
Demographics
Improved housing
conditions
Increase in family stability
Decrease in community
cohesion
Description
House-building due to in-migration and greater incomes
would add flexibility to the housing market in the longer
term. Vacant homes would also likely be occupied and
improved, thereby improving housing stock.
Retention of local labor in the area would increase family
stability. This would particularly benefit families where one
or more members migrate elsewhere for work.
In-migration, differential income levels and competition for
project benefits would result in community cohesion issues.
Inherent Impact
Rating
Negligible
beneficial
Minor
beneficial
Major
adverse
Mitigation/ Enhancement
No mitigation required.
Enhancement
Preferential recruitment of de jure residents of study area.
Local residents supported in finding local work in mine off-shoot businesses.
Mitigation
Expatriates and majority of non-local employees housed in mine camp.
Local recruitment and training in construction phase.
Residual Impact
Rating
NEGLIGIBLE
BENEFICIAL
MODERATE
BENEFICIAL
MODERATE
ADVERSE
All residents and groups within study area to be considered for local
recruitment, training, community development funding and other benefits.
Two-way communication.
Eligibility for benefits reviewed periodically.
Strict regulations for respectful interaction.
Formal negotiations only by specialist trained staff.
Weakening of
traditional leadership
structure
Shift in the balance of wealth and power would undermine

traditional leadership and influence structures.
Minor to Moderate
adverse
Company culture to encourage positive integration with local community.

Mitigation
Hamaynk leaders involved in community development and investment
decisions as well as low-skilled labor recruitment processes. Programme of
engagement through to commencement of construction and beyond
MINOR
ADVERSE
CLCs maintained and reinforced.

Increase in crime and vice
Increased economic inequality and the influx of new people

into the area would increase levels of crime and vice.
Moderate
adverse
Women, children, youth and elderly people are especially

vulnerable.
Individual grievances re-routed through CLCs and Hamaynks.

Mitigation
Zero Tolerance policy for gambling, drugs and visiting prostitutes, for Amulsar
employees.
MINOR
ADVERSE
Financial management advice to employees on methods for saving rather than

disposing of income.
Provision / improvement of sports and recreation facilities available to
employees and members of the community.
Livelihoods &
economics
Macroeconomic benefits
Land taxes to Hamaynks and revenues and other taxes to

the government of Armenia will result in macroeconomic
benefits.
Moderate
beneficial
Improved local livelihoods
Direct and indirect job creation will lead to improvements in

local livelihoods.
Minor
beneficial
Cooperation with Hamaynk and police in anticipating and preventing crime and
vice.
Enhancement:
The existing programme run by Geoteam to support financial management
skills within the town Mayors and councils will improve the benefits achieved by
this financial windfall.
Enhancement
Within the timetable, financial and technical skills requirements and constraints,
the Amulsar project will maximise the employment of local residents.
MAJOR
BENEFICIAL
MODERATE
BENEFICIAL
168

Potential Impact
Increased links to markets /
avenues for commerce
Inflation
Inherent Impact
Rating
The Project will generate an increase in the flow of people in Moderate
and out of the study area, thereby bringing consumers
beneficial
closer to local traders and producers in agricultural products
and tourism services.
Enhancement
Employees, contractors and visitors encouraged to use local goods and
services, as company policy and culture.
Significantly higher pay scales for project employees as

compared to local residents would result in inflation in
essential goods.
Major
adverse
Mitigation
Local recruitment, as well as boosts to the agriculture and tourism sector as
discussed above.
MODERATE
ADVERSE
Description
Residual Impact
Rating
MODERATE
BENEFICIAL
Local residents who do not receive benefits from the project

(employment or other) will be disproportionately affected.
Community
Health
Economic
Displacement,
including: loss of access to
source of livelihood; loss of
right to change / harness
natural resources; overall
decrease in land available for
agricultural
livelihoods
Land take and restriction of access to a proportion of

company-controlled land will result in economic
displacement of some seasonal herders, local herders and
foragers.
Moderate
adverse
A Full Livelihoods Restoration Plan being prepared outcome still to be

assessed.
MODERATE
to
MINOR ADVERSE
(subject to finding
of the plan)
Communicable disease linked

to poor environmental/social
conditions
Introduction of communicable diseases into the area by the

incoming workforce.
Minor to Moderate
adverse
Mitigation
Community health information system (CHIS) to monitor health statistics of
acute and chronic respiratory disease and TB.
MINOR
ADVERSE
Overcrowding due to in-migration of family members.

Health systems strengthening (HSS) to improve TB case detection and case
management in local dispensaries.
Develop and maintain site based TB policies and programmes. This can include
TB screening at pre-employment.
Maintain outbreak/pandemic preparedness and response plans
Water , sanitation and waste
related disease
Potential pollution of water used by local residents by project

activities.
In-migration and use of water for industrial processes will
increase the demand for potable water in the area.
Moderate
adverse
Mitigation
Water quality and environmental management and surveillance from the
project.
MODERATE
BENEFICIAL
Ensure an effective potable water supply to the Project that does not influence
local supply and similarly, effective waste water management from the mine
operations and accommodation camp.
Conduct information education and communication (IEC) campaigns in the
workforce on proper water use, hygiene and sanitation.
169

Potential Impact
High risk sexual practices,
STIs including HIV/AIDS
Description
Increase in the ability to transmit STIs; either from transport
workers or through promotion of movement of people in an
out of the study area.
Inherent Impact
Rating
Major
adverse
Disposable income will increase which may increase the

potential for forms of transactional sex to occur (see crime
and vice).
Mitigation
Develop a HIV/AIDS policy and programme that incorporates considerations for
both the workplace and community.
Residual Impact
Rating
MODERATE
ADVERSE
Develop a monitoring system on key HIV and STI indicators in the local health
care facilities.
Support local IEC campaigns on HIV and STI awareness
HIV and STI prevention programmes for long distance truck drivers and drivers
of light duty vehicles.
Develop local gender empowerment and IEC programmes to reduce the
potential risk of increased transactional sex in the area.
Food and Nutrition
Food inflation in the area may result due to supply and

demand impacts from the Project.
Minor
adverse
Mitigation
Ensure adequate access to local agricultural and grazing land through planned
offsets as required.
MINOR
ADVERSE
Consider periodic food inflation surveys.

Undertake specific nutritional surveillance through data in the local health
centres as well as in adults.
This data should be fed into the proposed CHIS.
Non communicable diseases
(NCDs)
The Project development is unlikely to play a significant

direct role in increasing NCDs other than the potential to
improve the local economic situation, which may result in
poor lifestyle practices as a result of increase disposal
incomes.
Moderate
adverse
Mitigation
Support health education programmes as part of community based outreach
programmes.
MODERATE
BENEFICIAL
As part of the medical surveillance activities in the workforce screen for NCDs.
Initiate wellness programmes in the workplace for the prevention of chronic
diseases through management of modifiable risk factors.
170

Potential Impact
Injuries and accidents
Description
Project may increase transport corridor injuries through road
traffic accidents.
Inherent Impact
Rating
Major
adverse
An improved economy in the area may allow more people to

be in a position to afford motorised transport with a
potentially increased risk for accidents.
Mitigation
Develop community security and safety management plans for the Project.
Residual Impact
Rating
MINOR TO
MODERATE
ADVERSE
Contractor management for project transport vehicles.

Strictly enforce the drug and alcohol policy for all project associated vehicles.
Work with the Armenian Roads
Directorate (or its local representatives) to identify accident prone areas for
pedestrians. Clear signage, targeted at both traffic and pedestrians (different
sets of signage may be required at some points) will be installed at the accident
prone points identified.
All haulage drivers should undertake appropriate training courses and drive with
consideration that there may be animals present on roads. Employees in
general must be aware of how they drive around site and into villages in
general.
Signage targeted at pedestrians will either be pictorial or in Armenian, and will
be located to allow maximum visibility for pedestrians.
Environmental Health
Determinants
Project effects, releases and effluents may impact

environmental quality in a range of ways. (Please refer
Table 20.5).
Minor to Major
adverse
Mitigation
Develop appropriate environmental management and monitoring programmes
addressing each environmental parameter that is likely to be affected. (Please
refer to Table 20.5).
MINOR
ADVERSE
Social Determinants of Health
Project may improve local livelihoods, thereby affecting

health and well-being.
Moderate
beneficial
Enhancement
Evaluate opportunities to support local economic development with a local on
improved quality of life and perceived well-being.
MAJOR
BENEFICIAL
Project may reduce community cohesion, affecting health

and well-being.
Moderate
beneficial
Mitigation
Effective communication strategies to ensure the communities are aware and
understand the Projects planned and current activities.
MODERATE
BENEFICIAL
Perform regular perception studies which include elements on perceived wellbeing and quality of life.
Health Services and Systems
Adverse effects of increased demand from workforce and

other in-migrants.
Major
adverse
Mitigation
Develop and maintain a workplace occupational and primary health care centre
to cater for the health care needs of the construction workforce.
MAJOR
BENEFICIAL
In operations it may be beneficial supporting local HSS to upgrade the facilities

so that primary health care is managed off site and only the occupational health
service is performed on site.
Monitor the demographic changes in the immediate Project area and work with
local health authorities to determine if the available health facilities are
adequate for the needs of the community based on these changes which have
been created by the Project.
171

Potential Impact
Mine site accidents
Description
Some activities on the mine site will be hazardous to human
health.
Inherent Impact
Rating
Major
adverse
Mitigation
Areas of the mine site closed to third parties will be marked by clear pictorial
signage, as well as written signage in Armenian and Russian.
Lydian will investigate soft barriers for dissuading livestock from parts of the site
livestock, as far as feasible given biodiversity impacts of such barriers.
Residual Impact
Rating
MINOR
ADVERSE
Mine site safety awareness for third parties will be included as a theme in ongoing formal and informal community engagement modules.
Through mine site management and internal communications, employees and
contractors will be given up to date information on third party activity hubs on
and around the mine-controlled area, in order to avoid accidents.
Security conflicts
Potential conflicts between mine site security forces and

third parties.
Moderate
adverse
Mitigation
Training will be provided for security staff, aimed at inculcating a culture of nonaggressive assertion.
A small number of security and other staff will be trained in conflict mediation.
MINOR
ADVERSE
Strict controls will be applied on the use of arms; a zero tolerance policy will be
applied on the use of arms outside of a small number of specific security duties
(e.g. gold room security). The use of their mine issued arms by security staff in
extracurricular activities, such as shooting, will be strictly prohibited.
Appropriate compensation arrangements will be carried out where required.
Archaeology and
Cultural Heritage
Initial assessment of the Project area (5000ha) did not

indicate the presence of any sites or features of cultural or
archaeological. The most recent reconnaissance surveys
undertaken by international experts, have revealed the
presence of several features of potential archaeological
interest, such as tombs and kurghans
Minor to Moderate
At present, in-country experts are in the process of completing a phased

assessment. The features that have been identified are being excavated but are
known to be located away from areas of proposed maximum disturbance, with
some of the sites showing signs of being disturbed and degraded. Findings of
the on-going excavation will provide further details on the overall importance of
features on site, although at present it is understood that in-situ preservation
which could affect the progression of development will not be necessary. State
archaeologists will record all features prior to construction, with appropriate
measures developed for off- or on-site preservation.
172
MINOR
(initial
assessment
to
verified once final
report from experts
are
made
available).

20.7.1
Summary of Social Impact Assessment
Historically, the region has not seen any mining activity. Extractives industry activities
closest to the site include a small quarry close to Gorayk, with larger mine operations
present in the south of Armenia. During exploration activities and stakeholder
engagement, it has become apparent that local people are generally supportive of the
Project.
The potential benefits from employment are welcomed, however in some settlements
(Gorayk and Saravan) community expectations are high. It is also the case in Jermuk as
it is a tourism and spa important to Armenians.
Other positive impacts relate to improvements in local livelihoods through direct
employment by the Project, as well as knock-on economic growth; and macroeconomic
growth through taxation, land rent and other revenues paid by Lydian. Positive impacts
range from minor to moderate; provided enhancement measures are implemented.
With appropriate mitigation, residual adverse impacts range from negligible to moderate
and include health impacts around water and sanitation, non-communicable diseases,
as well as health services, have been assessed as positive impacts after mitigation,
which mainly relates to information, education and communication programs.
Effective implementation of the mitigation measures defined in the ESIA will be essential
to derive and maintain positive benefits associated with the Project through the
construction and operational phases. Lydians social strategy and on-going community
development measures are expected to provide additional benefits to local communities,
over and above Project impacts.
Social impacts at mine closure stage have also been assessed; depopulation, economic
decline and breakdown of some community services are the main impacts expected.
Mitigation measures have been identified and involve progressive social investment,
community development, economic diversification and capacity building activities within
the operational stage.
The details of mitigation and enhancement measures are considered in the ESIA; the
associated management plans have been defined and will be incorporated into
operational controls, as well as Lydians ESMS.
20.8 Consideration of Alternatives
During the feasibility stage of the Amulsar Project a review of the potential project
design alternatives was undertaken in line with the requirements (rationale) of the
Project. These requirements are listed below:
Extraction and processing technologies and techniques;
Siting of major Project facilities (heap leach pad, waste rock dump etc)
Infrastructural options i.e. road development;
Auxiliary facility options i.e. shift camp; and
173

The zero alternative (whereby the Project does not take place at all).
The ESIA summarizes the key decision process to reach the Project design as
presented in this FS.
Due to the potential environmental impacts associated with a HLF and waste rock dump,
a considerable resource was assigned to the site-selection process for these items of
infrastructure. The identification of a suitable site to accommodate these items of
infrastructure has key environmental, social and economic implications for the viability of
the Project. The process is detailed in the ESIA.
20.9 Environmental, Health and Safety Project Design Parameters
Project infrastructure, especially those facilities which will hold (either temporarily or
permanently) or move large volumes of materials, can present a health and safety risk
or can cause considerable environmental contamination if they are not appropriately
designed, or if they fail.
The successful integration of this FS and ESIA has involved a dynamic approach
throughout the studies. One aspect of this integration involved the circulation by WAI
(Guidance on Environmental, Health and Safety Design Criteria, October 2011) of a
compendium of qualitative and quantitative environmental, health and safety (EHS)
design criteria to the FS team. This document contained a series of relevant
environmental design values (EDVs) for design of the Project, including those relating to
water quality, effluents, air quality/atmospheric conditions, noise, vibration, waste,
hazardous materials and soil quality. The proposed engineering design and operating
measures of the major mine infrastructure are therefore in line with international best
practice and relevant environmental criteria.
20.9.1
Amulsar Mine EHS Engineering Measures
ESIA and FS process were iterative and dynamic. Environmental and Social
Assessment influenced project design. In consequence a number of potential impacts
were designed out, the summary in Table 20.5 provides an overview of the engineering
measures incorporated into the design of Amulsar Mine infrastructure which prevent or
limit releases and effects and in so doing afford direct and/or indirect protection to the
environment, community and worker health and safety. Any operational practices which
are inherited by virtue of these designs, and which contribute to environmental and
worker wellbeing, are also outlined.
It should be noted that the findings of the impact assessments will include additional
mitigation and management measures which should be applied to the detailed design,
construction, operation and closure phases of the Project. These are outlined within the
various ESIA framework management plans and the Environmental and Social Action
Plan (ESAP) and will underpin Geoteams operational Environmental, Social
Management and Health and Safety Systems as the Amulsar mine develops. Therefore,
this section does not detail all standard, site-wide management techniques which will be
employed, such as those relating to mining and hauling.
174

The design of the major infrastructure at Amulsar mine includes measures to ensure the
integrity of the structures in relation to ground conditions present and in order to counter
the predicted seismic risk. These are outlined in the HLF Feasibility Design Report
(Golder, 2012d) and earlier sections of the FS. These have been considered in the
evaluation of Project risks and these measures are not reiterated here. The
environmental and social considerations associated with the assessment of suitable
locations for the HLF and WD are outlined in the Consideration of Alternatives chapter of
the ESIA and were included in a rigorous site selection exercise.
The design, engineering and management measures outlined in Table 20.5 are
designed to prevent or reduce to acceptable levels, the release of any potentially
harmful substances to the surrounding environment under normal operating conditions.
Consideration is also given to extreme weather events (rainfall, snowmelt and flooding,
as appropriate). Standard operating procedures will also limit environmental and
occupational exposure.
Amulsar Mine includes items of proposed mine infrastructure which hold or use
significant volumes of materials and/or hazardous substances. Design measures and
operational parameters have been incorporated in these facilities in order to prevent, or
reduce to acceptable levels, potentially harmful releases or effects and in so doing afford
direct and/or indirect protection to the environment, community and worker health and
safety. Table 20.5 below, identifies and summarizes these elements from the FS
designs. Any operational practices which are inherited by virtue of these designs, and
which contribute to environmental and worker wellbeing, are also outlined.
175

Table 20.5
Environmental, Community and/or Health & Safety Design Protection Measures and Best Management Techniques
Heap Leach Facility Leach Pad, Collection Ponds and Adsorption, Desorption and Recovery (ADR) Plant
ICMC Compliance
Lead Auditor verification of design plans (WAI, Ref. CAB/SH/ZT520088/001, February 2012) against Institute Standard of Practice 4.8.
Internal Audit Protocol checklist developed (Golder, 2011).
WAI ESIA framework Cyanide Management Plan with priority actions for Code compliance.
Operational design
Zero discharge (closed system management of process solution, storm runoff and snowmelt flows).
Ecological, Community
and Worker Health and
Safety
Fencing and signage around leach pad and collection pond perimeter to prevent access to dangerous areas and contain a buffer to prevent foraging and grazing in the vicinity of the pad. Fencing and security at ADR
Plant to control access
Mechanical staking of ore, mixing and application of cyanide, minimized worker exposure.
Maintenance and operations staff provided appropriate PPE and ICMC training.
Implementation of ICMC compliant Cyanide Management and Heap Leach Facility Management Plans.
Targeted cyanide application via drip emitters, limiting atomization and windblow.
Saturated pad, controlled stacking, progressive rehabilitation, inhibiting dust emission.
Fencing around pad and collection pond perimeter will be stockproof (mesh) to prevent access to larger mammals, including livestock.
Process ponds will be covered with nets to deter and protect avian life.
Lighting will be directional to minimize effect.
Leach Pad
Water resource
protection
The composite liner is designed to prevent seepage of cyanide solution to underlying soils and groundwater. It has been desig ned to inhibit any basal seepage to, in line with recommended thresholds. The composite
liner comprises (base to top):
o 30cm thick compacted soil liner of adequate (low) permeability (k < 1 x 10 -8 m/sec); and
o 2mm thick linear low density polyethylene (LLDPE) geomembrane
Groundwater monitoring wells will be installed down-gradient and intermediate to the River Vorotan and around the HLF periphery prior to construction.
The pad will use a cyanide solution of 250ppm. The usual limit of all discharges is 1ppm and ICMC threshold for discharges t o surface waters (0.5 mg/l WAD) should a leak occur under abnormal conditions. Any
planned discharges of eventual detoxification will need to meet these thresholds.
The HLF is located outside of the 100-year flood plain which will prevent surface water contamination in predictable flood conditions.
Clean surface runoff water (precipitation and snowmelt) from upstream catchments will be diverted away in diversion channels and discharged to the River Vorotan. Contact runoff water will be diverted down-gradient
to single-lined collection ponds and/or the WWTP influent equalization basin
5m setback between the pad perimeter berm crests and the ore heap toes to reduce the risk of process solution release due to upset conditions during operations;
Solution control
An enhanced solution collection system will minimize solution recovery and reduce the risk of losses by minimized hydraulic head on the underlying liner (0.6m maximum). This consists of:
o A network of collection pipes within a minimum 60cm thick free-draining granular fill layer; and
o 2mm thick LLDPE geomembrane rubsheets beneath large diameter collection pipes to reduce wear and damage to the pad liner.
Solution and storm runoff flows from leach pad cells via transfer pipes to pregnant and intermediate ponds.
Leak prevention
A Limited and targeted Leak Collection and Recovery System (LCRS) will be installed at the base of the pad, beneath liner, in areas were the highest potential for elevated hydraulic head and/or concentrated flows
occur. This system will enable the capture and diversion of any abnormal leaks in a closed system and provide a stimulus for additional monitoring protocols to be implemented. The LCRS comprises (interconnecting):
o Transmissive drains underlain by a secondary geomembrane liner to;
o Down-gradient sumps at the low point of each pad cell with;
o Sump pumps which remove any leaked solution in a zero closed system.
Solution Ponds
176

Water resource
protection
Pregnant and Intermediate process solution ponds will have conventional composite double-geomembrane liner system composed of upper (primary) and lower (secondary) geomembranes, with an intermediate highly
transmissive LCRS layer. The lower (secondary) geomembrane will be a 2mm smooth LLDPE geomembrane underlain by a 30cm thick compacted, adequate (low) permeability (k < 1 x 10-8 m/sec) soil liner. The upper
(primary) geomembrane will be a 2mm single-side textured (for traction) HDPE geomembrane. Flow to either pregnant or intermediate ponds will be controlled by valves. Drain pipe capacity is for the predicted solution
flow plus infiltration from the 100-yr/24-hr storm. Process ponds designed with sufficient capacity to contain 8 hours of normal operational solution flows plus conta inment of 24 hours of solution draindown from the ore
heap in case of operational shutdown due to pump failure or power loss
The LCRS will be a highly transmissive geocomposite layer between the geomembranes on pond slopes and bottoms, connected to a LCRS sump. Geocomposite will be a 5mm geonet heat-laminated on both sides with
270 gr/m non-woven geotextile. Should a leak ever occur through the primary geomembrane, it would flow through the geocomposite to the LCRS sump, where it would be removed via a pump. The design intent of the
LCRS is to ensure that no hydraulic head occurs on the secondary (lower) geomembrane, thereby removing any driving force required for seepage to occur through that geomembrane.
Divider berm (3m wide and 1m deep below pond crest) between pregnant and intermediate ponds for solution and storm runoff.
Spillway from intermediate pond to storm event pond for storm runoff overflow.
Storm Ponds
Water resource
protection
ADR Plant
Storm Event Pond

Capacity for 150% of the 100-yr/24-hr storm flow from the leach pad and collection pond areas. Composite liner system comprising (bottom to top) a 30cm of adequate (low) permeability (k < 1 x 10-8 m/sec) soil layer
overlain by a 2mm single-side textured (for traction) HDPE geomembrane and a 30cm minimum compacted thickness of cover fill in pond base (to anchor geomembrane against high winds).
Overflow Pond
Downgradient of the Storm Event Pond with interconnecting spillway to divert and contain overflow discharge from the Storm Event Pond, should a low probability event or series of events occur that exceed the project
design containment criteria. The Overflow Pond provides an added 39,000 m 3 of containment capacity and will be lined with a 30cm minimum compacted thickness of low-permeability (k < 1 x 10-8 m/sec) soil.
The overflow pond should also be empty during normal operating conditions except for water from direct rainfall or snowfall
Ore Crushing and Transportation

Operational status
Zero emissions at housed crushing complex (closed system management of dust emissions).
Ecological,
Community
and
Worker Health and
Safety
The crushing complex is housed and will minimize fugitive dust by use of covers, guards on drop points and conveyors, together with an active dust extraction system, to maintain a clean air working environment.
A continuous water spray system will be utilized at each of the two primary dump hoppers. Water sprays will add approximately 100 gpm per dump hopper.
The overland conveyor will be covered and fitted with minimal transfer stations. Transfer stations will be at remote locations and drop points will be sealed. A bin vent (small dry dust collector) can be installed at each drop
point which would collect the dust and drop it back on the conveyor.
Water mist spray system will be used in summer months on the grasshopper (mobile) conveyors and radial stacker.
Overland conveyor will follow topography to reduce visibility.
Waste Dump Facility Dump, Collection Ponds and Water Treatment Plant
Waste Dump (WD)
Operational Status
Controlled and treated discharge only
Ecological,
Community
and
Worker Health and
Safety
Fencing and signage around WD and collection pond perimeter to prevent access to dangerous areas. Fencing will be stockproof (mesh) to prevent access to larger mammals, including livestock.
Mechanical staking of waste will minimize worker exposure.
Maintenance and operations staff provided appropriate PPE and ICMC training.
Implementation of ARD Management Plan
Progressive contouring, rehabilitation and seeding of dump to reduce dust and prevent contact water pathway and ARD generation.
Contact pond will be covered with nets to deter and protect avian life.
Waste dump will use topography to reduce visibility to latter phases of development. The latter stages of development of the north face of the dump will be stepped back to the south to lessen its visibility.
The WD liner will comprise a 45mm thick low-permeability (k < 1 x 10-9 m/s) compacted soil layer above the underdrains to provide separation of the non-contact subsurface seepage from the overlying contact water from
the waste material.
Water Resource
Protection
177

Underdrains
Primary underdrains will be constructed in main drainages, secondary in tributary drainages and at locations of seeps and swa les (and connect to primary underdrains). Tertiary underdrains constructed in flatter portions of
WD valley bottom and connected to primary underdrains.
Underdrains will intercept and route subsurface water beneath the WD to the influent equalization basin (IEB) located downstream of the WD.
Underdrain flow will be estimated based on available drainage flow data collected by Lydian in 2012 during the spring runoff season.
Overdrains
An overdrain system located at the base of the WD, above the soil liner, in those areas where the potential for concentrated flow occurs, will convey contact water that percolates through the waste material to the IEB
downgradient of the WD.
Primary overdrains will be constructed at locations of main drainages within the WD site, secondary at locations of tributary drainages within the WD site and connect to primary overdrains. Tertiary overdrains will be
constructed within the WD footprint at 30-m centres and connect to secondary and primary overdrains.
Overdrains will convey the combined maximum spring snowmelt flow and 100-yr/24-hr design storm flow.
Progressive clay capping of dump to reduce snow melt/rainwater infiltration and minimize ARD.
Perimeter berms and diversion channels will route non-contact storm and snow meltwater runoff from upstream catchments away from the WD and collection ponds.
Collection Ponds
Influent Equalization Basin (IEB)
The IEB will have a composite liner system comprising 30cm compacted low-permeability (k < 1 x 10-8 m/sec) soil overlain by a 2mm HDPE geomembrane.
Sized for 24-hr storage of maximum underdrain flow plus overdrain flow from the 100-yr/24-hr storm event (snowmelt and precipitation), and to provide flow control to the WWTP
Evaporation Pond (EP)
The EP will have a composite liner system comprising 30cm compacted low-permeability (k < 1 x 10-8 m/sec) soil overlain by a 2mm HDPE geomembrane.
Sized to provide for maximum evaporation of the reverse osmosis brine
Waste Treatment Plant
Water
Resource Treatment process will regulate concentration of water to required national Maximum Allowable Concentrations.
Protection
Sludge containing metal hydroxides will be removed and incorporated in the lined WD.
Other
Site-wide Surface Water Management
Clean surface runoff water (precipitation and snowmelt) from upstream catchments will be diverted away in diversion channels and discharged to the River Vorotan. Contact runoff water will be diverted down-gradient to
single-lined collection ponds and/or the WWTP influent equalization basin
Site-wide Dust Management
Water will be sprayed on the haul roads, access tracks and active surfaces. Salt will be utilized during winter months.
Drill rigs will use shrouds and/or water flush.
Flyrock and dust will be minimized by controlled during blasting regime.
Radon Management
All buildings (especially those with confined spaces and dormitories) will include standard radon barriers, as a precautionary y measure. This will include installation of a suitable gas impermeable membrane (e.g. 300
micrometre (1200 gauge) polyethylene sheet, prefabricated welded barriers and self-adhesive bituminous-coated sheet products) and on-going monitoring to access the need for any active radon reduction measures.
178

20.10 Environmental and Social Management System

Lydian is developing a Social and Environmental Management System (ESMS), which
outlines its commitments to environmental and social management, mitigation and
monitoring. At this stage, these are largely existing procedures and broad commitments
which will be updated as the Project moves forward.
The ESMS will ultimately comprise numerous plans and policies for the implementation,
monitoring and reviewing of the environmental, health, safety and community impact
mitigation measures identified in the ESIA and ensure that they are adequately
implemented. Final ESMS plans should be reviewed periodically and updated over the
life of the Amulsar Project. The review should take into consideration internal and
external reviewer and stakeholder comments, any regulatory changes, amendments in
mining operations and any process which will affect the content and scope of the plan in
question.
At present a raft of framework management plans have been prepared to support the
ESIA submission. The objective of a framework plan is to contextualise and objectify
relevant findings from the ESIA in a format which conforms to international best practice
and can be easily adapted and expanded by the Company for practical implementation.
In so doing, the framework plan will form a template for the development of full
operational plans to form part of Lydians ESMS. Those framework plans prepared for
the ESIA are those which are considered priorities for the Amulsar Project and are:
Stakeholder Engagement Plan;
Community Development Plan;
Biodiversity Management Plan;
Dust Management Plan;
Waste Management Plan;
Cyanide Management Plan;
Spill Prevention and Emergency Response Plan;
Acid Rock Drainage Plan;
Water Management Plan; and
Mine Closure and Rehabilitation Plan;
In addition, the Influx Management Plan, Livelihood Restoration Plan and Cultural
heritage Plan will be developed prior to the commencement of development.
Lydian will develop a framework Occupational Health and Safety (OHS) management
plan, which outlines its main policies and intentions at this stage, in line with the
requirements of IFC Performance Standard 2 on Labour and Working Conditions. This
aims to protect health, wellbeing and safety of the workers. Lydian will also develop
other ancillary management plans, such as a Contractor Management Plan, prior to
construction.
179

20.11 Environmental and Social Monitoring Plan

Lydian will build on the existing environmental and social baseline monitoring
programme via the introduction of targeted and refined monitoring regimes for the
construction, operation, closure and post-closure mine phases. This will initially be
achieved via the preparation of a framework Environmental and Social Monitoring Plan
(ESMP). The purpose of this plan chapter is to outline the key on-going monitoring
requirements identified by the ESIA process to evaluate the environmental and social
performance of the Project.
The overall objectives of the monitoring plan activities are to:
Ensure regulatory requirements are met;
Check that impacts do not exceed Project, national and international standards
thresholds;
Verify predictions made in the ESIA by obtaining real time measurements;
Verify that mitigation measures are effective and implemented properly;
Identify, track and provide early warning of potential environmental impacts;
Regulate process efficiency of mining activities;
Inform future operations; and
Contribute to continuous improvement of Project E&S management.
Mitigation and management measures outside of design controls will be incorporated

into Lydians operational Environmental and Social Management System (ESMS)
20.12 Reclamation, Closure and Rehabilitation
For a mining project to leave a positive contribution to the sustainable development of a
community or region, closure objectives and impacts must be considered from Project
inception. Closure and reclamation goals include:
Future public health and safety are not compromised;
Any residual environmental impacts are minimized and that environmental

resources will not be subjected to related physical and chemical deterioration over
the long term;
After-use of the site is beneficial and sustainable in the long term and acceptable
to the mine owners, the local communities and the regulatory authorities;
Any adverse impacts on the local communities are minimised;
All socio-economic benefits are maximised; and
Closure and rehabilitation will be fully funded without recourse to the public purse.
180

In accordance with international best practice for the mining industry and the
environmental policy of Lydian, a framework Mine Closure and Rehabilitation Plan
(fMCRP) has been developed for the Amulsar site as part of ESIA phase of the Project.
Detailed closure and rehabilitation costs including, engineering planning and
environmental monitoring have been developed by Golder (Golder, 2012h). A summary
of these costs are included in Chapter 21.0.
20.13 Planned Future Work
A program of planned future work (an Environmental and Social Action Plan) with
recommended timelines has been developed, to classify aspects identified in the ESIA
which will need further development. This action plan deals with the recruitment of
Health, Safety, Environment and Community Management Personnel, in tandem with
the development and expansion of environmental, health, safety and social policies,
plans and procedures, designed to enable operations at Amulsar to be undertaken in
line with both RoA requirements and international best practice guidance. For the
development of the Amulsar Project, Lydian International and its subsidiary Geoteam
will consider the following activities:
Building local capacity to launch initiatives that benefit both the company
employees and the local communities and locally hired employees.
Developing and disseminating good international practices with Armenian

contractors working during construction and operation.
Facilitating community engagement throughout the life of the Amulsar project;
Promoting and encouraging participatory planning and monitoring for community

development.
Working with local entrepreneurs to identify the business case for investing in the
communities around the mine.
Increasing participation of local businesses in the supply chain through use of

local/affected community resources.
In addition Geoteam will work with the Government of Armenia and international
organizations such as IFC, EBRD and other organizations with respective expertise
(Counterpart International, other implementing partners that work with Geoteam) on:
Building local government capacity to manage tax/royalty payments to improve

community welfare;
Ensure transparent accountability/reporting by local governments on tax/royalty

payments and funds allocated for social programs;
Support civil society organizations to ensure that local governments are

accountable for how they spend tax and social program resources per EITI
approach;
Ensure community contribution for Geoteam-supported social programs.
Finally Geoteam will put a strong emphasis on local procurement in Armenia in order to
secure the purchase of goods and services from local businesses. It will allow the
development of small and medium enterprises (SMEs) giving local communities the
181

chance to participating in new opportunities. These activities also known as business

linkages, local supplier development, local food supply, local content or local sourcing,
local procurement is favored by Lydian International as a strategic business tool.
182

21
CAPITAL AND OPERATING COSTS
The capital cost for mine mobile equipment was developed assuming an owner
operated and purchased fleet.
21.1 Mine Capital Costs
Mine Equipment
The mine equipment capital cost estimate includes the following:
Mine major equipment
Mine support equipment
Initial spare parts and engineering equipment
Table 21.1 is a summary of the mine capital costs, including preproduction development
capital expense. Year -2 reflects the early costs incurred when committing to purchase
the equipment. The costs in Year -1 are, for the most part, the balance of the price of
equipment after it is delivered to the site and commissioned. Year 1 shows the
remainder of the initial capital investment for the mine equipment needed to start mining.
Preproduction development capital shown in Table 21.1 is the operating cost of
constructing access to the initial mining benches and stripping waste rock to expose ore
for mining. Preproduction development capital is discussed in more detail in the next
section.
Table 21.1
Summary of Mine Capital Costs ($US x 1000)

Initial Capital
Category
Yr1
Q3-4
Total
Sustaining
Capital
Total
Capital
46,414
35,023
78,577
2,949
5,743
Year -2
Year -1
PP Q1
Major Equipment
3,034
25,296
5,076
Support Equipment
133
1,064
1,527
70
2,794
10,148
Engineering/Safety Equipment
200
200
200
Shop Tools
Spare Parts
1,394
TOTAL
3,167
1,394
27,754
6,803
10,218
50,802
38,172
400
0
1,394
86,114
Note: Physical structures such as the mine shop and warehouse, and fuel storage facilities are included in the
plant/infrastructure capital costs.
Note: Shop tools are carried in the KDE cost estimate
Note: Two initial Cat D10 dozers are not included in capital costs as Lydian has already purchased these machines
183

The following is noted:
The capital costs are shown in second quarter 2012 US dollars.
A contingency was not included in the mine capital costs.
The major mine equipment costs reflect firm quotes from Cat Zeppelin Armenia
and provided by Lydian International. The costs include assembly and freight.
Support equipment costs reflect dealer budget quotes for new equipment. The
quotes were sourced in the US.
Caterpillar equipment will be purchased through a lease arrangement with

payments spread over 5 years. The cost of this lease is detailed as a separate line
item in the financial models. Lease costs are expected to be a 2 percent fee and 7
percent interest. A deposit of 20 percent on all pieces of equipment has been
included in the capital estimate with the residual included as operating cost.
Preproduction Development
Mine preproduction development costs are based on the estimated mine operating costs
during the preproduction period. Pit development is required to expose adequate ore by
the start of commercial production. The pit development capital cost of $3.7 million
includes the following:
Developing access roads from the main haul roads to the pit.
Stripping waste rock to expose sufficient ore to sustain production.
All mine labor, salaried and hourly.
Consumables such as fuel, parts, tires, etc.
An allowance for mine related overheads.
An allowance for general operating expenses in the mine offices.
Blasting supplies and loading of explosives.
All mine functions to deliver material to the dumps or crusher.
Material quantities (ore and waste material) were calculated based on the mine plan
developed by IMC. The quantities are based on phased pit designs scheduled to meet
commercial production requirements. Pit development costs are based primarily on
operating and maintenance costs for equipment and for the labor conducting the work.
Additional costs include the cost of drilling and the supply and initiation of explosives
materials for blasting. All inputs and assumptions for the preproduction development
costs are the same as those listed in the next section; Mine Operating Costs.
21.2 Mine Operating Costs
Operating costs for the mine include all the parts, consumables (fuel, explosives, oils
and lubricants), and labor costs associated with mine supervision, operation, and
maintenance. The IMC operating cost estimate is a first principles calculation based on
the scheduled equipment working shifts, the labor work schedule, number of personnel,
and labor rates. Table 21.2 lists the mine operating costs by category.
184

The mine operating costs include:
All mine labor, salaried and hourly
Consumables, fuel, parts, tires, etc.
An allowance for mine related overheads.
An allowance for general operating expenses in the mine offices.
Blasting supplies and loading of explosives.
All mine functions to deliver material to the dumps or crusher.
Development and maintenance of mine haul roads where haul trucks travel.
The following factors form the basis for the operating cost calculations:
Local unit costs for consumable items such as diesel fuel, lubricants, and tires.
Local salary and hourly labor rates, including benefits, were used. The rates were
provided by Lydian International.
Hourly operating personnel were determined based on the mine equipment

requirements for the pit development plan.
Salaried employees were based on engineering and supervisory personnel

needed to operate the mine.
Costs for spare parts were based on estimates found in Mine and Mill Equipment
Costs, An Estimators Guide published by InfoMine USA.
General operating supplies for the mine and engineering department, and supplies to
maintain and operate maintenance support equipment are covered by a US$ 0.02 per
total tonne allowance. The allowance is applied to the general mine cost center and
again to the general maintenance cost center.
Mining operating costs are heavily dependent on haul distance and significant cost
savings are realized in the latter years of the mine life through in pit dumping of waste
from Erato pit into the Tigranes / Artavasdes pit. This reduces the amount of trucks
required to meet production targets which leads to a smaller workforce reducing labor
costs as well as reduced maintenance costs due to a smaller truck fleet.
185

Table 21.2
Mining
Year
-1
Summary of Mine Operating Costs - Total Dollars ($US x 1000)

Total
Material
Drilled/ Blasted (kt)
Drilling
Blasting
Loading
Hauling
General
General
Mine
Maint.
59
Auxiliary
(kt)
G&A
TOTAL
145
210
Cost/ Tonne of Total Mat'l
0.000
Yr1
10,449
10,064
1,337
3,039
1,785
7,883
2,937
1,362
994
3,942
23,278
2.228
Yr2
15,127
14,472
1,920
4,333
2,598
11,163
3,448
1,708
1,138
4,094
30,401
2.010
Yr3
15,193
15,193
2,012
4,544
2,607
12,360
3,341
1,723
1,147
4,210
31,945
2.103
yr4
33,466
33,466
4,415
9,910
5,732
24,201
3,608
3,112
1,925
4,385
57,287
1.712
yr5
33,500
33,500
4,418
9,920
5,736
24,429
3,607
3,113
1,926
4,386
57,535
1.717
yr6
33,500
33,500
4,417
9,920
5,736
24,529
3,607
3,113
1,926
4,388
57,635
1.720
yr7
33,500
33,500
4,418
9,920
5,736
24,542
3,502
3,113
1,926
4,388
57,544
1.718
yr8
33,500
33,500
4,416
9,920
5,735
22,321
3,501
3,113
1,905
4,361
55,272
1.650
yr9
33,500
33,500
4,417
9,920
5,736
16,257
3,502
3,113
1,858
4,294
49,098
1.466
yr10
33,959
33,500
4,418
9,920
5,827
15,661
3,269
3,061
1,863
4,290
48,309
1.423
yr11
30,433
30,433
4,025
9,019
5,218
15,751
2,728
2,993
1,783
4,049
45,567
1.497
yr12
9,119
948
126
278
1,562
3,402
654
341
416
939
7,717
0.846
315,246
305,576
40,338
90,641
54,009
202,499
37,763
29,865
18,813
47,870
521,797
1.655
7.7%
17.4%
10.4%
38.8%
7.2%
5.7%
3.6%
9.2%
100.0%
TOTAL
PERCENT
186

21.3 Process Capital Costs

A summary of the crushing, process plant and associated infrastructure initial and
sustaining capital costs is shown in the following Tables 21.3 and 21.4 respectively.
These tables include direct costs, indirect costs, and a contingency. That the capital
costs estimate does not include sunk costs such as drilling, metallurgical testwork, prior
studies undertaken to date.
187

Table 21.3
Summary Process Plant Initial Capital Cost

Description
Total Cost, US$
DIRECT COSTS
Area 00 General Site Area
21,837,718
Area 10 Primary Crushing
9,292,897
Area 13 Secondary Crushing
17,718,611
Area 15 Tertiary Crushing
21,353,411
Area 17 Product Storage
8,856,745
Area 19 Ore Stacking
43,741,582
Area 20 Heap Leach
2,565,469
ADR Plant
12,056,620
Area 30 Solution Management
3,321,685
Area 90 Auxiliary Equipment
2,563,015
Infrastructure
Buildings / Camp
8,080,563
Access Roads & Bridge
6,350,000
Power Supply by Utility
2,160,000
Main Substation (Crushing Plant)
2,698,460
Power Distribution
1,625,260
Water Distribution
250,000
SUB-TOTAL DIRECT
164,472,036
INDIRECT COSTS
Engineering
8,377,550
Procurement
2,330,000
Construction Management
5,487,600
Construction Indirect Costs include:
541,952
Field Office Expense

Training
Startup
Initial Fill & Reagents
2,467,100
Spare Parts
8,223,600
Owners Cost
5,000,000
Mobile Equipment
1,855,000
SUB-TOTAL INDIRECT
34,282,802
TOTAL DIRECT AND INDIRECT
198,754,838
Contingency 15%
29,813,226
TOTAL
228,568,063
188

Table 21.4
Summary Process Plant Sustaining Capital Cost
Description
Total Cost
DIRECT COSTS
Area 10 Primary Crushing
3,701,334
Area 13 Secondary Crushing
5,299,245
Area 15 Tertiary Crushing
6,073,276
Area 17 Product Storage
Area 19 Ore Stacking
Area 20 Heap Leach
861,873
ADR Plant
1,858,778
Area 30 Solution Management
1,308,870
Area 90 Auxiliary Equipment
SUB-TOTAL DIRECT
19,103,376
INDIRECT COSTS
Engineering
Procurement
350,000
2,150,100
Construction Indirect Costs incl:
40,002
Field Office Expense
Training
Startup
Initial Fill & Reagents
Spare Parts
723,700
Owners Cost
1,000,000
Mobile Equipment
SUB-TOTAL INDIRECT
4,263,802
TOTAL DIRECT AND INDIRECT
23,367,178
Contingency - 15%
3,505,077
TOTAL
26,872,254
189

21.3.1
Direct Costs
The direct capital costs were based on the following documents:
Design Criteria
Equipment List
Budget Quotations for major equipment
K D Engineering Equipment Database for minor equipment and material
Discussions with the Armenian electrical power company for unit costs to deliver
power from the nearest available source.
Local material and labor rates provided by client
Engineering Drawings performed by KDE: Flowsheet, General Arrangement, Civil,

and Electrical
The direct costs exhibited in this estimate include infrastructure, buildings, materials and
equipment and the associated installation labor for the detailed construction activities set
forth below:
Equipment Costs
An equipment list was developed and incorporated into the cost estimate. The estimate
for equipment was developed from the following sources:
Written or e-mailed budgetary estimates from vendors for major equipment.
KDE Historical data and budget costs from similar projects for miscellaneous
equipment or material.
The cost of installing the equipment and materials were based on the estimated
manpower for each piece of equipment.
Direct Labor Rates
The craft base wages prepared for the Amulsar project are based on labor surveys
conducted in Yerevan, Armenia with several major Armenian contractors. The labor
rates used in the cost estimate are composite rates and they are considered as all
inclusive for the Amulsar project. The contractor has included costs for a separate
construction camp on the project site to house and feed his construction team. To
account for the lower productivity a multiplier of two (2) was used for the labor man-hour
cost. To account for skilled labor, such as mill rights, welders and pipe fitters, a multiplier
of two (2) was used. The total average built up labor rate including the productivity and
unskilled labor multipliers utilized in the cost estimate are shown below:
190

Total Average Labor Rate including consumable materials
$10.50
Construction Labor Factor multiplier of 2 was used
$21.00
Productivity Factor multiplier of 2 was used
$42.00
Total Average built-up Labor Rate in cost estimate
$42.00
Currency
The basis for the capital cost estimate pricing was second quarter (Q2) 2012 costs. All
estimated costs were expressed in United States Dollars (US$). The foreign currency
exchange rate that was used for the report is $AMD 389 equals US$ 1.
Units of Measure
Metric units were used throughout the estimate, with some exceptions such as conveyor
widths and piping which assumes nominal sizing.
Site Development
Currently the site is undeveloped except for a small exploration camp and minimal roads
for the exploration drills and mobile equipment. The Project will require development at
the following major locations:
The mining areas including a truck shop and haul roads for ore and waste.
Waste dump and associated water treatment plant
Three stage crushing and screening plant area
Overland conveyor and stacker from crushing plant to leach pad
ADR Process plant area and engineering, administration offices, shops,

warehouse and owners camp.
Leach pad, solution management system and ponds.
Infrastructure including electrical power, fresh water and access roads to the
project site.
Capital costs associated with the development of the waste dump and heap leach
facility are presented in the design reports by Golder (July and August, 2012). In
addition, both capital and operating costs for the wastewater treatment plant are
also presented in the design report by Golder (July, 2012).
Site Preparation and Earthwork

The terrain is mountainous and fairly steep in some areas of construction. Access roads
are primitive and will need to be further developed to develop the mine property. The soil
in this area is not adequate for major foundations without performing over-excavation
and structural backfill to develop a working surface to install major concrete foundations.
A preliminary geotechnical report was prepared by Golder (Golder, 2012a) and an
additional geotechnical investigation and program is underway to support the detailed
191

engineering design and will be completed prior to designing equipment foundations.

Excavation and back fill for overland conveyor will also be required for the project and
will be finalized during the detail engineering effort.
Owners Camp
Geoteam will install a man camp adjacent to the Process plant area which will house
200 people. The cost of a new standalone Owners camp and dining facility was included
in the capital cost estimate. Additional housing will be provided in nearby towns as
required for the project. KDE recommended that a local engineering company be utilized
to assure local codes are considered.
Concrete
Concrete work is detailed in the capital cost estimate with the volumes taken off the
general arrangement drawings. There is a total of 20,000 cubic meters of concrete
required for the total project at a cost of approximately US$ 150 per cubic meter
installed. This was based on discussions with contractors and a budgetary proposal
provided by Horizon-95, a local Armenian contractor. An additional allowance to meet
the particular specifications they will be required to meet compared to similar projects
they have performed. This will require on-site batch plants and certified aggregate and
sand.
Structural Steel
Structural and miscellaneous steel was estimated based on the weight and man-hours
required to fabricate. Unit pricing of US$ 4,000 per metric tonne was developed from
local Armenian contractors and steel fabricators located in Yerevan, Armenia. This cost
is inclusive of the steel fabrication and steel erection. After review of the local fabrication
shops it appears they have adequate facilities to fabricate the approximately 4,000
metric tonnes of structural steel required for this project.
Mechanical Equipment
The equipment in the flowsheet and associated equipment list was the basis of the
equipment included in the capital cost estimate. The unit cost to install this equipment
was estimated for each line item in the detailed equipment list. Items such as steel tanks
or chute work were developed based on estimated weights times the unit costs
discussed with steel fabricators. Corrosive liquids will be minimal on this project and
therefore steel coatings were based on similar facilities.
Material Handling (Overland Conveyor System)
Conveyor equipment duty specifications were prepared and sent to conveyor
design/build suppliers. Paakkola was selected and has provided basic engineering and
an associated cost estimate for the conveyor system. In addition Paakkola has provided
volumes for cut and fill for this conveyor routing option. KDE has reviewed this proposal
and recommended to revise the routing at the beginning of this conveyor to reduce the
slope of the conveyor and has added an allowance for additional transfer towers in the
192

cost estimate. This will be the basis for a request for quotation to additional conveyor
vendors at the detail engineering level.
Piping
P&IDs were prepared which defined the piping size and identified all major and
overland piping required for the project. These pipelines were estimated based on length
and unit pricing for similar projects.
Construction Equipment
After review of the available construction rental equipment available locally it was
decided that an additional search is required to determine if there is adequate rental
equipment available in country for this project. It may be necessary to bring in additional
construction equipment for this project. During the meeting with contractors in Yerevan
and reviewing their construction equipment at job sites and their equipment yards it was
decided to increase the allowance in the cost estimate to include some out of country
equipment.
Raw, Potable and Process Water
Raw, potable, and process water is discussed in detail in Section 18 of this report. Water
will be sourced from a sump adjacent to the Vorotan River and will be pumped to a fresh
water tank near the process plant. From there it will be distributed throughout the mine
site as required. Minimal potable water is required for this project and it will either be
purchased or a small potable water system will be installed.
Electrical and Instrumentation
Electrical power supply work consists of installing a 12 km, double circuit 110 kV
transmission line (as a primary source) and a 12 km, single circuit 35 kV line (as a
backup source, for emergency situation only). Electrical on-site distribution work
consists of a main substation that includes two transformers stepping down the utility
voltage (110 kV and 35kV) to 6 kV for power distribution via a 6 kV rated switchgear.
Power is distributed, by means of overhead pole-lines to the crushing plant, overland
conveying & stacking, process plant, solution management pumping, water supply &
water treatment plant, administrative offices, mine shops, exploration camp and man
camp.
Site distribution includes overhead power-line, step-down transformers, electrical
switchgear and motor control centers, grounding, lightning protection, cable tray,
supports, wire and cable, terminations, plant and site lighting, back-up power systems,
and other miscellaneous electrical controls, components, equipment, and systems.
Refer to Sections 18.1.7 and 18.1.8 for details on power supply, power distribution and
power requirements.
Electrical material take-offs were based on process equipment list and electrical single
line diagrams. Equipment costs, bulk material pricing and labor costs were determined
using K D Engineerings historical database and recent projects.
193

Instrumentation work consists of mine site instruments and programmable logic control
(PLC) system, instrument supports, cables, terminations, telecommunication systems,
installation of site instruments and interconnection from field devices to PLC. Software
development and testing is included in the PLC package.
Quantities and pricing of instruments and control devices have been estimated using K
D Engineerings historical database and recent projects. Ancillary items (field wire,
tubing, connectors, fittings, junction boxes, minor supports, fasteners) were quantified
based on factored values.
Freight
Freight costs were estimated using a seven percent (7%) factor of the plant equipment
costs.
21.3.2
Indirect Costs
Indirect costs required in this estimate include the following items in the capital cost:
EPCM was based on actual quotations for the detail engineering portion of the
project. KDE and Samuels Engineering have provided a detailed estimate for this
portion of the project and these numbers are included in the cost estimate. This
effort includes the following:
-
Detailed Engineering
Procurement
Construction Camp and associated dining facility was included in the built up
labor rate and therefore was not included as a separate item in the indirect costs.
The Owners man-camp was included in the direct costs.
Field Office Expenses during the construction phase of the project will utilize the
engineering and administration offices so additional temporary facilities will not be
required. This will however move the capital expense up for these buildings.
Training and Startup was included in the capital cost and was estimated based
on having 2 process/training engineers on site for an 8 week period. 34 weeks of
Vendor services were included in the engineering effort.
Initial Fill & Reagents costs were estimated using a one and half percent (1.5%)
factor of the installed plant equipment costs.
Spare parts costs were estimated using a five percent (5%) factor of the installed
plant equipment cost.
Owners Costs were included in the estimate and were provided by the Owner.
An allowance of US$ 5 Million dollars was included.
Mobile Equipment was included in the indirect costs. Twenty pickup trucks were
included along with ten large vans, two forklifts, two cranes and an ambulance.
194

21.3.3
Contingency and Accuracy
The KDE crushing and process plant portion of the cost estimate includes a 15 percent
contingency for project unknowns and identified risks. Contingency is a necessary part
of the cost estimate and KDE utilized 15 percent based on the fact that less than 10
percent of the engineering is completed to date. KDE believes the estimated
contingency amount will be spent during the life of the project for identified risks and
unknown items.
KDE has not performed a statistical analysis of the crushing plant and process plant
accuracy of the capital cost estimate. KDE believes, based on previous experience with
similar projects, there is a high confidence that the accuracy of the process portion of
the FS capital cost estimate will end up between -10 percent and +15 percent of the
KDE capital cost estimate.
21.3.4
Exclusions
KDE has excluded the following items from the process plant estimate and they are
included elsewhere:
Permits, royalties and licenses
Environmental testing and monitoring
Metallurgical testing
Escalation and Insurances
Taxes, duty and import fees
Reclamation costs which are included in the Preliminary C&R Plan by Golder
(July, 2012)
Allowance for design growth or specification changes
21.4 Process Operating Costs

Annual and unit process operating cost estimates for Phase I (5 million tonnes per year)
and Phase II (10 million tonnes per year) process operation are summarized in Table
21.5.
195

Table 21.5
Process Plant Operating Cost Estimate Summary

Phase I (5 Mtpa)
Cost
Centre
Annual Cost
(US$)
Phase II (10 Mtpa)
Unit Cost
(US$)/tonne
Ore Treated
Cum
Unit Cost
(US$)/tonne
Ore Treated
Annual
Cost (US$)
Unit Cost
(US$)/tonne
Ore Treated
Cum
Unit Cost (US$)/tonne
Ore Treated
Yerevan
Administration Labour
1,946,743
0.39
0.39
1,946,743
0.19
0.19
Site Labour
2,058,495
0.41
0.80
2,058,495
0.21
0.40
Plant Labour
2,518,302
0.50
1.30
2,906,456
0.29
0.69
Plant Consumables
7,552,827
1.51
2.82
14,705,654
1.47
2.16
Power & Energy
3,973,892
0.80
3.61
4,960,780
0.55
2.71
Mechanical
4,094,810
0.82
4.43
4,823,883
0.48
3.19
47,925
0.01
4.44
95,850
0.01
3.20
USD
4,005,238
0.81
4,005,238
0.41
PROCESS USD
18,187,756
3.63
27,492,623
2.80
TOTAL
22,192,995
4.44
31,497,862
3.20
Water
G&A
USD
USD/t
USD/t
Unit Cost Gold Ounces Produced
173
USD/oz
122
USD/oz
Net Gold Cash Revenue
1,027
USD/oz
1,078
USD/oz
196

Reagent cost estimates are shown in Table 21.6. The reagent consumption rates are
based on metallurgical testwork and on similar projects.
197

Table 21.6
Operating Cost Estimate - Heap Leach Consumables

Phase I (5 Mtpa)
Section
Installed Power
Powe
Deman
r kW
d kW
Phase II (10 Mtpa)
Annual
Cost
(US$)
kWh/t
Installed
Powe
r kW
Power
Deman
d kW
Annual
Cost
(US$)
kWh/t
Area 10 - Primary Crushing
614
461
140,709
0.5628
1,019
764
231,269
0.4625
Area 13 - Secondary Crushing
2,018
1,670
531,592
2.1264
2,145
1,743
554,895
1.1098
Area 15 - Tertiary Crushing
1,847
1,624
518,856
2.0754
3,182
2,864
915,132
1.8303
Area 17 - Lime Addition
210
157
50,216
0.2009
210
157
50,216
0.1004
Area 19 - Ore Stacking
4,970
3,728
1,556,157
6.2246
4,970
3,728
1,556,157
3.1123
Area 20 - Heap Leach
2,163
1,097
457,817
1.8313
4,252
2,193
915,634
1.8313
Area 1 - Carbon Adsorption
338
0.0014
578
0.0012
Area 2 - Acid Wash
1,859
0.0074
1,859
0.0037
Area 3 - Carbon Strip
240
0.0010
240
0.0005
Area 4 - Strip Solution Handling
386
285
118,611
0.4744
386
285
118,611
0.2372
Area 5 - EW & Refining
185
139
40,364
0.1615
245
183
59,056
0.1181
Area 6 - Carbon Regeneration & Handling
149
112
45,935
0.1837
149
112
45,935
0.0919
Area 7 Reagent Mix / Storage
14
3,748
0.0150
14
3,748
0.0075
1,848
1,224
507,451
2.0438
3,640
2,433
507,451
2.0314
Area 30 Barren Solution Pumping

Area 90 - Auxiliary Equipment
Total Heap Lech Power Cost (per annum)
3,973,892
Power Consumption
Cost per Tonne Ore
4,960,780
15.91
0.80
10.94
0.55
198

Wear material cost estimates are provided in Table 21.7.

Table 21.7
Maintenance
Tonnage
5 Mtpa
Total Equipment Installed Cost, US$
10 Mtpa
81,896,207
96,477,659
Source of Information
Capital Cost Estimate
Maintenance Percentage, %
5.00
5.00
Other Projects
Annual Maintenance Cost, US$
4,094,810
4,823,883
Calculated
Cost per Tonne, US$/t
0.82
0.48
Calculated
The process water cost estimate, shown in Table 21.8, is based on the calculated
consumption and the delivered water price of $0.05 per tonne.
Table 21.8
Water
Tonnage
Tonnes water per tonne ore

Cost, US$ per tonne water
5 Mtpa
10 Mtpa
0.1917
0.1917
0.05
Annual Maintenance Cost
47,925
Cost per Tonne, US$/t
0.01
0.05
95,850
0.01
21.5 Waste Dump Facility Capital Costs

Initial and sustained capital costs for construction of the Waste Dump Facility are
Table 21.9
Waste Dump Facility Cost Estimate, US$
Description
Year -1
Year 2
Year 3
Year 5
Total
Earthwork
8,797,041
3,440,942
3,634,038
2,561,569
18,423,589
Geosynthetics
2,438,279
340,682
77,729
75,118
2,931,807
Pipework
1,126,758
390,042
186,900
130,986
1,834,686
111,000
16,000
127,000
Miscellaneous
Total Material and Labor
12,463,077
4,171,166
3,914,667
2,767,673
23,317,083
373,892
125,150
39,147
27,677
565,866
Construction QA/QC
623,154
208,583
195,733
138,384
1,165,854
3,115,769
1,042,917
978,667
691,918
5,829,271
16,575,893
5,548,316
5,128,213
3,625,651
30,878,074
Contingency
Total
199

21.6 Heap Leach Facility Capital Costs

Initial and sustained capital costs for construction of the Heap Leach Facility are
Table 21.10
Heap Leach Facility Cost Estimate, US$
Description
Year -1
Year 1
Year 3
Year 6
Total
Earthwork
$9,299,830
$2,966,005
$5,723,198
$5,566,826
$23,555,859
Geosynthetics
$2,717,551
$1,634,014
$3,196,464
$3,212,211
$10,760,239
$337,468
$122,644
$1,615,046
$934,501
$3,009,658
Miscellaneous
$55,600
$0
$42,800
$41,800
$140,200
Total Material and Labour
$12,410,449
$4,722,662
$10,577,507
$9,755,337
$37,465,956
$372,313
$141,680
$105,775
$97,553
$717,322
Construction QA/QC
$620,522
$236,133
$528,875
$487,767
$1,873,298
$1,817,572
$733,954
$1,422,833
$1,384,489
$5,358,848
$263,499
$728,146
$628,277
$2,086,514
$6,097,928
$13,363,137
$12,353,423
$47,501,938
Pipework
Earthwork Construction
Contingency
Geosynthetics, Pipework
and Misc. Construction
Contingency
Total
$466,593
$15,687,450
21.7 Wastewater Treatment Plant Operating and Capital Costs

TThe Wastewater Treatment Plant (WWTP) capital and operating cost (CAPEX and
OPEX) estimates are summarized in Table 21.11. The feasibility design and cost
estimates were based on achieving compliance with RoA MAC Category II standards at
the point of discharge. On August 28, 2012, Lydian was informed by regulatory officials
that WWTP treated effluent quality can likely include an allowance for a mixing zone with
the point of compliance being 500 m downstream of the discharge point. Golders
preliminary assessment of the impact of this anticipated change in the regulatory point of
compliance is that construction and operation of the water treatment plant could likely be
deferred for a minimum of one year. Due to this late notification in the interpretation of
regulatory compliance and the associated impact on the design criteria, a revised
WWTP design will need to be developed during detailed engineering. Pending results of
further evaluation, the revised WWTP design may be simplified to either eliminate
advanced treatment operations (reverse osmosis and ion exchange) or provide
advanced treatment to be used only on an as needed basis. Secondary waste (reverse
osmosis brine and ion exchange regenerant) handling via enhanced evaporation may
also be reduced or eliminated. CAPEX and OPEX estimates are expected to be reduced
as a direct result of the reduction of the WWTP treatment process requirements. The
design of the Influent Effluent Basin is also expected to require modifications that may
include separate internal ponds and a system to provide for monitoring prior to
discharge.
200

Table 21.11
Wastewater Treatment Plant Cost Estimates

Year
Capital Cost
US$
Operating Cost
US$
19,078,412
1,116,000
1,116,000
1,116,000
1,116,000
1,116,000
1,116,000
1,116,000
1,116,000
1,116,000
10
1,116,000
11
1,116,000
Total
19,078,412
12,276,000
21.8 Closure and Reclamation Cost Estimate

Costs for closure and reclamation have been developed and the following schedule
prepared assuming that closure and reclamation will commence in project year 13 and
concurrent reclamation throughout the life of mine have not been evaluated in detail at
the feasibility level. The cost estimate is summarized in Table 21.12.
Table 21.12
Closure and Reclamation Cost Estimate

Year
13
14
15
Operating Cost
US$
17,891,17
4
12,519,45
9
3,364,913
16
259,969
17
259,969
18
382,765
19
210,851
20
210,851
21
210,851
22
210,851
23
210,859
24
1,488,966
Total
37,221,47
7
201

21.9 Newmont Agreement (Royalty)

The cash flow model presented in Section 22 includes payments to Newmont as
described in Section 4.
21.9.1
Working Capital
Working capital has been estimated for the project to reflect deficiencies in cash flow to
cover operating expenses due to the delay between mining ore and receiving payment
for bullion. This capital is shown in the Section 22 cash flow model but is not included in
the financial analysis calculations. At the end of the project the working capital sums to
zero.
202

22
ECONOMIC ANALYSIS
A pre-income tax economic analysis model was prepared. The model uses the
production and cost estimates shown earlier in this report. Costs are in 2012 constant
dollars. The economic analysis uses a gold sales price US$ 1,200 per ounce and a
silver sales price of US$ 20.00 per ounce and plant estimated recoveries of 88.64
percent for gold for all PMM grades processed and 36.89 percent for silver based on a
nominal average grade. Operating cost estimates and values for key design parameters
that have been presented in previous sections of the FS were used as required. The
economic analysis was done on an all equity financing basis.
22.1 Owner Operating Mining Case
Table 22.1 shows the project's pre-income tax internal rate of return and the project's
pre-income tax net present values at discount rates from 0 to 20 percent.
Table 22.1
Owner Operated Mining Economic Analysis Summary

Internal Rate of Return (IRR), %
27.7
Net Present Values
US$ x 1000
@ 0 % discount rate
1,121,616
@ 5 % discount rate
645,976
@ 10 % discount rate
366,765
197,649
92,454
Table 22.2 summarizes the project's revenue, costs and pre-income tax cash flow and
also shows the values in units of resource processed and saleable gold ounces.
203

Table 22.2
Owner Operated Mining Economic Analysis Summary - Before Tax

Cash Flow and Unit Values
$US x 1000
$US/t
Resource
$US/oz
Gold
Mine Gate Value of All Resource et of Transportation and

Refining
2,424,680
25.55
1,194.75
Mining Operating Cost
(596,959)
(6.29)
(294.15)
Processing Cost
(277,116)
(2.92)
(136.55)
(12,276)
(0.13)
(6.05)
(44,407)
(0.47)
(21.88)
Royalties (Newmont Payment)
(20,000)
(0.21)
(9.85)
Cash Operating Cost
(950,757)
(10.02)
(468.48)
Cash Operating Cash Flow
1,473,923
15.53
726.27
Capital Cost including Pre-Production Development
(416,102)
(4.38)
(205.03)
1,057,821
11.15
521.24
Table 22.3 shows the economic analysis for this FS study.
204

Table 22.3
Cash Flow Schedule

Year
-2
TOTAL OPEN PIT
TOTAL RESOURCE
PROCESSED
TOTAL RECOVERY
TOTAL METAL
RECOVERABLE
Resources Mined
Year
-1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year
13
Year
14
Year
15
Year
16
Year
17
Year
18
Year
19
Year
20
Year
21
Year
22
Year
23
Year
24
Total
tonnes
3,750,000
5,655,120
5,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
9,541,000
10,000,000
948,000
94,894,120
Gold
g/t
0.915
0.966
0.957
0.730
0.812
0.870
0.639
0.658
0.549
0.562
0.815
1.508
0.750
Silver
g/t
2.12
3.16
5.02
4.85
3.76
3.94
3.43
3.00
2.27
2.14
2.35
3.20
3.27
Waste
tonnes
6,314,000
9,471,880
10,193,000
23,466,000
23,500,000
23,500,000
23,500,000
23,500,000
23,500,000
23,959,000
20,433,000
375,000
211,711,880
Total Mined
tonnes
10,064,000
15,127,000
15,193,000
33,466,000
33,500,000
33,500,000
33,500,000
33,500,000
33,500,000
33,500,000
30,433,000
1,323,000
306,606,000
Resources Processed
tonnes
3,750,000
5,000,000
5,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
10,000,000
1,144,120
94,894,120
Gold
g/t
0.915
1.046
0.957
0.730
0.812
0.870
0.639
0.658
0.549
0.553
0.815
1.310
0.750
Silver
g/t
2.12
3.27
5.02
4.85
3.76
3.94
3.43
3.00
2.27
2.15
2.35
3.05
3.27
Gold Recovery
88.08%
87.95%
87.55%
86.30%
86.35%
86.47%
87.71%
87.92%
89.87%
92.45%
93.72%
93.44%
88.64%
Silver Recovery
30.40%
30.59%
31.18%
31.82%
31.76%
31.64%
34.76%
33.96%
44.03%
54.26%
58.51%
54.93%
36.89%
Gold Recoverable
ounces
97,217
147,858
134,631
202,544
225,502
241,967
180,275
185,958
158,656
164,249
245,558
45,032
2,029,446
Silver Recoverable
ounces
77,656
160,632
251,431
495,977
384,109
400,445
383,822
327,272
320,700
375,437
441,372
61,622
3,680,475
0.8
1.1
1.9
2.4
1.7
1.7
2.1
1.8
2.0
2.3
1.8
1.4
1.8
Silver/Gold Ratio
Cumulative
Recoverable Gold
ounces
97,217
245,075
379,706
582,250
807,752
1,049,718
1,229,993
1,415,951
1,574,606
1,738,855
1,984,413
2,029,446
Cumulative
Recoverable Silver
ounces
77,656
238,289
489,719
985,696
1,369,805
1,770,250
2,154,072
2,481,343
2,802,044
3,177,481
3,618,853
3,680,475
Initial Year Percent of

Recoverable
Metal
Recovery Factor
85.00
81.67
81.67
80.00
78.33
79.17
80.83
75.83
75.83
76.67
75.83
100.00
Second Year Percent of

Recoverable
Metal
Recovery Factor
15.00
18.33
18.33
20.00
21.67
20.83
19.17
24.17
24.17
23.33
24.17
24.17
Gold Recovered
ounces
82,634
135,333
137,056
186,717
217,152
240,416
196,132
175,571
165,254
164,266
224,540
104,375
2,029,446
Silver Recovered
ounces
66,008
142,832
234,784
442,877
400,081
400,242
393,682
321,747
322,288
365,338
422,309
168,287
3,680,475
205

Year -2
Year -1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Revenue
COMMODITY PRICES
Gold
Silver
$/ounce
$/ounce
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
1,200.00
20.00
GROSS SALES
Gold
Silver
$
$
99,161,343
1,320,157
162,399,797
2,856,632
164,467,187
4,695,686
224,060,998
8,857,539
260,582,057
8,001,618
288,498,818
8,004,847
235,358,102
7,873,638
210,684,611
6,434,937
198,304,530
6,445,768
197,119,182
7,306,759
269,447,583
8,446,182
125,250,458
3,365,743
REFINING & TRANSPORTATION
Gold
$
$/ounce
$
$/ounce
(433,831)
(5.25)
(48,895)
(0.74)
(710,499)
(5.25)
(105,801)
(0.74)
(719,544)
(5.25)
(173,914)
(0.74)
(980,267)
(5.25)
(328,057)
(0.74)
(1,140,047)
(5.25)
(296,356)
(0.74)
(1,262,182)
(5.25)
(296,476)
(0.74)
(1,029,692)
(5.25)
(291,616)
(0.74)
(921,745)
(5.25)
(238,331)
(0.74)
(867,582)
(5.25)
(238,732)
(0.74)
(862,396)
(5.25)
(270,621)
(0.74)
(1,178,833)
(5.25)
(312,822)
(0.74)
(547,971)
(5.25)
(124,657)
(0.74)
Silver
PAYABLES
Gold
Silver
%
%
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
100.00
90.00
NET REVENUE
Gold
$
$/ounce
$
$/ounce
$
98,727,512
99,871,648
161,689,298
1,194.75
2,475,748
17.33
164,165,045
163,747,643
1,194.75
4,069,595
17.33
167,817,238
223,080,731
1,194.75
7,676,534
17.33
230,757,265
259,442,011
1,194.75
6,934,735
17.33
266,376,746
287,236,636
1,194.75
6,937,534
17.33
294,174,171
234,328,411
1,194.75
6,823,820
17.33
241,152,230
209,762,866
1,194.75
5,576,946
17.33
215,339,812
197,436,948
1,194.75
5,586,332
17.33
203,023,280
196,256,786
1,194.75
6,332,524
17.33
202,589,310
268,268,750
1,194.75
7,320,024
17.33
275,588,774
124,702,487
1,194.75
2,916,977
17.33
127,619,465
23,278,162
6.21
8,444,993
2.25
13,612,500
3.63
30,400,519
6.08
9,084,763
1.82
18,150,000
3.63
31,945,050
6.39
14,842,885
2.97
18,150,000
3.63
57,286,719
5.73
14,249,314
1.42
28,000,000
2.80
57,534,950
5.75
9,310,952
0.93
28,000,000
2.80
57,635,301
5.76
6,397,892
0.64
28,000,000
2.80
57,544,095
5.75
5,947,514
0.59
28,000,000
2.80
55,271,608
5.53
189,391
0.02
28,000,000
2.80
49,097,542
4.91
189,391
0.02
28,000,000
2.80
48,308,680
4.83
189,391
0.02
28,000,000
2.80
45,566,725
4.56
189,391
0.02
28,000,000
2.80
7,717,436
6.75
3,203,537
2.80
1,116,000.00
0.30
3,037,500
0.81
1,116,000.00
0.22
4,050,000
0.81
1,116,000.00
0.22
4,050,000
0.81
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
1,116,000.00
0.11
4,100,000
0.41
469,089
0.41
4,000,000
1.07
53,489,155
4,000,000
0.80
66,801,281
4,000,000
0.80
74,103,935
4,000,000
0.40
108,752,033
4,000,000
0.40
104,061,902
97,249,193
96,707,609
88,676,999
82,502,933
81,714,071
78,972,115
11,390,062
46,382,493
561.30
97,363,764
719.44
93,713,303
683.76
122,005,233
653.42
162,314,844
747.47
196,924,977
819.10
144,444,622
736.47
126,662,813
721.44
120,520,347
729.30
120,875,239
735.85
196,616,659
875.64
116,229,402
1,113.57
Silver
Total Net Revenue
1,144,136
Operating Costs
Mining Cost
$
$/tonne
$
$/tonne
$
$/tonne
Mining Cost Lease

Processing
Waste Water Treatment
Plant
$/tonne
$
$/tonne
Royalties (Newmont
payment)
210,380
593,571
5,531,934
$
$/tonne
$
Total Operating Cost
593,571
5,742,313
(593,571)
(5,742,313)
Operating Profit
Operating Profit
$
$/gold ounce
Capital Costs
Mining Cost - Purchase
Mining Cost - Down
Payment
Process Plant Direct Cost
Process Plant Indirect Cost
& Contingency
Waste Water Treatment
Plant
Leach Pads
Waste Dump
Total Capital Cost
199,000
3,060,500
2,455,000
443,000
2,733,000
65,000
345,000
56,000
1,388,000
8,000
196,000
593,600
4,938,600
2,913,200
639,800
5,758,400
189,400
82,236,018
82,236,018
19,103,376
32,048,014
32,048,014
7,768,879
$
$
$
$
$
19,078,412
15,687,450
16,575,893
6,097,928
5,548,316
13,363,137
5,128,213
115,076,632
154,546,474
(22,767)
$
$/gold ounce
$
12,353,423
30,544,540
6,631,116
53,855,004
65,000
3,970,651
12,409,423
1,577,400
8,000
196,000
(197,486)
8,342,714
6,046,389
111,018
5,118,292
3,794,390
3,089,204
(5,374,600)
(2,333,217)
(1,016,045)
(4,725)
7,543,612
(25,096,780)
(115,670,203)
(160,288,787)
15,837,953
90,732,648
670.44
39,858,299
290.82
121,940,233
653.07
158,344,193
729.19
184,515,554
767.49
142,867,222
728.42
126,654,813
721.39
120,324,347
728.12
120,875,239
735.85
196,616,659
875.64
116,229,402
1,113.57
(115,670,203)
(275,958,991)
(260,121,038)
(169,388,390)
(129,530,092)
(7,589,859)
150,754,334
335,269,888
478,137,110
604,791,923
725,116,270
845,991,509
1,042,608,168
1,158,837,570
3,625,651
Working Capital Costs

Changes to Working
Capital
Cumulative Pre-income Tax
Cash Flow
4.0
Payback, operating years

Pre-Income Net Present Values and Rate of Return
NPV @ 0% discount rate
IRR
$
$
$
$
$
1,121,616,094
645,975,968
366,765,059
197,648,946
92,454,288
27.7%
206

Year 13
Year 14
Year 15
Year 16
Year 17
Year 18
Year 19
Year 20
Year 21
Year 22
Year 23
Year 24
Total
Revenue
COMMODITY PRICES
Gold
Silver
$/ounce
$/ounce
1,200.00
20.00
GROSS SALES
Gold
Silver
$
$
2,435,334,667
73,609,507
Gold
(10,654,589)
Silver
$/ounce
$
$/ounce
(5.25)
(2,726,278)
(0.74)
PAYABLES
Gold
Silver
%
%
100.00
90.00
NET REVENUE
Gold
$
$/ounce
$
$/ounce
$
2,424,680,078
1,194.75
63,794,906
17.33
2,488,474,985
$
$/tonne
$
$/tonne
$
$/tonne
$
$/tonne
$
$/tonne
$
$/tonne
$
521,797,166
5.50
75,161,381
0.79
277,116,037
2.92
12,276,000
0.13
44,406,589
0.47
20,000,000
0.21
950,757,173
REFINING &
TRANSPORTATION
Silver
Total Net Revenue
Operating Costs
Mining Cost
Mining Cost Lease
Processing
Royalties (Newmont payment)
Total Operating Cost
Operating Profit
Operating Profit
$
$/gold ounce
1,537,717,812
757.70
Capital Costs
Mining Cost - Purchase
Mining Cost - Down Payment
Process Plant Direct Cost
Process Plant Indirect Cost &
Contingency
Leach Pads
Waste Dump
Total Capital Cost
10,948,500
15,033,000
183,575,411
71,864,906
$
$
$
$
$
19,078,412
47,501,938
30,878,074
37,221,477
416,101,718
Changes to Working Capital
17,891,174
17,891,174
12,519,459
12,519,459
3,364,913
3,364,913
259,969
259,969
259,969
259,969
382,765
382,765
210,851
210,851
210,851
210,851
210,851
210,851
210,851
210,851
210,859
210,859
1,488,966
1,488,966
$
$/gold ounce
(17,891,174)
(12,519,459)
(3,364,913)
(259,969)
(259,969)
(382,765)
(210,851)
(210,851)
(210,851)
(210,851)
(210,859)
(1,488,966)
1,140,946,396
1,128,426,937
1,125,062,024
1,124,802,055
1,124,542,086
1,124,159,321
1,123,948,470
1,123,737,620
1,123,526,769
1,123,315,918
1,123,105,060
1,121,616,094
Working Capital Costs

Cumulative Pre-income Tax

Cash Flow
207
1,121,616,094
552.67

Sensitivity Analysis
The project's pre-income tax internal rate of return sensitivity relative to incremental
changes in metal prices, recoveries, grades and costs are shown in Table 22.4 and
Figure 22.1
Table 22.4
Rate of Return Sensitivity
Percent
Changes
-20%
-15%
-10%
-5%
Base
5%
10%
15%
20%
Gold Price
17.8%
20.5%
23.0%
25.4%
27.7%
29.9%
32.1%
34.1%
36.2%
Silver Price
27.5%
27.5%
27.6%
27.6%
27.7%
27.8%
27.8%
27.9%
27.9%
Gold Recovery
17.9%
20.5%
23.0%
25.4%
27.7%
29.9%
32.0%
34.1%
36.1%
Silver Recovery
27.5%
27.5%
27.6%
27.6%
27.7%
27.8%
27.8%
27.9%
27.9%
Gold Grade
17.9%
20.5%
23.0%
25.4%
27.7%
29.9%
32.0%
34.1%
36.1%
Silver Grade
27.5%
27.5%
27.6%
27.6%
27.7%
27.8%
27.8%
27.9%
27.9%
Operating Cost
31.6%
30.6%
29.7%
28.7%
27.7%
26.7%
25.7%
24.7%
23.7%
Capital Cost
33.9%
32.1%
30.5%
29.1%
27.7%
26.4%
25.2%
24.1%
23.1%
Figure 22.1
Amulsar Gold Project Pre-Tax Sensitivity IRR
The project's pre-income tax net present value, using a five percent discount rate,
sensitivity relative to incremental changes in metal prices, recoveries, grades and costs
are shown in Table 22.5 and Figure 22.2.
208

Table 22.5
Percent
Changes
NPV Sensitivity (US$ X 1000)

-20%
-15%
-10%
-5%
Base
5%
10%
15%
20%
Gold Price
324,235
404,670
485,106
565,541
645,976
726,411
806,846
887,282
967,717
Silver Price
637,349
639,506
641,663
643,819
645,976
648,133
650,289
652,446
654,603
Gold Recovery
325,643
405,726
485,809
565,893
645,976
726,059
806,143
886,226
966,309
Silver Recovery
637,669
639,746
641,822
643,899
645,976
648,053
650,130
652,206
654,283
Gold Grade
325,643
405,726
485,809
565,893
645,976
726,059
806,143
886,226
966,309
Silver Grade
637,669
639,746
641,822
643,899
645,976
648,053
650,130
652,206
654,283
Operating Cost
774,792
742,588
710,384
678,180
645,976
613,772
581,568
549,364
517,160
Capital Cost
716,605
698,948
681,291
663,633
645,976
628,319
610,661
593,004
575,347
Figure 22.2
Amulsar Gold Project Pre-Tax Sensitivity NPV@5%
As seen in Tables 22.4 and 22.5, the project's pre-income tax rate of return is 27.7
percent and the project's pre-income tax net present value at a 5 percent discount rate is
US$ 646.0 million. A ten percent increase in the gold price increases the estimated rate
of return to 32.1 percent and increases the project's net present value, at a 5 percent
discount rate, to US$ 806.8 million.
The sensitivity of the project to gold price in increments of US$ 100/oz is presented in
Table 22.6.
209

Table 22.6
Summary of Key Financial Parameters (Sensitivity to Gold Price)

1,100
1,200
1,300
1,400
1,500
NPV(5), (000's)
512,504
645,976
779,448
912,920
1,046,392
IRR, Pre-Taxes
23.8%
27.7%
31.3%
34.8%
38.1%
4.5
4.0
3.7
3.4
3.1
Gold Price, US$/oz
Payback, Operating Years
210

23
ADJACENT PROPERTIES
There are no adjacent properties that are material to the estimation of resources for the
Amulsar project. The information presented herein is considered to be sufficient for a
feasibility study. It is anticipated that additional details regarding optimizing mining
methods, metallurgical testwork and flowsheet development, permitting, waste dump
and leach pad management, closure and rehabilitation design, and infrastructure items
will be expanded upon in the detail engineering effort. Other studies in support of the
Feasibility Study were prepared by Golder including the Integrated Water Studies
(Golder, 2012i) which also used to support the ESIA, the Earthquake Hazard
Assessment and Seismic Parameters (Golder, 2012b), and a Technical Memorandum
on Phase II Kinetic Testing (Golder, 2012e). The information from the Golder Integrated
Water Studies has been discussed within the context of Section 20.0. A brief discussion
on the latter two topics is presented in the following subsections.
23.1.1
Seismicity and Seismic Hazards
Golder prepared a report titled Earthquake Hazard Assessment and Seismic

Parameters for the Amulsar Project (Golder, 2012b) that provided a basic assessment of
seismic hazards and developed the seismic design parameters for use by the various
engineering teams for use in design of project infrastructure. The Amulsar gold project
site is located within a mountainous, geologically complex, and seismically active region
of the Arabia-Eurasia plate boundary zone. The northward motion of the Arabian plate
and collision with the Eurasia plate has continued to generate crustal deformation that is
manifest as active faulting and folding, period volcanic eruptions, and destructive
earthquakes. Historic records indicate that at least 3,150 earthquakes have occurred in
the region from 2150 BC to the end of August 2011. Armenian records indicate that the
site has experienced strong to very strong shaking at least three times in the last 900
years.
A seismotectonic model containing 53 separate seismic sources is used to develop
probabilistic and deterministic seismic hazard analyses specific to the Amulsar gold
project site location. The Pambak-Sevan-Sunik fault Segment 4 (PSSF4) located
approximately 10 km north of the Amulsar gold project area at its closest approach
makes a strong contribution to the site hazard. The PSSF4 has an average long-term
slip rate of 1.550.65 mm/yr., and is not known to have generated a major earthquake in
historic time (approximately the last 10,000 years).
Seismic hazard analyses were performed at the heap leach facility, the crusher facility,
the waste dump and the open pit sites. Probabilistic analyses yielded a 475- year return
period PGA, typically defined as the Operational Base Earthquake (OBE), that ranges
from 0.18 g and 0.20 g and a 2,475-year return period PGA, typically defined as the
Maximum Event Earthquake for design purposes that ranges from 0.33 g and 0.40 g for
211

soil Site Class B at the four sites. Deterministic results PGA values of median PGA
values ranging 0.22 g and 0.27 g across the four sites. Deterministic results PGA values
of 84th percentile PGA values ranging 0.37 g and 0.47 g across the Other Relevant
Data and Information
23.2 Preliminary Geochemical Assessment
Golder is performing a geochemical characterization program of waste material at the
Amulsar site. The characterization work is being conducted to support the FS and the
ESIA. The overall objective of this geochemical characterisation program is to evaluate
the long-term effluent water quality resulting from interaction of the waste rock with the
natural environment. The waste rock will contain material from the Erato, Tigranes, and
Artavasdes pits, and is projected to be composed of 54% volcanics, 41% porphyry
andesite, and 5% breccias. Water quality is evaluated in terms of acid rock drainage
(ARD) and metals leaching (ML) potential.
The work has focused on waste materials available from samples obtained from the
Tigranes and Artavasdes deposits. The results of initial static testing have been
completed and kinetic testing is in progress. The report detailing the static testing
evaluation included an initial program of acid base accounting (ABA), sample
representativeness evaluation, and sample selection for kinetic testing. A second report
provided initial water quality estimates based on short-term leach testing and evaluation
of the solid-phase composition. Both reports were provided to support waste
management and waste water treatment plant designs for the project.
23.2.1
Static Testing
The results of the Amulsar waste rock static characterization can be summarized as
follows:
1) All three of the lithologies comprising the Amulsar waste rock show some potential to
generate acidity and leach metals due to the existence of sulphides coupled with a
fundamental absence of carbonate or other high solubility buffering phases.
2) Conservative estimates suggest that aluminum, boron, copper, cobalt, fluoride, iron,
lead, manganese, nickel, selenium, silica, sulfate, strontium, vanadium, and zinc will be
elevated in effluents emanating from the future waste rock pile. Results from the HCT
tests will confirm if these constituents are indeed released in elevated concentrations
over longer time periods under conditions more indicative of the natural environment
and will provide an estimation of the rate ofrelease.
3) Two separate populations of samples are observed for the porphyry andesite and are
distinguished by the mineralogical composition. Samples containing a high proportion of
sulfate minerals show much less propensity to generate acid than those samples
containing a high proportion of sulfide minerals. Therefore, total sulphur concentration
should not be used as a cutoff criterion for PAG vs. NPAG material.
4) The volcanic and breccia samples contain alunite as the primary sulphur species and
do not contain much pyrite. However, these lithologies still show some degree of acid
potential; and.
212

5) Given their high sulfide composition, porphyry andesite samples show the strongest
propensity to generate acid and leach metals. Leaching of most metals tends to
increase with decreasing pH.
23.2.2
Kinetic Testing
Kinetic testing is ongoing, and is being conducted to verify whether the various ARD/ML
potentials identified by static testing will indeed be realized over time, what the
associated reaction rates (for sulfide oxidation, depletion of neutralization potential,
mineral dissolution) are, and what the composition of long-term discharges will be. The
kinetic testing will also be used to resolve any uncertainties identified during the static
testing phase.
The kinetic testing results were completed through week 10 at the time that thisfeasibility
study was finalized, are still of a preliminary nature, as the reactions being monitored are
kinetically slow. A report on interim evaluation was prepared (Golder, 2012e) and is
summarized herein and will be revisited after the minimum recommended timeframe for
HC testing of 20 weeks has elapsed. Samples that appear to have reached a steady
state will be identified and may be recommended for termination after 20 weeks of
testing.
In general, the HC testing results to date indicate there is a potential for acid generation
and metals leaching from rocks that contain significant pyrite, primarily porphyry
andesite samples. Currently, the constituents of concern for long term water quality
include aluminum, arsenic, cobalt, copper, iron, fluoride, iron, manganese, nickel,
selenium, strontium, sulfate, vanadium, and zinc.
Additionally, samples where pyrite was not observed do not indicate a high
acidgenerating or metals leaching potential. All humidity cells will be continued to be
monitored to a minimum of 20 weeks to determine if acidic conditions will be reached
and to estimate leachate concentrations after the onset of acidic conditions.
23.2.3
Spent Ore Characterization
Evaluation of spent ore samples generated from column leach tests suggests that most
materials comprising the HLF facility will have ARD potential. Six of the seven spent ore
samples have Neutralization Potential Ratio (NPR) values less than 1, meaning that
they fall well into the Potentially Acid Generating (PAG) field. The average sulfide
concentration of these six samples is greater than 0.5%.
Short term leach tests on the spent ore consisted of SPLP tests. The SPLP tests give an
idea of material on the surface of the spent ore that can be mobilized via a first flush (ie.
initial precipitation event), and suggest the following components will be mobile in
exceedance of IFC or Armenian guidelines:
Fluoride: 0.11-0.21 mg/L (three samples in exceedance)
Aluminum: 0.15-0.48 mg/L (five samples)
Boron: 0.02 mg/L (one sample)
Copper: 0.005-0.01 mg/L (two samples)
213

Manganese: 0.01 mg/L (one sample)
Strontium: 0.012-0.017 mg/L (all samples)
Zinc: 0.014-0.042 mg/L (two samples)
It should be noted that for a number of the analytes, the lab detection limit was well
above the standard (generally the Armenian standard, and not the IFC guidelines), thus
it is difficult to tell for these analytes whether they are in exceedance when the lab lists
them as below detect.
214

24
INTERPRETATION AND CONCLUSIONS
Geology and Resources

The Amulsar high sulphidation epithermal gold-silver deposit has been defined as a
result of systematic exploration activities undertake over a period from 2007 to 2012.
More recently, surface geological and structural mapping, supported by a large
database of orientated core measurements, has resulted in an improved understanding
of the geology and mineralization of gold and silver for the deposit. In turn, this has
allowed the estimation of resources to better reflect the geology and mineralization
characteristics of the deposit.
Exploration work for the project is professionally managed, using procedures that meet
generally accepted industry best practices. The project has been explored by
geophysical techniques, diamond core and reverse circulation drilling, and chip
sampling. In 2012, a structural study over the Amulsar property was commissioned by
Lydian. This study necessitated a major reinterpretation of geology and mineralization
constraints for the project.
Mineral resources for the project are based on the interpretation of two major geological
units which characterize the project. The UV unit is the primary host to gold and silver
mineralization with mineralization in the LV unit limited to contacts with mineralized UV
rocks and mineralized structures that pass through both UV and LV rocks. The
disposition of UV and LV rocks are structurally complex, as the area has undergone a
thrust faulting event which formed an antiform structure across the Amulsar area. The
thrusting event was followed by two episodes of extensional faulting which have
dissected the UV and LV units into a complex arrangement of structurally bounded
blocks.
Mineralization at the Amulsar projects is related to faulting, porous and permeable
lithological units within the UV, faulting and fractures, and relatively impermeable LV
rocks acting causing ponding of mineralizing fluids along UV-LV boundaries. As a
result, mineralization within the UV unit is complex and difficult to map because of small
scale variations in lithologies, fracture zones and a complex relationship to fault
structures. Mineralization boundaries are difficult to define as they can grade from
distinct mineralization to diffuse mineralization and because mineralization is too
variable or short ranged to be mappable.
In the absence of clear mappable controls of mineralization an LMIK estimator was
chosen as the most appropriate methodology to estimate gold resources for the UV unit.
Gold mineralization for the LV unit is limited and overall subordinate to UV
mineralization, and therefore, an OK estimator was used for this unit. Silver
mineralization is not well understood, probably unrelated to gold and significantly lowgrade. An OK approach to estimating silver for the UV and LV zones was deemed
appropriate.
The confidence level between and within mineralized zones is variable, in part because
of the inherent characteristics of gold and silver mineralization and structural complexity,
and the variability of drilling from a nominal 40 m 40 m drillhole spacing to 80 m 80
m and larger drillhole spacing. AMC considers it prudent to classify resources based on
215

a range of factors including; estimation related parameters, drillhole spacing, continuity

of mineralization that have been outlined, and defining classified resources as mineable
shapes. On this basis, resources for the deposit have been classified in the Measured,
Indicated and Inferred categories.
Resources have been defined at a cut-off grade of 0.35 g/t gold which is based on a
gold price assumption of US$1,200 per troy ounce of gold.
Based on review of exploration data and the estimation of resources AMC concludes
that mineral resources can be expanded at depth for the UV rocks to the south-east of
the Arshak area, and at depth in the Erato, Tigranes and Artavasdes areas. Further
exploration will require reverse circulation drilling and some diamond core drilling to
provide structural information. Continuing work on a structural analysis of the project will
be important to the accurate estimation of resource and a better geological
understanding of mineralization for the Amulsar project.
Mining
Mining of the project deposit will be accomplished with conventional open pit mining
methods. A mixed fleet of 10 and 17 cubic meter excavators is planned to load 90 tonne
haul trucks.
Each year has been scheduled with 70 lost shifts to account of bad weather, holidays,
etc. During an 11 hour shift, it is expected that there will be 532 operating minutes. A
mechanical availability of 85% has been applied to all equipment to account for down
time for machine repair. A utilization of equipment when it is available is also applied;
this utilization factor is variable and based on the frequency a machine is expected to be
used. If these assumptions of lost time are not exceeded, then the mining equipment
requirements are sufficient for moving the material required by the proposed mine
schedule.
There is some uncertainty in the mining productivities that can be achieved during winter
weather at the Amulsar project. This has been given consideration during mine planning
by significantly reducing the operating days available in the first and fourth quarters.
Effectively, the first and fourth quarters have been planned with a month of lost
operating days. If the winter weather is severe enough to stop operations more than 17
percent of the time, the mine operations may have difficulty in moving the tonnes
required by the mine plan.
The steepness of terrain in the project area creates some difficulties in mine planning.
Within close proximity of the pit, there are few suitable locations for dumps and
stockpiles. The haul distance to the waste dump facility is approximately 4.5 Km. The
opportunity to backfill some of the pits towards the end of mine life will reduce haulage
costs and also reduce closure costs after mining is complete.
Appropriate slope stability examination has been completed for the Feasibility Study by
Golder in their June 2012 Pit Slope Design Report. Pit slope angles are determined
using reasonably conservative assumptions but as with any mining project there is
always some risk involved in slope stability. As the initial phases are opened up, there
will be an opportunity to have a better understanding of the rock mass response to
216

excavation. Slope angles can be adjusted

blasting/excavating practices can be modified.
for
subsequent
phases
and
There are no foreseeable risks in mining of the Amulsar deposit that will upset the
project economics. The pre-stripping required before ore production can begin is only
729,000 tonnes which keeps the pre-production mining costs low.
Mineral Processing
As gold recovery from the Amulsar metallurgical samples were sensitive to crush size up
to a top size of 38 mm and as the project economics are sensitive to gold recovery, a
ROM leach facility was not considered.
The Amulsar ore body is low grade. Preliminary studies completed to date indicate that it
is not beneficial for gold to be extracted utilizing fine grinding as part of a beneficiation
scheme. The differential gold extraction between heap leaching and fine grinding plus
agitated leaching will not offset the capital and operating cost increases imposed by
grinding. Therefore beneficiation techniques including agitation leaching has been
eliminated as an option.
The major project risk is due to the fact that there are no existing heap leach gold mines
currently operating in the country. Therefore there are also limited manpower resources
available to operate the facilities. On a positive note, the Amulsar gold ore does not
contain any deleterious elements and with appropriate training it is anticipated that
operations will reach acceptable efficiencies.
Infrastructure
Additional work has been devoted to infrastructure components including power
acquisition, road upgrading and fresh water development.
Electrical Power is available from the electrical grid inside Armenia at a distance of
approximately 27 km from the project site. Initial discussions with the power company
indicate that reliable power is available and preliminary design and associated cost has
been provided to Lydian for this project.
There are currently dirt roads to the ADR and Mining facility that need to be upgraded.
The cost for this effort was reviewed with local construction companies and included in
the cost estimate.
Water is available from the Vorotan River by installing a perforated concrete sump along
the river and pumping to a storage tank and is then distributed to the processing
facilities.
Geotechnical Heap Leach Facility and Waste Dump Facility
The results of the geotechnical site investigations, laboratory testing and engineering
evaluation performed for the Amulsar Project indicate that the heap leach facility and
waste dump facility can be developed at each of the selected sites. Development of the
sites should be performed in conformance with detailed engineering designs and
217

construction specifications to be further developed based on the feasibility level

engineering designs included in this FS. Review and approval from local Armenian
agencies should be obtained as required prior to construction.
Environmental and Social
A number of environmental and social issues were identified through the ESIA scoping
exercise and public consultations. The social and environmental issues identified were
not prohibitive and contributed to defining the scope of work for further baseline studies
to better characterise them and to provide strategies for mitigation designs. Risks
associated with the Project design have been addressed via assessments, consultation
and the preparation of detailed management plans to be implemented during the
construction and operational phases of the Project.
The findings of the Scoping Study and the terms of reference for continuing work were
presented, in May 2011, to the neighbouring communities as part of the public
consultation and disclosure process. Key issues and observations were noted and
appropriate actions were incorporated in the ESIA scope and programme of works.
Lydian has commissioned several discrete studies in response to the findings of the
Scoping Study and public consultation undertaken to date and has pledged support and
resources to the actions identified.
The findings of the ESIA range from Negligible to Major, in the absence of mitigation.
Through the implementation of detailed mitigation measures, together with adherence to
management plans in the ESAP, it is considered that any potential residual
environmental and social impacts can be reduced to a range Negligible to Moderate.
The mitigation measures defined in ESIA together with the associated management
plans have informed the project design and will be incorporated into operational
procedures, as well as Lydians overarching ESMS, including health and safety issues.
218

25
RECOMMENDATIONS
Geology and Resources

The exploration procedures and protocols used by Lydian meet best industry practices
and should be continued. Assay quality-control procedures are appropriate but could be
strengthened with field duplicates for silver assays. It is AMCs experience that operating
a sample preparation facility provides many benefits to exploration companies without
any compromises in assay integrity or reliability. Although AMC has found no issues with
the current sample preparation laboratory at Gorayk, developing protocols where
samples are passed to the preparation facility in a more formalized process will be
beneficial.
It is AMCs experience that the process of delivering samples from the core shed to the
preparation facility should be undertaken in a similar manner to submitting samples to
an outside laboratory. Some procedures that could be undertaken are:
Packaging sample bags from the core shed into sealed barrels or large bags that
are then delivered to the laboratory;
Barrels or large bags are unpacked by laboratory staff;
Barcodes are assigned to each sample that enters the laboratory and used to log
samples out of the laboratory.
A structural study of the Amulsar project initiated in 2012, has provided important
directions in understanding the Amulsar project, and should be continued. AMC
considers that structural studies of the deposit are a critical part of exploring and
defining more mineral resources for the project.
AMC recommends a combination of infill drilling and step-out drilling to systematically
extend known areas of mineralization. The infill drilling strategy is suggested to
concentrate on delineating measured and indicated by drilling areas classified as
inferred by resources, by increasing the drilling density to a nominal spacing of 40 m
40 m spacing, with both inclined and vertical holes. In some areas, more closely spaced
drilling may be required, to better define structural or lithological contacts or areas where
mineralization becomes diffuse. Step-out drilling should concentrate on extending
mineralization to the south-west of the Arshak area, and extending mineralization at
depth in the Erato, Tigranes and Artavasdes areas.
A programme to provide the basis for the above recommendations is summarized in
Table 25.1. The estimated costs include ancillary costs such as staff, logistics, and
earthworks costs. The total cost for this programme is estimated at US$6,300,000.
Metallurgy
Metallurg Pty Ltd. recommends the following for column leach tests:
Further column leach tests be carried out on metallurgical composites from the
Erato deposit. Drillholes and sample intervals should be selected based upon the
updated Mineral Resource Estimate and open-pit design prepared by AMC.
Carry out a single refrigerated column leach test on a mixed Tigranes/Artavasdes

composite sample, to simulate the effect of cold climate on leach performance;
219

Carry out column leach tests on a run-of-mine ore sample to determine the
potential metallurgical leach performance; and
Conduct additional column leach tests on low-grade material of 0.2 g/t Au and 0.3
g/t Au.
Table 25.1
Estimated Costs for Recommended Exploration Programme
Description
Estimated Cost US$
Reverse circulation Drilling, 34,000 metres
3,500,000
Diamond core drilling, 6,000 metres
1,400,000
Analytical costs
1,200,000
Resource update
Total
200,000
6,300,000
Mining
The following recommendations are made by IMC for future engineering work to either
increase the accuracy of work performed or to explore opportunities for improvement of
project economics.
There are some inconsistencies between the surveyed drill hole collars and the
projected topography used in the project General Arrangement. When generating the
block model, an adjusted topography was used that tied in with the drill hole collars so
that resource numbers would be accurate. It is possible that there could be a minimal
increase or decrease in waste stripping requirements in areas with sparse drilling. A
survey controlled topography map that ties in with the drill hole collars should be
produced.
The option to stockpile low grade material should be studied before mining begins. This
would require a 4th phase addition to the leach pad. Currently the mine schedule sends
36,654 ktonnes of material above a 0.15 g/t recoverable gold grade to the waste dump.
This material is below the mining cut-off grade, but still generates positive economics. A
suitable stockpile location needs further investigation.
Based on the number of trucks required to move the material scheduled in the mine
plan, increasing the size of the haul trucks from 90 tonne to 140 tonne may be beneficial
to the project economics and operation logistics. This would require a redesign of the
phases to incorporate wider haul roads.
The option to model the ore body with 5 meter blocks versus 10 meter blocks should be
evaluated.
Mineral Processing and Infrastructure
Further studies to improve the economics include the following:
-
Further review the topography to minimize earthwork, foundation and conveying

costs
Conduct a more detailed review of a 10Mtpa production rate from day 1
220

Single primary gyratory crusher versus two jaw crushers
Review economics of crushing and conveying waste
Prepare a detailed heap leach stacking schedule
Optimize or value engineer the general arrangement drawings prior to beginning

detailed engineering design
Finalize crushing and process plant location
Revise the WWTP design to be consistent with the anticipated modification of the
regulatory water quality discharge criteria to include a mixing zone upgradient of
the point of compliance, which is expected to be located 500 m downstream from
the point of discharge. The result of this change in the regulatory point of
compliance and inclusion of a mixing zone is that the water management
components in the WDF design, namely the need for the Evaporation Pond and
the design of the Influent Effluent Basin, will need to be reviewed and revised
during detailed engineering to be consistent with the revised discharge criteria and
change in WWTP design.
Review WWTP current design to consider possibly reclaiming the treated water for
use at the Heap Leap Facility. In the current design, the water treatment plant will
be in operation at the beginning of the mine life and will run as required during the
mine operation.
Further geochemical and metallurgical quantitative analysis to determine if using

reclaimed water will have unfavorable reactions with process solutions at the Heap
Leach Facility. This will then have to be confirmed by further bench-scale column
leach testing. The reclaimed water will likely have to be treated for various metals,
sulfate and selenium.
Further analysis of water balance to reduce treatment requirements by using a

water conservation policy to reduce intake consumption.
Utilize on-site mining equipment to supplement the contractor equipment for rough
grading required for the access roads to the site. This same philosophy could be
utilized for the bulk of the cut and fill required at the leach pad and ponds
Coordinate with the local power company to optimize the power line routing from
the closest reliable power source from the Armenian grid power.
Environmental and Social
Finalize Environmental and Social Management Plans based on the framework

plans provided in the ESIA, and develop ESMS and Health and Safety Systems
for the construction and operation phases.
Commence preparation of the operational procedures required to implement the

ESAP, in line with detailed engineering procurement and construction schedule,
consider opportunities to identify efficiency savings through this process.
Maintain programme of environmental monitoring and additional baseline

observations for water, land and air quality, to target aspects of detailed design
that would contribute to efficient mitigation design during detailed design and
construction phase and eventually closure.
221

Continue the development and implementation of the Biodiversity Action Plan, to

include additional surveys as required and continued monitoring and engagement
with interested parties in order to design and initiate the potential offsite
biodiversity benefits. Establish benchmarks for restoration to support and offset
impacts resulting from construction and operation, as well as incorporate findings
together with management planning for reclamation.
Continue consultations with stakeholders that depend on their livelihood or have

an interest in the land within the Project area, prior to commencement of the
construction programme, to form and continue effective working relations.
Maintain programmes of social engagement and community development to

define the opportunities for integrating employment opportunities afforded by the
construction programme with the local labor market.
222

Project Planning
Optimize the Engineering, Procurement and Construction Schedule and maximize

working indoors in the winter months and performing the outdoor earthwork and
concrete foundation efforts during the summer months.
Finalizing plant location trade off studies prior to beginning Detail Engineering.
Commence work on a project operating plant and project execution plan.
Begin hiring key personal to assist with monitoring and provide direction to the
detail engineering consultants.
Hire a construction manager who is familiar with the in- country construction
contractors who can match the services required with the most qualified
contractors. It would also be beneficial if this person was familiar with the local unit
construction material costs, steel fabrication and labor costs.
Confirm quality of work and availability of in-country contractors and steel

fabricators and their ability to perform the installation services for this project
Confirm mine equipment leasing agreement and obtain project financing.
The authors of this report are of the opinion that the character of the Lydian Amulsar
Gold Project is of sufficient merit to commence with Detail Engineering beginning in
October 2012.
It is recommended that the project be advanced to the Detail Engineering stage.
Estimated costs for this level of study are summarized in Table 25.2.
Table 25.2
Estimated Costs for Detailed Engineering Study
Description
Estimated Cost* US$
Mine Design 250,000
250,000
Mineral Processing & Infrastructure 8,000,000
8,000,000
Heap Leach and Waste Dump Facilities, Pit Slopes & Hydrology 1,000,000
1,000,000
In country miscellaneous engineering support

Total
200,000
9,450,000
*Based on recommendations dated 3 September 2011 and does not included exploration costs.
223

26
REFERENCES
Abzalov, M, 2006. Localised uniform conditioning (LUC): A new approach for direct
modeling of small blocks, in Mathematical Geology The International Association for
Mathematical Geology.
CSA Global, 2011. Amulsar Gold Project, 43-101 Technical Report, Armenia. Report
prepared by CSA Global Pty Ltd. for Lydian International Limited.
Golder Associates Inc. 2011. International Cyanide Management Code Internal Audit
Protocol, Amulsar, Project, Armenia. Prepared for Lydian International Ltd. Golder
Project No. 113-81597FS.130-Rev0. 62 pp. September 16. 11381597FS_006_R_Rev0.
Golder Associates Inc. 2012a. Geotechnical Report, Crusher Area, Amulsar Gold
Project, Central Armenia. Prepared for Lydian International Ltd. Golder Project No. 11381597FS.140. 25 pp. February 28. 11381597FS_019_R_Rev1.
Golder Associates Inc. 2012b. Earthquake Hazard Assessment and Seismic Parameters
for Amulsar Gold Project Site, Armenia. Prepared for Lydian International Ltd. Golder
Project No. 113-81597FS. 29 pp. March 28. 11381597FS_025_R_Rev0.
Golder Associates Inc. 2012c. Feasibility Level Pit Slope Design Report, Amulsar
Project, Armenia. Prepared for Lydian International Ltd. Golder Project No. 11381597FS.220. 76 pp. June 25. 11381597FS_033_R_Rev0.
Golder Associates Inc. 2012d. Feasibility Design Report, Heap Leach Facility, Amulsar
Gold Project, Central Armenia. Prepared for Lydian International Ltd. Golder Project No.
113-81597FS.120. 37 pp. July 3. 11381597FS_031_R_Rev0.
Golder Associates Inc. 2012e. Technical Memorandum: Phase II Kinetic Testing,
Geochemical Characterisation Program Amulsar Project, 10-week Interim Update.
Prepared for Lydian International Ltd. 113-81597FS, Phase 340. July 9. 5 pp.
11381597FS_035_TM_Rev0.
Golder Associates Inc. 2012f. Wastewater Treatment Feasibility Evaluation, Amulsar
Project, Armenia. Prepared for Lydian International Ltd. Golder Project No. 11381597FS. 30 pp. July 20. 11381597FS_034_R_Rev0.
Golder Associates Inc. 2012g. Feasibility Design Report, Waste Dump Facility, Amulsar
Gold Project, Central Armenia. Prepared for Lydian International Ltd. Golder Project No.
113-81597FS.120. 29 pp. July 27. 11381597FS_036_R_Rev0.
Golder Associates Inc. 2012h. Preliminary Closure and Rehabilitation Plan and Cost
Estimate, Amulsar Gold Project. Prepared for Lydian International Ltd. Golder Project
No. 113-81597FS.360. 20 pp. July 27. 11381597FS_039_R_Rev0.
Golder Associates (UK) Ltd. 2012i. Amulsar Open Pit Gold Project, Integrated Water
Studies.
Prepared
for
Lydian
International
Ltd.
Golder
Report
No.
11514250168.502/A.0. 111 pp. August 2012
224

Golder Associates Inc. 2012j. Heap Leach Facility Site Alternatives Analysis, Amulsar
Gold Project, Central Armenia. Golder Project No. 113-81597FS.150. 28 pp. February
29. 11381597FS_016_R_Rev0.
Holcombe, R. J., 2013. Outline of methods and procedures in developing the Amulsar
geological model. Internal Lydian progress report.
K D Engineering, 2011. Amulsar Resource Update and Heap Leach Feasibility Study.
Report prepared by K D Engineering for Lydian International Ltd.
225

APPENDIX A
SELECTED ASSAY QUALITY CONTROL PLOTS

Statistic
SampleCount
Minimum
Maximum
Mean
Median
StandardDeviation
CorrelationCoefficient
Pairs10%HARD
Original
CoreFieldDuplicates
1017
1017
0.003
0.003
22.000
18.350
0.259
0.267
0.0390
0.0410
0.9738
0.9278
0.915
876
86%
Project
DataSeries
DataType
AnalyticalMethod
DetectionLimit
BiasChartDiamondCoreFieldDuplicates
AmulsarGold
20082012
FieldDuplicatesCore
FireAssay
0.0025ppm
BiasChartPulpDuplicateAssayPairs
AmulsarFieldDuplicates Core
25
2
y=0.8717x+0.0413
R=0.837
1.8
20
1.6
DuplicateAssays[Auppm]
y=0.8717x+0.0413
R=0.837
15
10
1.4
1.2
0.8
0.6
0.4
Auppmassays
Auppmassays
0.2
RegressionLine
RegressionLine
0
0
10
15
20
25
0.2
0.4
0.6
0.8
OriginalAssays[Auppm]
1.2
1.4
1.6
1.8
MeanversusHalfAbsoluteRelativeDeviationPlot
100
80
90
60
80
40
70
20
60
HARD%
100
HRD%
20
50
40
40
30
Auppm
60
20
10%HRD
80
Zero
10
Linear(Auppm)
100
0.001
0.01
0.1
10
0
0.001
100
MeanofPairs Auppm
0.01
0.1
10
100
MeanofPairs Auppm
Q-Q Plot Pulp Duplicate Assay Pairs
RankedHalfAbsoluteDeviationPlot
6.00
100
90
5.00
Duplicate Assays [Au ppm]
80
HARD[%]
70
60
50
40
4.00
3.00
2.00
30
1.00
20
10
0.00
0.00
0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1.00
2.00
3.00
4.00
5.00
6.00
Original Assays [Au ppm]
RANK
A1

Statistic
SampleCount
Minimum
Maximum
Mean
Median
StandardDeviation
Pairs10%HARD
Original
RCFieldDuplicates
1618
1618
0.003
0.003
13.700
16.500
0.342
0.347
0.0865
0.0840
0.8840
0.9567
0.955
1310
81%
Project
DataSeries
DataType
AnalyticalMethod
DetectionLimit
BiasChartRCFieldDuplicateAssayPairs
2
16
1.8
y=1.0339x 0.007
R=0.9127
1.6
y=1.0339x 0.007
R=0.9127
18
14
AmulsarGold
20082012
RCFieldDuplicates
FireAssay
0.0025ppm
12
10
1.4
1.2
0.8
0.6
4
0.4
Auppmassays
Auppmassays
0.2
RegressionLine
RegressionLine
0
0
10
12
14
16
18
0.2
0.4
0.6
1.2
1.4
1.6
1.8
100
100
80
90
60
80
40
70
20
60
HARD%
HRD%
0.8
20
50
40
40
30
60
20
80
10
100
0.001
0.01
0.1
10
0
0.001
100
MeanofPairs Auppm
0.01
0.1
10
100
MeanofPairs Auppm
7.00
100
90
6.00
Duplicate Assays [Au ppm]
80
HARD[%]
70
60
50
40
5.00
4.00
3.00
2.00
30
1.00
20
10
0.00
0.00
0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Original Assays [Au ppm]
RANK
A2

Statistic
SampleCount
Minimum
Maximum
Mean
Median
StandardDeviation
Pairs10%HARD
Original
Umpire
1609
1525
0.005
0.005
16.650
14.300
0.320
0.334
0.0980
0.1070
0.8595
0.8368
0.994
1449
90%
Project
DataSeries
DataType
AnalyticalMethod
DetectionLimit
BiasChartAcmeUmpireAssayPairs
AmulsarGold
20082012
AcmeUmpireSample
FireAssay
0.0025ppm
BiasChartUmpireAssayPairs
2
18
y=0.9457x+0.014
R=0.9873
1.8
16
y=0.9457x+0.014
R=0.9873
1.6
14
DuplicateAssays[Aug/t]
DuplicateAssays[Aug/t]
1.4
12
10
1.2
0.8
0.6
0.4
Aug/tassays
Aug/tassays
0.2
RegressionLine
RegressionLine
0
0
0
10
12
14
16
18
0.2
0.4
0.6
0.8
OriginalAssays[Aug/t]
1.2
1.4
1.6
1.8
100
100
80
90
60
80
40
70
20
60
HARD%
HRD%
OriginalAssays[Aug/t]
20
50
40
40
30
60
20
80
10
100
0.001
0.01
0.1
10
0
0.001
100
MeanofPairs Aug/t
0.01
0.1
10
100
MeanofPairs Aug/t
6.00
100
90
5.00
Duplicate Assays [Au g/t]
80
HARD[%]
70
60
50
40
4.00
3.00
2.00
30
1.00
20
10
0.00
0.00
0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1.00
2.00
3.00
4.00
5.00
6.00
Original Assays [Au g/t]
RANK
A3

Amulsar Project Gold Blank and CRM Plots

BLANKS
G3022
0.18
2.9
0.16
2.8
0.14
2.7
0.12
2.6
Aug/t
Aug/t
0.2
0.1
2.5
0.08
2.4
0.06
2.3
0.04
2.2
ExpectedValue
Result
MaximumRange
CertifiedValue
0.02
Result
2StDeviation
+2StDeviation
Result
2StDeviation
+2StDeviation
Result
2StDeviation
+2StDeviation
2.1
2
SampleNumber
SampleNumber
G3023
G3072
10
1.5
1.4
9.5
1.3
9
Aug/t
Aug/t
1.2
1.1
8.5
1
8
CertifiedValue
Result
2StDeviation
0.9
+2StDeviation
7.5
SampleNumber
SampleNumber
GLG3041
OxD57
0.25
0.45
0.23
0.44
0.21
0.43
0.19
0.42
0.17
0.41
Aug/t
Aug/t
CertifiedValue
0.8
0.15
0.4
0.13
0.39
0.11
0.38
0.09
0.37
CertifiedValue
Result
2StDeviation
+2StDeviation
CertifiedValue
0.07
0.36
0.05
0.35
SampleNumber
SampleNumber
A4

Statistic
SampleCount
Minimum
Maximum
Mean
Median
StandardDeviation
Pairs10%HARD
Original
FieldDuplicate
1442
1442
0.010
0.005
100.000
100.000
2.505
2.481
1.4000
1.4000
5.8488
5.5125
0.964
944
65%
Project
DataSeries
DataType
AnalyticalMethod
DetectionLimit
BiasChartPulpDuplicateAssayPairs
AmulsarGold
20112012
RCFieldDuplicates
ICPME
0.005ppm
AmulsarAgFieldDuplicatesRCCoarseRejects
20
120
y=0.909x+0.2036
R=0.9303
18
100
16
y=0.909x+0.2036
R=0.9303
14
DuplicateAssays[Agg/t]
DuplicateAssays[Agg/t]
80
60
40
12
10
4
20
Agg/tassays
Agg/tassays
RegressionLine
RegressionLine
0
0
0
20
40
60
80
100
120
OriginalAssays[Agg/t]
12
14
16
18
20
100
100
80
90
60
80
40
70
20
60
HARD%
HRD%
10
OriginalAssays[Agg/t]
20
50
40
40
30
60
20
80
10
100
0.001
0.01
0.1
10
100
0.01
MeanofPairs Agg/t
0.1
1
MeanofPairs Agg/t
10
100
10.00
100
9.00
90
8.00
Duplicate Assays [Ag g/t]
80
HARD[%]
70
60
50
40
7.00
6.00
5.00
4.00
3.00
30
2.00
20
1.00
10
0.00
0.00
1.00
0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Original Assays [Ag g/t]
RANK
A5

Amulsar Project Silver Blank and CRM Plots

BLANKS
GBMS3044
1.4
1.2
Result
Maximum
CertifiedValue
1.2
0.8
Agg/t
Agg/t
ExpectedValue
0.6
2StDeviation
+2StDeviation
Mean
0.8
0.4
0.6
0.2
0.4
Result
0.2
TimeSeries
TimeSeries
GBMS3044
6
5.5
CertifiedValue
Result
2StDeviation
+2StDeviation
Mean
5
4.5
Agg/t
4
3.5
3
2.5
2
1.5
1
TimeSeries
A6

APPENDIX B
SUMMARY STATISTICS FOR COMPOSITES AND CAPPED COMPOSITES

B1

B2

B3

B4

B5

APPENDIX C
SWATH PLOTS

Swath plots for Erato UV Unit, SMU Model
0.4
8000
0.35
7000
0.3
6000
0.25
5000
0.2
4000
0.15
3000
0.1
2000
0.05
1000
No. Composites & Volume [m 3]
Gold Grade [g/t]
Domain 100
561862
561742
561622
561502
561382
561262
561142
561022
560902
560782
560662
560542
560422
560302
560182
560062
Easting
Number of Composites
Model Tonnes (Scaled down by 10000)
Declustered Grade
Model Grade
0.35
8000
0.3
7000
6000
0.25
5000
0.2
4000
0.15
3000
0.1
2000
0.05
1000
Gold Grade [g/t]
Domain 100
4400485
4400365
4400245
4400125
4400005
4399885
4399765
4399645
4399525
4399405
4399285
4399165
4399045
4398925
4398805
4398685
Northing
Declustered Grade
Model Grade
412042 Amulsar Project Lydian Resource and Reserves Final_gdk.docx
C1

Swath Plots for Erato UV Unit, SMU Model

Domain 100
0.3
9000
Gold Grade [g/t]
0.25
8000
7000
0.2
6000
0.15
5000
4000
0.1
3000
2000
0.05
1000
No. Composites & Volume [m3]
10000
2875
2815
2755
2695
2635
2575
2515
2455
Elevation
Declustered Grade
Model Grade
C2

Swath Plots for AAT UV Unit, SMU Model

Domain 200
0.35
25000
Gold Grade [g/t]
0.3
20000
0.25
15000
0.2
0.15
10000
0.1
5000
0.05
0
30000
0.4
562465
562345
562225
562105
561985
561865
561745
561625
561505
561385
561265
561145
561025
560905
560785
Easting
Model Volume (Scaled down by 10000)
Declustered Grade
Model Grade
0.4
16000
0.35
14000
0.3
12000
10000
0.25
0.2
8000
0.15
6000
0.1
4000
0.05
2000
Gold Grade [g/t]
Domain 200
4398985
4398865
4398745
4398625
4398505
4398385
4398265
4398145
4398025
4397905
4397785
4397665
4397545
4397425
4397305
4397185
4397065
4396945
4396825
4396705
4396585
Northing
Declustered Grade
Model Grade
C3

Swath Plots for AAT UV Unit, SMU Model
0.4
45000
0.35
40000
35000
Gold Grade [g/t]
0.3
30000
0.25
25000
0.2
20000
0.15
15000
0.1
10000
0.05
5000
2940
2880
2820
2760
2700
2640
2580
2520
2460
No. Composites & Volume [m3]
Domain 200
Elevation
Declustered Grade
Model Grade
C4

APPENDIX D
DETAILED MINERAL RESOURCE BY ZONE

Table D.1
Zone
Erato UV
AAT UV
Erato LV
AAT LV
Mineral Resources for the Amulsar Project by Zones

Quantity (tonnes)
Gold Grade (g/t)
Silver Grade
(g/t)
9,500,000
0.93
2.53
Indicated
3,000,000
1.34
4.12
129,000
397,000
Measured+Indicated
12,500,000
1.03
2.91
414,000
1,169,000
Inferred
21,800,000
0.94
1.94
658,000
1,358,000
Classification
Measured
Contained
Gold (toz)
Contained
Silver (toz)
284,000
772,000
Measured
42,900,000
1.08
4.56
1,490,000
6,290,000
Indicated
10,900,000
1.02
3.61
358,000
1,266,000
Measured+Indicated
53,800,000
1.07
4.37
1,851,000
7,561,000
Inferred
32,000,000
0.96
3.66
987,000
3,764,000
300,000
0.57
1.6
5,000
14,000
Inferred
1,100,000
0.59
3.2
21,000
115,000
Indicated
3,900,000
0.83
1.68
104,000
210,000
Inferred
3,100,000
0.60
1.22
60,000
122,000
Indicated
1. A cut-off grade of 0.35 g/t gold for this project based on gold price of US$1,200 per troy ounce of gold and assuming an openpit mining scenario.
2. Figures have been rounded to the appropriate level of precision for the reporting of Indicated and Inferred Resources in the
upper and lower volcanic units.
3. Due to rounding, some columns or rows may not compute exactly as shown.
4. No Mineral Reserves have been estimated for the Amulsar Gold Project.
5. Mineral Resources in this Resource Statement are not Mineral Reserves do not have demonstrated economic viability. The
estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political,
marketing, or other relevant issues. Mineral Reserves have been previously reported for this project using a prior Mineral
Resource statement.
D1

Registered in England and Wales
Company No 3688365
Berkshire SL6 1LD
UNITED KINGDOM
T
F
E
+44 1628 778 256

+44 1628 638 956
[email protected]
CERTIFICATE OF QUALIFIED PERSON

G David Keller
Level 7 Nicholsons House
Nicholsons Walk
Maidenhead, Berkshire, SL6 1LD
United Kingdom
Telephone: +44 1628 778 256
Fax:
+44 1628 638 956
Email: [email protected]
I, G David Keller, do hereby certify that:
1.
I am Principal Geologist for AMC Consultants (UK) Limited, Level 7 Nicholsons House,
Nicholsons Walk, Maidenhead, Berkshire, SL6 1LD, UK.
2.
This certificate applies to the Technical Report titled Amulsar Gold Project, Armenia,
Technical Report Mineral Resource Update and Reserve Estimate For Lydian
International Limited (the Technical Report) with the effective date 18 April 2013 for
mineral resources and 28 November 2012 for reserves.
3.
I graduated with a B.Sc. in Geology from University of Alberta in1986.
4.
I am a Member of the Association of Professional Geoscientists of Ontario (#1235).
5.
I have practiced my profession continuously since 1986, and have been involved in
mineral exploration, mine geology and mineral resource consulting for a total of 27 years.
6.
I have read the definition of Qualified Person set out in National Instrument 43-101 (NI
43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfil the
requirements to be a Qualified Person for the purposes of NI 43-101.
7.
I am responsible for the preparation of all sections 1(jointly), 2 to 12, 14 and 24-25 (jointly)
of the Technical Report.
8.
I visited the property between 1214 December 2012.
9.
I have not had any involvement with the property that is the subject of the Technical
Report prior to my engagement as a geological consultant on technical matters, the
results of which form part of the Technical Report.
10.
I am independent of the issuer as described in Section 1.5 of NI 43-101.
11.
I have read NI 43-101 and Form 43-101F1, and sections 1, 2-12, 14 and 24-25 of the
Technical Report have been prepared in compliance with that instrument and form.
ADELAIDE
+61 8 8201 1800
BRISBANE
+61 7 3230 9000
MELBOURNE
+61 3 8601 3300
PERTH
+61 8 6330 1100
TORONTO
+1 416 640 1212
VANCOUVER
+1 604 669 0044
www.amcconsultants.com
Registered office: 11 Welbeck Street, London, W1G 9XZ United Kingdom
MAIDENHEAD
+44 1628 778 256
12.
As of the effective date of the Technical Report, to the best of my information, knowledge
and belief, all sections excluding Section 13 of the Technical Report contain all scientific
and technical information that is required to be disclosed to make the Technical Report
not misleading.
Dated the 21st day of May 2013
G David Keller P.Geo.

Principal Geologist
Liman Mah, 25 Sokak, Sila Apartman 15-D-10, Konyaalti, Antalya, Turkey, 07070
Tel: +61 416 182 674
Mob: +90 507 261 9222

I, Gary Anthony Patrick, do hereby certify that:
1.
I am the Principal Consultant for Metallurg Pty Ltd of: Liman Mah, 25 Sokak, Sila
Apartman 15-D-10, Konyaalti, Antalya, Turkey, 07070
2.
This certificate applies to the Technical Report titled Amulsar Gold Project, Armenia,
International Limited (the Technical Report) with the effective date of 18 April 2013 for
mineral resources and 28 November 2012 for mineral reserves.
3.
I graduated with a BSc in Chemistry / Extractive Metallurgy from Murdoch University in

October 1989.
4.
I am a Charted Professional (Metallurgy) member of the Australasian Institute of Mining &

Metallurgy.
5.
I have worked as a metallurgist for a total of twenty-three (23) years since graduating
from university. My mining expertise has been gained in all facets of metallurgy and
processing, while working for gold projects in Australia. I have been a consulting
metallurgist for my own company Metallurg Pty Ltd since 2004 and have worked on
numerous projects in the Caucuses, Central Asia, Republic of China, and in Russia. I am
well versed in the preparation of studies and have been study manager on a couple of
gold development projects.
6.
I have read the definition of Qualified Person set out in National Instrument 43-101 (NI
43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfil the
7.
I am responsible for the preparation of Sections 13 of the Technical Report.
8.
I visited the property between 6th-12th June, 2011.
9.
I have not had any involvement with the property that is the subject of the Technical
Report prior to my engagement as a metallurgical consultant on technical matters, the
results of which form part of the Technical Report.
10.
I am independent of Lydian International Limited as described in Section 1.5 of NI 43101.
11.
I have read NI 43-101 and Form 43-101F1, and Section 13 of the Technical Report have
been prepared in compliance with that instrument and form.
12.
As of the effective dates of the Technical Report, to the best of my information,

knowledge and belief, Sections 13 of the Technical Report contain all scientific and
technical information that is required to be disclosed to make the Technical Report not
misleading.
Dated the 21st May 2013
Gary Anthony Patrick,

BSc., MAusIMM CP (Met)
Director - Metallurg Pty Ltd
INDEPENDENT
3560 E. Gas Road

Tucson, Arizona 85714 USA
MINING CONSULTANTS, INC.
Tel: (520) 294-9861 Fax: (520) 294-9865

Herbert E. Welhener, Vice President, Independent Mining Consultant, Inc. located at 3560 E. Gas Road,
Tucson, Arizona, 85714; telephone (520) 294-9861, fax (520) 294-9865; [email protected]
I, Herbert E. Welhener, do hereby certify that:
1. I am currently employed by and carried out this assignment for Independent Mining Consultants,
Inc. (IMC).
2. This certificate applies to the Technical Report titled Amulsar Gold Project, Armenia,
International Limited (the Technical Report) with the effective date of 18 April 2013
for mineral resources and 28 November 2012 for mineral reserves.
3. I graduated with the follow degree from the University of Arizona: Bachelors of Science
Geology, 1973.
4. I am a Qualified Professional Member (Mining and Ore Reserves) of the Mining and
Metallurgical Society of America (#01307QP) and I am a Registered Member of the Society of
Mining, Metallurgy, and Exploration, Inc. (# 3434330RM) both recognized as a professional
association as defined by NI 43-101.
5. I have worked as a mining engineer or geologist for 37 years since my graduation from the
University of Arizona.
6. I have read the definition of Qualified Person set out in National Instrument 43-101
(NI 43-101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work experience, I fulfill the
7. I am responsible for Sections 15 16, 18.2.1, 21.1 and 21.2, and contributed to Sections 1, 24
and 25 of the Technical Report.
8. I have visited the Property on June 21 - 23, 2011.
9. I have had prior involvement with the property that is the subject of this Technical Report. I coauthored the report titled Amulsar Resource Update and Heap Leach Feasibility Study, dated 3
September 2012 and amended on 26 November 2012.
10. I am independent of the issuers as defined by Section 1.5 of NI 43-101.
11. I have read NI 43-101 and Form 43-101F1, and Sections 15, 16, 18.2, 21.1 and 21.2 of the
Technical Report have been prepared in compliance with that instrument and form.
12. As of the effective dates of the Technical Report, to the best of my knowledge, information and
belief, Sections 15, 16, 18.2, 21.1 and 21.2 of the Technical Report contain all the scientific and
misleading.
Dated this 21st day of May 2013
Herbert E. Welhener, MMSA-QPM

Vice President
May 20, 2013
1138159713-015-L1-Rev0
Mr. G. David Keller, P.Geo.

Principal Geologist
AMC Consultants Ltd.
Berkshire Sl6 1LD United Kingdom
RE:
CERTIFICATE OF AUTHOR RICHARD E. KIEL
Dear Mr. Keller:

As a co-author of this Technical Report and Mineral Resource and Reserve Update on the Amulsar
Project for Lydian International Limited, St. Helier, Jersey, Channel Islands, I, Richard E. Kiel, do hereby
certify that:
1. I am a Principal, and carried out this assignment, for Golder Associates Inc., 44 Union
Boulevard, Suite 300, Lakewood, Colorado 80228, USA, tel. (303) 980-0540, fax
(303) 985-2080, e-mail [email protected].
2. I hold the following academic qualifications:
B.Sc. (Geological Engineering), South Dakota School of Mines & Technology, USA,
1979
3. I am a registered Member of the Society for Mining, Metallurgy, and Exploration (SME).
4. I am a registered professional civil engineer in California, Nevada, Colorado, and
Wyoming.
5. I have worked as a civil and geological engineer in the minerals industry for 22 years.
6. I am familiar with NI 43-101 and, by reason of education, experience, and professional
registration, I fulfill the requirements of a Qualified Person as defined in NI 43-101. My
work experience includes 20 years as a consulting engineer on precious metals, base
metals, and rare earth oxides and 2 years as a geologist and engineer on an operating
uranium mine. I have an additional 10 years of experience in a related industry (e.g.,
solid and hazardous waste management). I am qualified to prepare and review the
engineering for the heap leach facility and waste dump facility, for mine closure and
reclamation, and for geotechnical engineering aspects of the Amulsar project.
7. I have visited the property five times: in June 2011, in September/October 2011, in May
and November 2012, and in April 2013.
8. This is the third Technical Report I have co-authored on the mineral property in question.
9. As of the date of this certificate, to the best of my knowledge, information, and belief, the
Technical Report contains all scientific and technical information that is required to be
disclosed to make this report not misleading.
I:\11\81597-13\0100\0110 LTR\015-L1-Rev0\1138159713-015-L1-Rev0 AuthorCertKiel 20MAY13.docx

44 Union Boulevard, Suite 300
Lakewood, CO 80228 USA
Tel: (303) 980-0540 Fax: (303) 985-2080 www.golder.com
Golder Associates: Operations in Africa, Asia, Australasia, Europe, North America and South America
Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation

May 20, 2013

1138159713-015-L1-Rev0
10. I am responsible for the preparation of the Technical Report for the Heap Leach Facility,
Waste Dump Facility, Geotechnical Engineering for Plant Facilities, and the Preliminary
Closure and Rehabilitation Plan, as discussed in Sections 17 (17.2) and 18 (18.2.2 and
18.2.3), portions of Section 21 (21.5, 21.6, and 21.8), and Section 24. It should be noted
that the information for which I am responsible and that is contained in this updated
Technical Report references information contained in the 7 September 2012 Technical
Report for the Amulsar Project as updated on 26 November 2012. An updated feasibility
study is currently underway and due for completion in August 2013.
Sincerely,
GOLDER ASSOCIATES INC.
Richard E. Kiel, P.E.

Senior Geological Engineer
I:\11\81597-13\0100\0110 LTR\015-L1-Rev0\1138159713-015-L1-Rev0 AuthorCertKiel 20MAY13.docx
May 20, 2013
1138159713-015-L2-Rev0

Principal Geologist
Berkshire Sl6 1LD United Kingdom
RE:
CERTIFICATE OF AUTHOR PETER R. LEMKE
Dear Mr. Keller:

As a co-author of this Technical Report and Mineral Resource and Reserve Update on the Amulsar
Project for Lydian International Limited, St. Helier, Jersey, Channel Islands, I, Peter R. Lemke, do hereby
certify that:
1. I am the Water Treatment Technical Lead, and carried out this assignment, for Golder
Associates Inc., 44 Union Boulevard, Suite 300, Lakewood, Colorado 80228, USA, tel.
(303) 980-0540, fax (303) 985-2080, e-mail [email protected].
2. I hold the following academic qualifications:
B.Sc. (Chemical Engineering), Rose-Hulman Institute of Technology, USA,
1977-1981
M.Sc. (Ecological Engineering), Colorado School of Mines, USA, 1986-1989
3. I am a registered professional environmental engineer in Colorado.
4. I have worked as an environmental engineer on remediation and industrial water/wastewater treatment projects for 22 years.
5. I am familiar with NI 43-101 and, by reason of education, experience, and professional
registration, I fulfill the requirements of a Qualified Person as defined in NI 43-101. My
work experience includes 22 years as a consulting engineer for environmental
remediation and industrial wastewater treatment projects. Previous experience includes
laboratory research in alternative fuels, and industrial production. I am qualified to
prepare and review the engineering for the wastewater management and treatment
engineering aspects of the Amulsar project.
6. This is the third Technical Report I have co-authored on the mineral property in question.
7. As of the date of this certificate, to the best of my knowledge, information, and belief, the
Technical Report contains all scientific and technical information that is required to be
disclosed to make this report not misleading.
8. I am responsible for the preparation of the Technical Report for the Wastewater
Treatment Plant design, Sections 18.2.3.3, 18.2.3.4, and 21.7. It should be noted that
the information for which I am responsible and that is contained in this updated Technical
Report references information contained in the September 2012 Technical Report for the
I:\11\81597-13\0100\0110 LTR\015-L2-Rev0\1138159713-015-L2-Rev0 AuthorCertLemke 20MAY13.docx

44 Union Boulevard, Suite 300
Lakewood, CO 80228 USA
Tel: (303) 980-0540 Fax: (303) 985-2080 www.golder.com
Golder Associates: Operations in Africa, Asia, Australasia, Europe, North America and South America
Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation

May 20, 2013

1138159713-015-L2-Rev0
Amulsar Project and that inclusion in this report is primarily for information purposes. An
updated feasibility study is currently underway and due for completion in August 2013.
Sincerely,
GOLDER ASSOCIATES INC.
Peter R. Lemke, P.E.

Water Treatment Technical Lead
I:\11\81597-13\0100\0110 LTR\015-L2-Rev0\1138159713-015-L2-Rev0 AuthorCertLemke 20MAY13.docx
WardellArmstrongInternational
WhealJane,Baldhu,Truro,Cornwall,TR36EH,UnitedKingdom
Telephone:+44(0)1872560738Fax:+44(0)1872561079www.wardellarmstrong.com
CERTIFICATEOFQUALIFIEDPERSON
John Maxwell Eyre, Director, North Coast Consulting, Associate to Wardell Armstrong
International, Wheal Jane, Baldhu, Truro, Cornwall TR3 6EH, United Kingdom. Tel:
+44(0)1872560738Fax:+44(0)1872561079Email:[email protected]
I,JohnMaxwellEyre,doherebycertifythat:
1. I am an Associate Mining Environmental specialist for Wardell Armstrong International,
WhealJane,Baldhu,Truro,CornwallTR36EH,UnitedKingdom
2. This certificate applies to the Technical Report titled Amulsar Gold Project, Armenia,
Technical Report Mineral ResourceUpdate and Reserve Estimate For Lydian International
Limited (the Technical Report) with the effective date of 18 April 2013 for mineral
resourcesand28November2012formineralreserves.
3. Iholdthefollowingacademicqualifications:
RICS (Direct Entry Examinations) Minerals Surveying North Staffordshire Polytechnic, UK
19751978
4. I am a registered Fellow of the Royal Institution of Chartered Surveyors (Minerals and
Environment)MembershipNo.00058203,aMemberoftheInstituteofMining,Materials
& Metallurgy, a Member of the Institute of Quarrying, a Member of the Institute of
EnvironmentalManagementandAssessmentandaCharteredEnvironmentalist;
5. I have practiced my profession since 1978, and have been involved in the minerals
surveying and resource management profession for a total of 41 years. My work
experience includes 14 years in operations working at underground and surface mining
operations,16yearsasaSeniorLecturerattheCamborneSchoolofMines,Universityof
Exeter,8yearsasaconsultingminingenvironmentaldirectoronpreciousandbasemetals,
energy and industrial minerals. I am qualified to review and comment on the
environmentalandsocialmattersrelatingtotheAmulsarProject
6. I have read the definition of Qualified Person set out in National Instrument 43101
(NI43101) and certify that by reason of my education, affiliation with a professional
association (as defined in NI 43101) and past relevant work experience, I fulfil the
requirementstobeaQualifiedPersonforthepurposesofNI43101.
7. IamresponsibleforthepreparationofSection20oftheTechnicalReportandjointlywrote
Sections1,24and25.
8. VisitedthepropertyinJune2011.
WardellArmstrongInternationalisthetradingnameofWardellArmstrongInternationalLimited,
RegisteredinEnglandNo.3813172
Registeredoffice:SirHenryDoultonHouse,ForgeLane,Etruria,StokeonTrent,ST15BD,UnitedKingdom
UKOffices:StokeonTrent,Cardiff,Edinburgh,GreaterManchester,Liverpool,London,
NewcastleuponTyne,Sheffield,Truro,WestBromwich.InternationalOffices:Almaty,Beijing
ENERGYANDCLIMATECHANGE
ENVIRONMENTANDSUSTAINABILITY
INFRASTRUCTUREANDUTILITIES
LANDANDPROPERTY
MINING,QUARRYINGANDMINERALESTATES
WASTERESOURCEMANAGEMENT
9. I have not had any involvement with the property that is the subject of the Technical
Report prior to my engagement as a Mining Environmental Specialist Consultant on
technicalmatters,theresultsofwhichformpartoftheTechnicalReport.
10. IamindependentofLydianInternationalLimitedasdescribedinSection1.5ofNI43101.
11. I have read NI 43101 and Form 43101F1, and Sections 1, 20, 24 and 25 of the
TechnicalReporthavebeenpreparedincompliancewiththatinstrumentandform.
12. AsoftheeffectivedatesoftheTechnicalReport,tothebestofmyinformation,knowledge
and belief, Sections 1, 20, 24 and 25 of the Technical Report contain all scientific and
misleading.
Datedthe21stMay2013
JohnMaxwellEyreFRICSMIMMMMIQMIEMACEnv
Director,
NorthCoastConsultingLimited
AssociateofWardellArmstrongInternationalLimited
I, Joseph M. Keane, P.E. do hereby certify that:

1.
I am an Independent Mineral Processing Engineering Consultant for:

SGS Metcon/KD Engineering
7701 N. Business Park Drive
Tucson, Arizona 85743
Telephone: 520-579-8315
Fax: 520-579-3686
E-Mail: Joseph.Keanesgs.com
2.
This certificate applies to the Technical Report titled Amulsar Gold Project, Armenia, Technical
Report Mineral Resource Update and Reserve Estimate For Lydian International Limited (the
Technical Report) with the effective date of 18 April 2013 for mineral resources and 28
November 2012 for mineral reserves.
3.
I graduated with a degree of Bachelor of Science in Metallurgical Engineering from the

Montana School of Mines in 1962. I obtained a Master of Science in Mineral Processing
Engineering in 1966 from the Montana College of Mineral Science and Technology. In
1989 I received a Distinguished Alumni Award from that institution.
4.
I am a member of the Society for Mining, Metallurgy, and Exploration, Inc. (SME
#1682600) and the Instituto de Ingenieros de Minas de Chile. I am a registered
professional metallurgical engineer in Arizona (#1 2979) and Nevada #5462).
5.
I have practiced my profession since June 1962, and have been involved in metallurgical
engineering for a total of 51 years.
6.
I have read the definition of Qualified Person set out in National Instrument 43-101 (NI 43-101)
and certify that by reason of my education, affiliation with a professional association (as defined in
NI 43-101) and past relevant work experience, I fulfil the requirements to be a Qualified Person
for the purposes of NI 43-101.
7.
I am responsible for the preparation of a portion of Section 1; Sections 17, 18, 19, 23; portions of
Sections 21 and 22; and jointly Sections 24 and 25 of the Technical Report.
8.
I visited the property between 21 and 28 May 2011.
9.
I have not had any involvement with the property that is the subject of the Technical Report prior
to my engagement as a Principal Metallurgical Engineer relating to technical matters, the results
of which form part of the Technical Report.
10.
I am independent of Lydian International Limited as described in Section 1.5 of NI 43-101.
11.
I have read NI 43-101 and Form 43-101 Fl, and Sections 1, 17, 18, 19, 21, 22, 23, 24 and 25 of
the Technical Report have been prepared in compliance with that instrument and form.
SGS North America Inc.

Page 1 of 2
SGS Metcon/KD Engineering

7701 North Business Park Drive Tucson, AZ 85743
t (520) 579.8315
f (520) 579.7045
www.sgs.com
Member of SGS Group
12.
As of the effective dates of the Technical Report, to the best of my information, knowledge and
belief, Sections 1, 17, 18, 19, 21, 22, 23, 24 and 25 of the Technical Report contain all scientific
and technical information that is required to be disclosed to make the Technical Report not
misleading.
Dated 17.._
Ir:4
ONMS
Josph M
Pri ipal Metallurgical Engineer
SGS North Amenca Inc.

Page 2 of 2
SGS MetconlKD Engineering

7701 North Business Park Drive Tucson, AZ 85743
t (520) 579.8315
f (520) 579.7045
www.s9s.Com
Member of SGS Group

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AMC Consultants (UK) Limited

Registered in England and Wales

+44 1628 778 256

AMULSAR GOLD PROJECT

TECHNICAL REPORT MINERAL RESOURCE UPDATE AND RESERVE ESTIMATE UPDATE

Effective Dates of Report:

LYDIAN INTERNATIONAL LIMITED

DATE AND SIGNATURE PAGE

G David Keller, P.Geo.

Gary Patrick, MAusIMM CP (Met)

Herb Welhener, MMSA-QPM

Richard E. Kiel, P.E.

Peter R. Lemke, P.E.

John Maxwell Eyre, CEnv

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

Exploration and Data Management

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

Mineral Resource Estimate

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

Quality and reliability of raw data (sampling, assaying, surveying).

Confidence in the geological interpretation.

Number, spacing, and orientation of intercepts through mineralized zones.

Knowledge of grade continuities gained from observations and geostatistical

The likelihood of material meeting economic mining constraints over a range of

Gold mineralization at the Amulsar deposit is characterized by short-range continuities,

Pit slope angle of 45 degrees

Gold price assumption of $1,200 per troy ounce of gold.

LYDIAN INTERNATIONAL LIMITED

Total Measured and

The effective date of the Mineral Resource Statement is 5 March 2013.

LYDIAN INTERNATIONAL LIMITED

Gold g/t Silver g/t Gold g/t Silver g/t

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

The policy, legal and administrative framework.

The Project design covering geographical, ecological, environmental, social and

Analysis of baseline environment and socio-economic, defined through detailed

LYDIAN INTERNATIONAL LIMITED

Defining the environmental and social impacts associated with Project

Incorporating mitigation measures into detailed design to eliminate or minimize

Framework Mine Closure Plan and measures for post-mining management.

The findings of the draft ESIA concluded the following:

LYDIAN INTERNATIONAL LIMITED

LYDIAN INTERNATIONAL LIMITED

Initial cost (US$)

Closure and Reclamation

Waste Water Treatment Plant

Cash Operating Cost

Total Operating Cost (US$/oz)

LYDIAN INTERNATIONAL LIMITED

Table 1.4 Economic Highlights

Steady state annual gold production (Yr 1-3)

Steady state annual gold production (Yr 4-12)