Lydian International Limited, the 100% shareholder of Geoteam CJSC has announced that it has arranged a $325 million construction financing package to be provided by Orion Mine Finance (“Orion”) and Resource Capital Funds (“RCF”). Additionally on November 20 Lydian had announced value engineering results for Amulsar project with a pre-production capital costs decrease by 13% to $370 million and all-in sustaining costs decreaseby 17% to $585/oz of gold. Lower costs resulted, in part, from a decrease in the stripping ratio; the optimized layout and flow sheet leading to favorable reductions in consumables such as diesel, electricity and reagents; and a higher percentage of gold ounces recovered per tonne of ore mined and processed. This has significantly improved the economics of the project highlighting Amulsar as a competitive and attractive project for investors.
Howard Stevenson, President and CEO of Lydian International said: “This Financing is an important milestone in our commitment to all stakeholders to advance Amulsar to production. The economic enhancements from our recently announced value engineering work represented a major step toward our objective of optimizing project economics and underpinned the opportunity to complete this Financing. Orion and RCF are highly-respected mining finance investment funds, and over and above their financial commitments, each group brings added experience to our team.”
The Prime Minister of the Republic of Armenia said “The financing of the construction of the Amulsar Mine represents a significant step forward in the development of the mining industry in Armenia. The Government of Armenia is pleased that significant investors in the mining industry recognize Armenia as a mining investment destination. We look forward to the socio-economic contributions to Armenia that the Amulsar Mine represents.”
Hayk Aloyan, Managing Director of Geoteam CJSC said: “Mining industry experiences visible downturn in terms of commodity prices and project financing in the recent years. Especially in this light securing financing for Amulsar is a significant achievement. It highlights Armenia as an investment destination. The investment will flow into building a modern, well managed mine in Armenia, bringing significant economic benefits to the country and the communities around Amulsar.”
Orion Mine Finance is a mining-focused investment business with approximately $1.85 billion under management specializing in providing flexible capital investment solutions to mining companies in the base and precious metals sector. Orion has demonstrated capability in debt, equity, convertibles, offtake, streaming, and royalty investments. In addition, the Orion team has experience in the physical metals markets, such as facilitating the purchase, metal financing, transporting, processing and selling of a mine’s output to end customers.
Resource Capital Funds is a private equity firm established in 1998 with a mining sector specific investment mandate spanning all hard mineral commodities and geographic regions. Since inception, RCF has supported 142 mining companies, with projects located in 45 countries and across 29 commodities. RCF is currently investing its sixth fund with committed capital of $2.04 billion. Further information about RCF can be found on its website (www.resourcecapitalfunds.com).
RCF has a strong team of technically diverse investment professionals, with wide ranging industry expertise and demonstrated history of investments in mining globally. RCF’s track record is based on its ability to pick technically and commercially compelling assets and support management to achieve desired outcomes whilst remaining throughout a source of patient capital. RCF aims to partner with companies to build strong, successful and sustainable businesses and in doing so strives to earn superior returns for all shareholders.
In addition to the commitments from Orion and RCF, Lydian continues to have prominent investors that include International Finance Corporation and the European Bank for Reconstruction and development. Lydian and Geoteam are committed to best practices in all aspects of its operations including production, sustainability, and good corporate citizenry.
18:17 December 03, 2015