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Lydian International (TSE:LYD) has tied up a crucial C$15 million funding deal to progress its Amulsar gold project in Armenia.

The company has entered into an agreement with a syndicate of underwriters led by GMP Securities and Scotia Capital, and also including BMO Capital Markets and National Bank Financial, to have them buy 15mln shares at C$1 each.

Lydian has also agreed to grant the underwriters an over-allotment option to buy up to 2.25mln more shares at the same price. This option can be exercised at any time, in whole or in part, on or before the date which is 30 days after the closing of the offering to cover over-allotments.

That would bring the total raised to C$17.25mln.

“The company intends to use the net proceeds of the offering are expected to be used to progress the company's Amulsar Gold Project in Armenia, including the completion of a bankable feasibility study and detailed engineering and for general working capital purposes,” it said in a statement.

The plan is to complete the environmental and social impact assessment (ESIA) of Amulsar in the second quarter of next year.

In November, the company said developing the site into a “profitable gold mining operation” would depend on its ability to “raise sufficient financing, acquire all permits and complete construction”.

The financing deal follows news of a changing of the guard at Lydian. Alacer Gold’s president and chief operating officer, Howard Stevenson, will take over as president and chief executive officer from Dr Tim Coughlin at the start of April.

February 03, 2014 at 14:05