The new estimate added a further 700,000 ounces of gold to the project’s total resource, which now stands at 3.2 million ounces.

FoxDavies said it had increased its price target for the Toronto-listed firm to C$5.25 following the upgrade.

“This is a fabulous result for Lydian and represents a 28% increase in total gold ounces.” 

The broker added that nearly 1 million ounces (Moz) had also moved up from the Inferred to the Indicated category, which is crucial as it will allow these ounces to be included in future feasibility studies.

“This impressive deposit continues to steadily grow in size as more drilling is completed and is still open in most directions. We expect that this will not be the last resource upgrade for the deposit,” FoxDavies added.

Tim Coughlin, Lydian’s chief executive, said it was a significant step in developing the resources at Amulsar but also added it was not the end of the story.

The updated resource statement comprised indicated resources of 68.2 million tonnes at 1.0 grams per tonne (g/t) gold and 36.1 million tonnes of inferred resources at a grade of 0.9 g/t.

This gives Amulsar 2.1 million ounces of contained gold in the indicated category and 1.1 million ounces in the inferred.

Lydian currently owns 95% of Amulsar with an option to purchase the remaining 5%.

The new estimate adds a further 700,000 ounces of gold to the project’s total resource, which now stands at 3.2 million ounces. 

“This is clearly another significant step in resource development at Amulsar but it is not the end of the story," said chief executive Tim Coughlin.

"Despite 90,000 meters of drilling the resource remains open in all directions. 

"Add to that the largely untested potential at newly identified prospect areas such as Orontes which is about a kilometre away from the resource shell towards the southwest and this coming 2012 drill season should provide further excitement".

The resource upgrade follows 35,000 metres of drilling at the project. And it is made up of mineralisation from Amulsar's three most advanced deposits – Tigranes, Artavasdes and Erato.

Today’s updated resource statement comprises indicated resources of 68.2 million tonnes at 1.0 grams per tonne (g/t) gold and 36.1 million tonnes of inferred resources at a grade of 0.9 g/t.

This gives Amulsar 2.1 million ounces of contained gold in the indicated category and 1.1 million ounces in the inferred.

In Toronto Lydian shares gained C$0.10, or 4.2 per cent, to trade at C$2.47 a share.

Lydian International (TSE:LYD) is deferring a US$5 million payment owed to Newmont Mining in a move to strengthen its cash position and thus ensure it is fully funded for the immediate next stage of developing its Amulsar gold project in Armenia.

Lydian took full control of Amulsar by buying out its joint venture partner Newmont, and the payment in question was initially scheduled to be made on December 11 2011. 

It has now notified Newmont that, in line with the purchase agreement between the parties from February 2010, Lydian is deferring the payment by a year until December 31 2012, and the sum will bear an annual interest of 10 percent until paid.

President and chief executive Tim Coughlin said: "Our decision to defer making this payment strengthens the company's cash position and ensures that the company has sufficient funds to meet all of its budgeted operational needs for a period extending beyond April 2012 when delivery of a bankable feasibility study for Amulsar is expected.

"This decision gives us added flexibility to properly assess our production financing options for the Amulsar project and continue our progress toward planned production," he added.

The Amulsar project has a total gold resource of 2.5 million ounces which is open in all directions. Lydian hopes to increase that beyond 3 million ounces with the latest drill programme.

The company plans to mine from one open pit from the Tigranes and Artavasdes areas of the project, as well as a separate open pit for Erato in the north. The costs are expected to be comfortably mid-curve at US$419 an ounce to around US$499 – which means the economics are fairly robust.

The preliminary feasibility study said the company could mine Amulsar for seven years, starting initially at 123,000 ounces a year and ramping up to 256,000.

However that was based on mineable material of around 1.64 million ounces.

"This decision gives us added flexibility to properly assess our production financing options for the Amulsar project and continue our progress toward planned production," he added.

The Amulsar project has a total gold resource of 2.5 million ounces which is open in all directions. Lydian hopes to increase that beyond 3 million ounces with the latest drill programme.

The company plans to mine from one open pit from the Tigranes and Artavasdes areas of the project, as well as a separate open pit for Erato in the north. The costs are expected to be comfortably mid-curve at US$419 an ounce to around US$499 – which means the economics are fairly robust.

The preliminary feasibility study said the company could mine Amulsar for seven years, starting initially at 123,000 ounces a year and ramping up to 256,000.

However that was based on mineable material of around 1.64 million ounces.

Amulsar is a high sulphidation-style gold project that currently hosts an indicated resource of 1.1 million ounces at 1.1 grams per tonne of gold as well as an inferred resource of 1.4 million ounces at 0.9 grams per tonne.

Lydian said that the 99-metre four grams per tonne section was found after infill hole DDA-223 was drilled at the Tigranes part of the project. Step-out holes RCA-442, RCA-443 and RCA-454 were drilled along the north-western edge of the resource at Tigranes and intersected 30 metres at one gram per tonne, 52 metres at 0.9 grams per tonne and 21 metres at one gram per tonne respectively.

In all, results have been received from 22 combined diamond and reverse circulation drill holes at Amulsar, with 12 of these resulting in notable intersections.

“Drill hole DDA-223 has returned one of the most exciting intersections yet at Amulsar,” said Tim Coughlin, Lydian’s President and CEO.

"It appears to have drilled into a steep plunging intersection zone where northeast and northwest trending faults and fractures link and interact. In that sense it is quite similar to northwest Artavasdes where long intersections of higher grades and a significant proportion of resource ounces have also been intersected. We have now released 92.7 per cent of our 2011 drilling results, with geological modelling and work on the resource update currently underway and expected to be complete in early 2012."

Lydian International (TSE:LYD) today unveiled step-out drill results from the Amulsar gold project, in Armenia, which it says outlines the potential for resource extensions around 500 metres to the northwest of the Tigranes prospect.

Today’s drill results come from the latest 29 holes drilled at Amulsar. One of the holes, targeting the northwest trending Artavasdes fault, intersected 101 meters at 2.2 gram per tonne gold, from surface. 

Overall among the other drill highlights Lydian intersected mineralisation with lengths ranging from 10 to 101 metres, with grades between 0.9 to 2.2 grams per tonne gold.

"This is another solid set of drill results that confirm the geologic model and quite clearly extend resource potential towards the northeast and southeast at Amulsar" chief executive Tim Coughlin said. 

"So far this year we have drilled a total of 34,500 metre and released results from approximately 70 per cent of these drill meters. 

“We are well on track to complete in excess of our proposed 40,000 metre programme ".

Lydian emphasised that the Artavasdes fault is now a ‘well constrained higher-grade fault-breccia structure’ and it should contribute to an overall increase in resource grade for the Artavasdes area. 

Furthermore it said that the resource also remains open along the mapped trace of the Artavasdes fault structure, towards the southeast in the Arshak area.       

It added that the exploration drilling to the northeast of Tigranes has amplified the potential for additional resource ounces in this area, for at-least a further 500 metres from the limits of the current pit-shell. 

Lydian International (TSE:LYD) today reported that the land the hosts the Amulsar gold project has now been reclassified as industrial land, as opposed to agricultural land.

In a stock exchange statement the company said that this change of land status is a significant step in Armenia's mine permitting process. 

Lydian chief executive Tim Coughlin said: "This is a major event for us and an indication of Armenia's willingness to support foreign investment. 

"We remain on schedule with our aim to be in production in 2014 and this approval means the Company can commence construction, pre-stripping and stockpiling of run of mine ore as scheduled in 2012". 

Lydian explained that two regional governors and eight separate government ministries were involved and cleared the company's land status change application, and this was subsequently submitted this to the Prime Minister's office. 

The land status change at Amulsar applies to the Company's current mining license surface allocation area which incorporates the proposed open pit area at Tigranes and Artavasdes and also covers pit extension areas at Erato and Arshak, Lydian added. 

Indeed, National Bank Financial issued an equity research report covering the space last week, initiating coverage on four "attractively valued, quality, emerging" developers, including Prodigy Gold (CVE:PDG), Lydian International (TSE:LYD), Astur Gold (CVE:AST), and Grayd Resource Corp (CVE:GYD), which just today was announced to be the target of a $275 million takeover transaction by Agnico-Eagle Gold Mines (TSE:AEM) (NYSE:AEM).

"With gold prices at unprecedented levels, we believe our attractively valued initiating companies are well positioned to garner further upside and potentially benefit from expected industry consolidation and increased equity available to small and mid-cap companies," National Bank said.

"Given the limited supply of assets in the global development pipeline, we believe quality assets which can meet a number of criteria...could be in high demand not only to investors but also junior and mid-tier producers looking to consolidation as a way to attract higher multiples and fill gaps in production growth profiles."

All four junior companies were given an "outperform rating", with price targets well above current trading levels, as they were lauded as being modestly valued, with projects having a "respectable mine life", low risks to advance, and strong potential for resource and production growth.

Prodigy Gold, for example, with a price target of $0.85, is definitely a prime takeover candidate. Since acquiring its Magino gold project near Wawa, Ontario in lat 2010, the company has outlined a more than 1.5 million ounce mineable gold resource, and completed a preliminary economic assessment for a simple open-pit, carbon-in-leach project.

The economic study outlined strong baseline economics, said National Bank, with a pre–tax net present value of  $351 million and a 49% internal rate of return (IRR), considering a long–term gold price more than 20% below three–year trailing prices. Project valuations are also expected to increase in the near term, as Prodigy completes additional drilling and technical studies.

"We expect additional upside could come from consideration of increased resources, increased annual throughput, reduced stripping ratio and consideration of a SAG mill," explained the report.

Existing surface infrastructure in the area will also benefit project development, with an expected positive permitting decision on an accelerated timeline.

Lydian International is another with solid prospects, being given a $4.00 price target, up from its $3.15 trading price. The company's Amulsar project is a self-generated discovery made in 2006, and with the completion of this year's 40,000 metre drill program, Lydian will have conducted nearly 100,000 metres of drilling in less than four years, and defined a resource which National Bank believes could top three million ounces of gold shortly. Currently, resources are defined at 2.5 million ounces, with the deposit remaining open in all directions.

Amulsar's all–oxide resource is also amenable to low–cost heap leach processing and is well positioned to advance to the development stage within the next year, with initial economics outlining a pre-tax net present value of $493.6 million and a pre-tax IRR of 39.5%, using a base case gold price of US$1,200 per ounce of gold.

"The incorporation of updated technical data (drill results, metallurgy and geotechnical data) in the near term and further exploration at the property over the next 12–18 months could lead to enhanced economics," National Bank added.

The next on the list of emerging junior developers is Astur Gold, whose Salave project in northwestern Spain is "much better positioned" to move forward to production than it was under previous owners. The property is one of Europe's largest and highest grade gold deposits, but it hasn't seen production since the Roman Era as a result of the introduction of developement restrictions for open pit mines.

However, Astur’s work, including a renewed development approach that addresses restrictions, has shown that Salave has the potential to generate attractive returns as an underground mine, National Bank said, forecasting a 131,000 ounce per year project with a 10-year mine life, and US$590 per ounce cash costs. Astur also has support from local communities, amid a major negative shift in the Spanish economy over the last five years.

National Bank Financial anticipates Astur, witha  $3.30 price target, will be on track for production in the second half of 2014, with a positive permitting decision expected to rapidly erase the junior miner's trading discount to its peers.

Last, but certainly not least, National Bank was proved correct in picking Grayd Resource Corp, which this morning announced it will be bought by Agnico-Eagle Mines. The $2.15 price target assigned to the Vancouver-based resource company was even below the $2.80 price tag Agnico-Eagle offered.

With the potential for Grayd's La India project in Sonora, Mexico already proven, the Tarachi project, which lies about 10 kilometres north of La India, is the company's "lottery ticket" to valuation upside, National Bank noted, with less than 6% of a 10 square kilometre potentially mineralized area having been tested. With an initial resource expected in 2012, the property is seen to be a starting point of a potentially sizable multi-million ounce resource.

La India, which has been deemed well positioned to move into the feasibility and construction phases, has a mineable resource topping one million ounces of gold, with a pre-tax net present value of US$187 million, and a pre-tax IRR of 51%, assuming a gold price of US$950 per ounce, and a 5% discount rate. Project economics are expected to receive a boost on the reflection of higher gold prices, with first production anticipated in late 2014 or early 2015.

Grayd CEO, Marc Prefontaine, commented today on the company's transaction with Agnico-Eagle in a statement: "Our Mexican properties have advanced to the stage that it is time for us to join with a fully funded and well established mine builder like Agnico-Eagle for their final stage of development into gold mines."

Indeed, with operating cash flows increasing for senior and mid-tier producers over the mid-term, but organic production growth estimated to expand at a much slower pace, Prodigy Gold, Lydian International and Astur Gold could be next on the takeover target list.

Lydian International (TSE:LYD)  chief executive Tim Coughlin today emphasised the group’s success as it continues working towards the next upgrade to its gold resource at the Amulsar project in Armenia.

Alongside the release of drill results for a 32 holes at Amulsar, Coughlin said: "Resource conversion and resource extension drilling is proceeding well at Amulsar with our better understanding of the geometry leading to more efficient resource conversion drilling and to exciting intersections that systematically extend the resource beyond its current limits. 

"We have a new insight now into the structures that host gold grade and can see them extending for some distance and away from the current resource in all directions. 

Most importantly, with the deeper drill holes we are drilling this year it is very clear that in some mineralized structures the gold grade remains strong at depth meaning that eventually a high-grade underground resource accessible via decline from the bottom of the proposed pit or from an adit on the hillside may need to be considered."

Today’s drill results come primarily from infill and step-out drilling from the Tigranes and Artavasdes areas of the Amulsar project.

The best drill results from the Tigranes area had lengths between 17 and 63 metres and grades from 1 to 2 grams per tonne gold. Meanwhile at Artavasdes intersection ranged from 10 metres to 156 metres, grading between 1 and 1.3 grams per tonne gold.

A number of holes, reported today, also came from the Arshak area – an area to the east of Artavasdes and Tigranes – here Lydian cut intersections with lengths of 11-25 metres grading 1 to 1.1 grams per tonne gold.

Amulsar currently hosts a 2.5 million ounce gold resource and it is still open in all directions. 

In July, the firm unveiled the positive findings of a preliminary economic assessment (PEA) covering the Tigranes and Artavasdes areas of Amulsar. These areas host 1.64 million potentially minable ounces of gold, and the assessment gave the areas a net present value (NPV) of US$515 million – using a US$1,200 gold price.

The PEA showed that Tigranes and Artavasdes could provide annual gold production of 123,000 ounces in the first three years rising to 256,000 ounces in year four through to year seven. The economic assessment put the mine's cash costs at US$419-499 per ounce while the mine would have an initial capital cost of US$162.6 million and it would have an internal rate of return of 45 percent.

This economic assessment was subsequently followed up with further analysis known as a trade-off study.

Last week the company told investors that detailed engineering work, a bankable feasibility study and a new resource estimate will be combined into one definitive study in the first half of next year.

Lydian International (TSE:LYD) reported Tuesday more drilling results from its Amulsar gold project in Armenia, indicating further potential to expand the current resource towards the northeast and southeast. 

Amulsar is a high-sulfidation style gold project, which currently hosts a combined indicated and inferred resource of 2.5 million ounces, at 1.0 grams per tonne (g/t) of gold. 

Results from 39 drill holes were reported on Tuesday, comprising mainly infill and step out holes from the Tigranes area in the northeast, and southeast along the Artavasdes fault at Arshak.

Notable intersections included 98 metres of 1.5 g/t gold from surface in hole RCA-369, which targeted northeast-trending faults along the northwestern edge of Tigranes, the company said. 

Nearby drill holes RCA-353, which returned 72 metres at 1.0 g/t gold, and RCA-352, which intercepted 10 meters at 1.0 g/t and 20 metres at 1.0 g/t gold, also intersected gold from surface. 

The company said these results now outline a significantly larger area of near-surface and proposed "starter pit" material at Tigranes, strengthening overall project economics. 

Further drilling at Tigranes will be aimed at extending the resource along-strike to the northeast, within immediate reach of the current pit design. The program will also aim to fill in the gap between the bulk of the drilling and step out drill hole RCA-292, which intersected

17 metres at 1.6 g/t gold last year, some 500 metres northeast of the resource shell.

"Northeast Tigranes has the potential to significantly increase the current resource and expand the pit shell down-slope thus reducing overall stripping ratio," Lydian said in a statement. 

Meanwhile, at Arshak, step out holes were drilled some 100 metres east of the proposed pit. 

Hole RCA-371 intersected 19 metres at 1.0 g/t gold along what appears to be a further strand of the 1.2 kilometer long west-northwest trending Artavasdes fault, the company said.

"This is a further sound set of results from Amulsar" said president and CEO, Tim Coughlin.

"As drill results are returned, the geologic and resource model  is updated in readiness for the resource update and in order for it to be dove-tailed with the ongoing bankable feasibility study scheduled for Q1 next year."

Aside from Amulsar, gold explorer Lydian is focused on Eastern Europe, with a pipeline of early-stage gold and base metal exploration projects in the Caucasus regions.

In Toronto, Lydian's shares moved higher by 2.5% to trade at $2.47 on Tuesday as of 12:03pm EDT.

Earlier this week Lydian unveiled the positive findings of a preliminary economic assessment (PEA) for two areas of the Amulsar project. It was yet another boost for the impressive 2.5 million ounce gold project and more drilling is scheduled this summer.

Broker FoxDavies hailed as “exciting” yesterday’s announcement from Armenia-focused gold explorer Lydian International (TSX:LYD) about drilling results at its Amulsar project in the country.

The Amulsar gold project covers a region of high-sulphidation, epithermal-type gold mineralisation located in central Armenia. It hosts a Canadian Institute of Mining-compliant combined indicated and inferred category resource of 2.5 million ounces at one gram per tonne of gold.

Interim results have been received from 23 drill holes, comprising primarily infill and resource extension drilling from the western extent of the contiguous Tigranes and Artavasdes areas, and these results are encouraging, according to the company.

They include a drill hole (DDA-096) that intersected 69 metres at one gram per tonne of gold from surface, one (RCA-308) that intersected 55 metres at 1.6 grams per tonne and another (RCA-306) that intersected 55 metres at 1.1 grams per tonne.

Although describing the results as “a bit of a mixed bag for Lydian”, FoxDavies said that the infill drilling at Tigranes and Artavasdes, which continues to show long interceptions at good grades, “add to the confidence of the current resource and vindicates the current geological thinking for those deposits”.

“We are particularly pleased with the fact that mineralisation starts at relatively shallow depths along the western edge of Artavasdes... which should have a dramatic effect on the strip ratio,” said the broker. “We continue to be very positive about the Amulsar project.”

However, FoxDavies added that the “disappointing results” from drilling centred within Erato, as well as from wildcat drilling to the south west of Artavasdes, show that it is not all plain sailing for the firm. “The geological model surrounding the wildcat drilling will have to be revised based on this drilling in order to confirm whether it is a significant feeder zone to the main body of mineralisation,” the broker said.

FoxDavies said that it maintained its ‘buy’ recommendation with an unchanged 12-month price target of C$3.84 per share.