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Lydian International wraps up C$15mln funding

Lydian International has tied up a crucial C$15 million funding deal to progress its Amulsar gold project in Armenia
Lydian International wraps up C$15mln funding
The deal could see Lydian bag a total of C$17.25mln

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 agreed with a syndicate of underwriters led by GMP Securities and Scotia Capital, and also including BMO Capital Markets and National Bank Financial, to place 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 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.

Amulsar has the potential to become a significant gold mine with a resource currently of more than 4 mln ounces of gold and 1.8 mln ounces of those at 1.1 grams per tonne (g/t) in the higher confidence measured category. The mineralisation is also open in all directions and at depth.

Research last year conducted by Canadian broker RBC for the company showed the project's projected total costs to be almost a third lower than the global average based on a 2012 feasibility study.

That study is in the process of being refreshed to incorporate restructuring of the mine layout and financial nmodelling before the project finally moves into development.

Lydian’s significant shareholders include the International Finance Corporation which is a member of the World Bank Group, and the European Bank for Reconstruction and Development.

Lydian shares closed at C$1.12 on Tuesday, up 8 cents.

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