Lydian International is a mineral exploration and development company with expertise and a proven track record in discovering and developing new gold projects in unfamiliar and frontier settings. The Company is currently focussed on developing its Amulsar gold discovery in southern Armenia. The Amulsar project was a new discovery made by Lydian in 2006 and is currently advancing towards Bankable Feasibility in Q2 2012 with full production expected in the first half of 2014. A recent resource update shows that Amulsar hosts a 3.2 million ounces gold deposit comprising a total of 1.7 million ounces gold in the indicated category and 0.6 million ounces gold in inferred category (using a 0.4g/t cut-off) from the contiguous Tigranes and Artavasdes areas and 0.5 million ounces gold in the indicated category and 0.4 million ounces inferred category from the Erato prospect which is located approximately 900 meters to the north of Tigranes-Artavasdes

Lydian is also actively exploring elsewhere in Armenia and in other prospective regions of Eastern Europe where it is building and maintaining a promising portfolio of early stage pipe-line projects. Lydian has a strong social agenda and a unique understanding of the complex political backdrop to the region in-which it operates. Lydian develops its projects responsibly with exceptional emphasis on social and environmental awareness and care. The company minimises environmental impact and engages local communities in order to deliver relevant and sustainable social development initiatives.

Lydian’s largest shareholder is the International Finance Corporation (IFC; part of the World Bank Group). The European Bank for Reconstruction and Development (EBRD) is also a major shareholder in the Company. The IFC and EBRD provide Lydian with influential in-country support and valuable advice to manage environmental, social and governance risks. This bolsters Lydian's competitive advantage in securing and retaining high quality assets in prospective unfamiliar and frontier settings. Other major shareholders include a number of North American and European natural resource institutional investors.

Lydian's corporate strategy is geared to identifying and rapidly advancing high quality projects to key decision points where it will:

• Put the project into production 

• Seek a production partner and retain equity ownership from a producing mine 

• Spin-off advanced projects at feasibility 

Key Value Drivers

• Growing gold resources at Amulsar 

• Low cost production scenario at Amulsar 

• Pipe line of promising early stage projects 

• Positive macro-economic outlook for gold 

Potential Future Catalysts

• Drilling program of 25,000m planned for 2012

• Permitting milestones (to be fully permitted by Q2 2012)

• BFS to be completed by Q2 2012 

• Detailed engineering Study to be completed by Q4 2012 

• Production planned for Q2 2014  

To view 2011 press releases please click here

Lydian continues to focus on its flagship Gold Project - Amulsar is Southern Armenia.

Amulsar - Overview

The Amulsar project covers a region of high-sulphidation, epithermal-type gold mineralisation located in central Armenia and discovered by Lydian in 2006.

In March 2009, Lydian released an NI-43101 compliant inferred resource of 1M ounces at the project. This was increased in March 2010 to an NI-43101 compliant inferred resource of 1.4M ounces. The project resource remains open in all directions.

The licences are held 100% by Geoteam, an Armenian registered closed joint stock company. Geoteam CJSC is owned 100% by Lydian Resources Armenia (a wholly owned subsidiary of Lydian International Limited).

Amulsar is a completely new discovery. Gold was first discovered in 2006. In 2006 and 2007 soil geochemical analyses identified an area of 3.5 by 0.5 km with a one square kilometer core of values exceeding 0.1 g/t gold, including localised high-grade soil samples of up to 2.13 g/t gold

Amulsar - Location, Access and Infrastructure

The Amulsar gold project is located in the south of Armenia on the border between the provinces (Marz) of VayotsDzor and Sunnik only 176km away from the capital, Yerevan. Lydian holds two Special Exploration Licences and a small mining licence over Amulsar through its 100% owned Armenian subsidiary Geoteam CJSC. The Amulsar licences cover a total of 113km2.

The Amulsar gold project is well located in terms of infrastructure. The main tarmac road between the Armenian capital of Yerevan and the south of the country passes some 4km to the south of the project, and the main road is flanked by high tension electricity lines. A further tarmac road passes to the west and north of Amulsar serving the small town of Jermuk. Water is available from the Vorotan River and the Spandaryan reservoir (3km east and 8km south east respectively). A major gas pipeline between Iran and Yerevan is currently in the final stages of construction and passes some 4km to the east of Amulsar. A fibre optic internet cable was laid during 2010 and a small hydro-electric plant is currently under construction on the Vorotanriver both of which are 4km north east of Amulsar. There are several small towns and villages in the vicinity from where Lydian and its contractors source local labour.

Amulsar - Exploration

Amulsar is a completely new gold discovery and was discovered in 2006. During 2006 and 2007 initial soil geochemical analyses identified an area of 3.5km by 0.5km which became the focus for future drilling. Further infil soil sampling was undertaken in 2010 and increased the area of gold mineralization to 3.6 km by at-least km. The soil data clearly identified the Tigranes, Artavasdes and Erato target areas as well as identifying further drilling targets and extensions.

Amulsar is a high-sulphidation, epithermal-type gold deposit. Lydian commenced drilling on Amulsar in 2007 and by March 2009 a maiden inferred resource of 1M ounces was released. This was increased in to 1.4M ounces of inferred resource in March 2010.

In 2007 five scout diamond drill holes totalling 593m were drilled. These were followed in 2008 by a further 18 diamond holes and 74 RC holes totalling 13,048m (2685m diamond, 10,363m RC). During 2009 Lydian drilled a further 8 diamond holes and 101 RC holes totalling 13,536m (1090m diamond, 12,446m RC). The 2010 drilling season proved to be very successful with 60 diamond holes and 129 RC holes being completed totalling 25,322m, which included metallurgical and water monitoring holes (8,286m diamond, 17,036m RC).

Lydian’s drilling campaigns since 2007 have now defined a robust resource area on Tigranes and Artavasdes which has the potential to form a large open pit mining operation. The drilling has also outlined a further area of mineralisation at Erato. The structural and geological trends identified from drilling and surface mapping, combined with the soil geochemistry, have outlined further significant exploration potential, particularly in the Tigranes North, Tigranes East, Artavasdes West, Artavasdes South and Arshak areas (see map). All of these areas were targeted as part of a 40,000 meter drilling program 2011 and will be continued in the 2012 drilling program of 25,000 meters.

Highlights from the 2010 drilling program include the following resource infill and extension holes at Artavasdes and Tigranes;

• DDA-047 (Artavasdes) 24 meters at 7.4 g/t gold, 

• DDA-066 (Artavasdes) 67 meters at 1.7 g/t gold, 

• RCA-191 (Artavasdes) 52 meters at 1.8 g/t gold, 

• RCA-195 (Artavasdes) 84 meters at 4.9 g/t gold (EOH), 

• RCA-208 (Artavasdes) 95 meters at 1.3 g/t gold (EOH), 

• RCA-212 (Artavasdes) 86 meters at 2.7 g/t gold, 

• RCA-301 (Artavasdes) 40 meters at 5.6 g/t gold (EOH), 

• DDA-036 (Tigranes) 87 meters at 2.8 g/t gold, 

• DDA-076 (Tigranes) 89 meters at 1.9g/t gold, 

• RCA-177 (Tigranes) 112 meters at 1.0 g/t gold, 

• RCA-193 (Tigranes) 74 meters at 1.4 g/t gold, 

• RCA-198 (Tigranes) 51 meters at 2.3 g/t gold (EOH), 

• RCA-226 (Tigranes) 92 meters at 1.2 g/t gold, 

• RCA-258 (Tigranes) 69 meters at 1.7 g/t gold, 

Notable exploratory and step out results include;

• RCA-233 (Erato) 95 meters at 1.7 g/t gold, 

• RCA-280 (Erato) 85 meters at 1.2g/t gold, 

• RCA-281 (Erato) 186 meters at 1.1 g/t gold (EOH), 

• DDA-34 (Arshak) 34 meters at 1.0 g/t gold, 

• RCA-276 (Arshak) 53 meters at 1.0 g/t gold, 

• RCA-284 (Artavasdes W) 29 meters at 1.0 g/t gold, 

• DDA-58 (Tigranes E) 40 meters at 1.2 g/t gold, 

• RCA-220 (Tigranes E) 37 meters at 1.2 g/t gold, 

• DDA-61 (Tigranes N) 23.6 meters at 1.1 g/t gold (EOH), 

• RCA-292 (Tigranes N) 14 meters at 1.6 g/t gold, 

Amulsar - Geology

The Amulsar high sulphidation gold deposit is situated in central Armenia and hosted in a sequence of Eocene-Oligocene volcanic and volcano-sedimentary rocks of basaltic to dacitic composition. Episodic fault activity and high level magmatism has been responsible for the development of multi-stage phreatic and hydrothermal breccias, hydrothermal alteration and gold mineralisation.

The principal host rocks are a series of hydrothermal and phreatic breccias intruded into bedded, sub-horizontal lava flows, ignimbrites and pyroclastics. An impermeable and predominantly barren andesite sill intruded within the volcanic pile has formed a ‘trap’ for mineralising fluids, particularly at Artavasdes and Erato, where gold mineralisation has ponded at and beneath the contact. Multi-stage acid-leaching hydrothermal alteration events have produced widespread texturally destructive silicification, with vuggy textures developed locally.

The deposit is located in a structurally complex zone adjacent to what is interpreted to be a large caldera ring structure immediately to the east of the deposit. There are two dominant structural trends observed: north east-south west striking normal faults, and north west-south east striking sinistral (left-lateral) strike-slip faulting; both of which have acted as conduits for mineralising fluids and host high grade gold mineralisation.

The resulting architecture of the deposit has localised high grade gold mineralisation in numerous sub vertical structures and breccias within a large tonnage of lower grade gold mineralisation hosted by tabular, porous stratigraphy.

(Click here to enlarge image)

Amulsar - Feasibility Studies

Lydian has already undertaken several studies which indicate that the Amulsar deposit will be economic. These include the following:

Scoping Study – March 2009

Golder Associates, in conjunction with KD Engineering, undertook a scoping level study on the feasibility of a heap leach mining operation at Amulsar. The study assumed a 1Moz resource and an ore grade of 1g/t with metallurgical recoveries of 94% which were based on the information available at the time. An estimated stripping ratio of 0.64 was assumed for two resource scenarios;

i) “run-of mine”(no crushing or screening required) and 

ii) A process route requiring crushing and screening.

The study suggested that the Amulsar project would require low capital and treatment costs. 

Amulsar - Metallurgy

Lydian has completed three phases of metallurgical test work on the Amulsar project.

Initial heap leach amenability bottle roll tests on drill core and gravity concentrates were completed by SGS Lakefield in August 2008. These showed very high gold extractions of 94% to 97%. For all tests a gold recovery of 90% was established after only 8 hours and reached 95% after 24 hours.

In March 2010, SGS Mineral Services UK completed a series of bottle roll and column leach tests in order to test the amenability of the Amulsar deposit to heap leach processing. The test work was conducted on three different ore composites at different size fractions. The bottle roll tests returned gold extractions in excess of 89% over a 14-day test period with high levels of gold extraction reaching a minimum of 80% recovery of gold to leachate after 24-48 hours. The column leach tests on 19mm composites returned gold extractions of 89.1%, 88.6% and 76.5% over a 70 day leach period. Recovery trajectories indicated that gold was still being extracted in all composites and that two of them were likely to exceed 90% extractions after further leaching. 140 day column leach tests on 38mm ore fractions produce similar recoveries, but over longer time periods.

In January 2011, Wardell Armstrong International completed a further program of laboratory bottle roll and column leach test work on drill hole samples from the Amulsar project. Two of the composite samples originally tested by SGS Minerals Services UK Ltd were re-tested using a wider range of crush sizes and solvent concentrations. The test results concluded that the cost-optimized crush size for Amulsar gold mineralization is probably 19mm and the optimum solvent concentration is 0.05%. Using these parameters gold recoveries of 93.5% and 93.1% were achieved. Initial column leaching was exceptionally rapid for both samples with up to 80% gold being recovered after seven days of leaching.

Gordon Wylie  - Non-Executive Director and Chairman of the Board 

BSc (hons) Geology, Grad Dip Mining Engineering, Management Diploma (UNISA)

Mr. Wylie has 31 years of mining industry experience. From 1998-2005, he was AngloGold-Ashanti’s Global Exploration Manager. Mr. Wylie was instrumental in developing the company’s “New Frontiers Strategy”, and AngloGold-Ashanti’s move into highly prospective but poorly prospected higher risk regions such as DRC, Colombia, China and Laos.

Dr. Timothy Coughlin - President and Chief Executive Officer 

BSc Geology, MSc Exploration and Mining Geology, PhD (structural geology)

Dr. Coughlin has 20 years of wide-ranging experience as an exploration and mining industry consultant and has held senior positions with major mining companies. Dr. Coughlin is a specialist in frontier mineral exploration and on mining investment in emerging and transitional environments. He has provided advice on conducted country entry programs in the Caucasus, the Balkans, Colombia and Russia and has been integral in new and now operating grass-roots gold discoveries in South America and Australasia.

Roderick Corrie - Chief Financial Officer and Executive Director 

MA Cambridge, ACIB, MSI

Mr. Corrie is a strategic advisor with experience in a variety of companies. He has held both executive and non-executive roles in corporate finance, health, property, technology, advertising, investment and manufacturing companies. Mr. Corrie has held senior positions within the banking industry, he is an Associate of the Chartered Institute of Bankers and a Member of the Securities Institute. He is a non-executive director or the AIM listed Europa Oil & Gas PLC.

Marc C Henderson  - Non-Executive Director 

CFA

Mr. Henderson is the President and Chief Executive Officer of Laramide Resources Ltd. He is a chartered financial analyst with more than 20 years experience in the mineral exploration industry. Mr. Henderson has been President and Chief Executive Officer of Laramide Resources Ltd. from 1995 to present, and a director of Kinbauri Gold from 1994 to present and of Aquiline Resources Inc. from 1998 to present.

Peter Mullens - Non-Executive Director 

BSc Geology

Mr. Mullen has 21 years of extensive and varied experience in the mining and exploration industry. Mr. Mullen's experience includes geologist roles for Rio Tinto and Mt Isa Mines at Broken Hill, and Mt Isa in Australia. In addition he has worked as senior mine geologist and consultant in Asia and in several South and Central American countries. His track record includes successfully developing four Canadian listed exploration companies in chief geologist and company director roles.

Huw Williams 

Non-Executive Director 

BA, CFA, FCA, MBA

Mr Williams is a chartered accountant and chartered financial analyst with over 20 years of emerging market investment experience. He works in the corporate equity unit for the European Bank for Reconstruction & Development. Previous experience is over 10 years in private equity in Africa with Actis and the CDC Group plc. He also is a non-executive director of several other EBRD investments, and on the recommendations committee of the Kazakhstan Growth Fund.

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Updated from company website 03.10.11

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