Lydian International Ltd (TSE:LYD) has received more backing from the European Bank for Reconstruction and Development (EBRD) as it starts to build the Amulsar gold mine in Armenia.
The EBRD is to inject C$11.39mln at a price of 34c per share to take its stake in the company to 6.5% from 1.8%.
“We are pleased to have the ERBD's continuing support as we begin development of the Amulsar Gold Project.
“This investment provides further recognition of Lydian's commitment to good international industry practices and standards as we make the transition from developer to producer," said Howard Stevenson chief executive.
The EBRD has been a strategic investor in Lydian since 2009 through four previous private placements.
Representatives of the EBRD work continually with Lydian to develop and implement good international industry practices, including compliance with the framework embodied in the EBRD Performance Requirements.
Amulsar is expected to be the largest gold mine in Armenia, producing an average of 243,000 ounces of gold per year over an initial five years of operation.
Lydian said with a 10-year life-of-mine and total cash cost estimated at US$509 per gold ounce, Amulsar will be a highly profitable.
The first gold pour is expected within around 20 months from construction start.
The group agreed a comprehensive US$325mln financing package in late 2015 in a milestone deal, and construction capital is estimated at US$370mln.