A December 2017 photo of the Amulsar site, in Armenia.
It has been more than a month since Lydian International first reported that illegal road blockages are preventing access to the Amulsar site and the Canadian company has now issued termination notices to about 30% of its workforce, idled construction contractors and warned of more job cuts to pressure the Armenia government to intervene.
Protestors are blocking roads in response to the change of government in May.
Prime Minister Nikol Pashinyan in late June instructed the protestors to discontinue the road blockades, but according to Lydian, the appeal had shown limited results. The company said on Thursday that it continued petitioning local and national government officials to enforce the law by removing the illegal blockades, but stated that the government had not acted on these requests.
Until the road can be reopened, Lydian had issued termination notices to 100 employees and the company said that staged employee reductions would continue until a permanent resolution was achieved. About 1 000 contractor employees are also affected.
“It is unfortunate that the current unlawful situation is continuing unnecessarily and negatively impacting on host communities and the livelihood of more than 1 300 employees and contractors,” said Lydian president and CEO João Carrêlo.
Before the demonstrations started affecting access to the Amulsar site, Lydian was working towards entering production at the 225 000 oz/y mine in the fourth quarter, ramping up to full output in 2019.
Meanwhile, the company also reported that it was seeking a comprehensive restructuring of its existing funding instruments in connection with its financing plan to complete construction and commissioning of its Amulsar project.
In the interim, the senior lenders have agreed to extend the initial repayment date and availability period from July 31, to August 15. Also, AB Svensk Exportkredit and Cat Financial extended the availability periods under their credit agreements to September 30, 2018 and September 30, 2019, respectively.
“Orion, Resource Capital Funds, Osisko, AB Svensk Exportkredit, and Cat Financial have demonstrated exceptional support for Lydian’s financing requirements. We believe the amendments can be completed soon, but the inter-relationships are complex and require more time to finalise. We appreciate the extensions provided by AB Svensk Exportkredit and Cat Financial, as well as the most recent extension from the senior lenders while we bring the revisions to conclusion,” Carrêlo added.
Shares in TSX-listed Lydian fell nearly 18% to C$0.21 a share on Thursday.