Name and Location
Amulsar gold project, southern Armenia.

Client
Lydian International, a wholly owned subsidiary of Geoteam.

Project Description
The results of an updated feasibility study on the Amulsar project have demonstrated a compelling opportunity for the development of a large-scale, low-cost operation using openpit mining and conventional heap-leach processing.

Envisioned is an owner-operated mining fleet delivering run-of-mine ore at a nominal rate of ten-million tonnes a year from the three openpits to the primary crusher.

The ore will be reduced in size through a three-stage crushing facility from 700 mm to 100% passing 12.5 mm. Overland conveyors will transport the crushed ore about 6.2 km to a crushed ore stockpile. From there, it will be reclaimed by belt feeders underneath the stockpile and transferred to a load out bin by a conveyor. Lime will be added to the ore on the conveyor and trucks will haul the ore about 500 m to the heap-leach pad for stacking.

The planned heap-leach facility comprises the leach pad and collection ponds. The leach pad will be built in three phases, with a total ore-heap stacking capacity of 104-million tonnes over the 10.4-year project life. The collection ponds will include the process pond and two storm event ponds. Process solution and storm/snowmelt water will flow from the leach pad and will gravity drain through a spillway from the pad to the process pond. Spillways will connect the ponds for potential runoff overflows.

Stacked ore on the heap-leach pad will be treated by applying barren leach solution at a rate of 10 l/h/m².

The overall leach cycle is 110 days, consisting of 55 days of primary leaching and 55 days of secondary leaching.

More than 70% of the gold is expected to be recovered during the primary leach. Pregnant leach solution will be collected in the process pond and then pumped into a standard adsorption, desorption and recovery plant for processing. The strip solution from the carbon columns will be transported to the electrowinning circuit where the precious metals will be deposited onto steel mesh cathodes, dried in a retort and smelted into doré bars. Doré will be shipped offsite to be refined and sold. Overall gold recovery is expected to be 84.2%.

Net Present Value/Internal Rate of Return
The project has an after-tax unleveraged internal rate of return of 20.2% and a net present value of $306-million, based on a discount rate of 5% and a gold price of $1 250/oz.

Value
Initial capital costs are estimated at $426-million.

Duration
Construction is expected to start in the second quarter of 2015, with commissioning expected late in 2016.

Latest Developments
Lydian has reported that there is potential for further project upgrades through a value-engineering programme at its 100% owned Amulsar gold project.

The second quarter engineering programmes have focused on testing and the analysis of a number of opportunities to improve Amulsar economics.

Lydian president and CEO Howard Stevenson has noted that the company is pleased with the progress to date and adds that the programme is an important step toward ensuring maximum project economics.

“Much of this work will also support enhanced construction and operating conditions and further mitigate environmental and social impacts. We expect to bring these value-engineering studies to conclusion in due course and quantify our findings through an update of the Amulsar technical report,” he says.

Consideration has mostly been given to opportunities to reduce capital costs and identify other areas where operating cost improvements can also be achieved.

This includes incorporating new Armenian mining legislation to redesign the mine through reconfiguring the crushing plant, conveyor belt design revisions and refinements to the site layout.

The possibility of moving from self-mining to contract mining is also under review.

In May, Lydian reported that an expected saving of about $86-million would result from an optimised mine design, which took into account legislative changes in Armenia that now allowed for a maximum ramp gradient of 10% in openpit mines.

Fuel cost assumptions were also updated to take into account the current trend for diesel prices in Armenia. These changes provided a significant reduction in expected operating costs of about $83-million and a reduction in expected mining capital expenditure of about $3-million.

The potential to redesign the crushing and screening plant was singled out as a significant opportunity to further reduce capital and operating costs.

Metallurgical testing was being conducted on 30 columns to determine the effect on gold recoveries and other operating parameters, such as reagent consumption, when increasing the crush size from a P100 crush size of 12.5 mm to 19 mm.

If successful, a larger crush size combined with the findings of a blast fragmentation study may support reconfiguration and reduction of crushing equipment. Further, the energy requirement for crushing may be reduced if the use of a larger crush size is possible.

An alternative route and configuration of the conveyor belt is also under review, as a more direct route could result in a 15% reduction in the overland conveyor length, fewer elevated sections and the elimination of the transfer station.

Analysis of the operating belt speed is also being examined, which could allow for the reduction of the belt width.

Other site layout revisions are being considered to reduce construction earthwork volumes, improve surface-water management and combine various facilities to reduce duplicated infrastructure.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Lydian International, tel +44 1534 747 890 or email moreinfo@lydianinternational.co.uk.