Canadian mining firm Lydian International will turn to the Administrative Court of Armenia for an order compelling the Environment Ministry to issue a water permit for the contested Amulsar project.

This comes after the Environment Minister rejected the mining company’s application for a licence to draw 40 ℓ/s from the Darb river.

The company initially requested 43.5 ℓ/s, but the Ministry said it needed to revisit the requested volumes, owing to seasonal insufficiency of water in the river during three months of the year.

Lydian is now challenging the Ministry on the basis that it failed to decide on the application within the stipulated timeframe.

“It is regrettable that Lydian must once again seek assistance from the Armenian Judiciary to address unlawful attempts to interfere with Lydian’s legal right to develop and operate the Amulsar project. Just last month, the Administrative Court found that a former official of the government of Armenia had been acting illegally to prevent the company from advancing the Amulsar project. It now appears that a Minister in the government of Armenia is also acting illegally to prevent Lydian from advancing the Amulsar project,” said Lydian interim president and CEO Edwards Sellers.

The Amulsar project has faced several setbacks and delays as groups campaigned against the mine over concern about its impact on the environment. The project has been subject to three full-scale environmental audits, which it all passed.

Prime Minister Nikol Pashinyan said in September that there was no legal basis that government could prevent the company from advancing Amulsar in accordance with its permits and that access to the project should be restored.

Lydian recently updated the feasibility study for Amulsar, which works on lower average yearly gold production and higher all-in sustaining costs (AISC), than the 2017 technical report. Amulsar is forecast to produce 205 000 oz/y at an AISC of $744/oz, compared with the previously estimated 227 000 oz/y at an AISC of $514/oz.

The AISC reflects actual labour costs and pricing of consumables realised in the pre-production stage.

In September, the company said that the Amulsar project could be producing by late next year, or early 2021. The company is looking at restarting construction by April or May next year, although some rehabilitation and earth-moving associated with site recovery could start earlier.

Work on the project was halted in June last year, when protestors set up illegal blockades preventing access to the mine. Before the demonstrations, Lydian was working towards entering production in the fourth quarter of 2018, ramping up to full output in 2019.