New Feasibility Study for Lydian's Amulsar Shows Project is a
New Feasibility Study for Lydian's Amulsar Shows Project is a "Compelling Opportunity"

"Flag of Armenia" by SKopp — own work. Licensed under public domain via Wikimedia Commons.

Lydian International (TSX:LYD) started today off right with the release of a long-awaited updated feasibility study for its Armenia-based Amulsar gold project.

The study, which is an update of a September 2012 report, "produced an excellent outcome from both technical and economic perspectives," according to President and CEO Howard Stevenson, with highlights including total recoverable gold of 2.1 million ounces over a mine life of 10.4 years. Overall gold recovery is estimated at 84.2 percent, and yearly gold production is expected to average 200,000 ounces.

Meanwhile, initial capital costs are pegged at $426 million, while all-in sustaining costs should come to $701 per ounce of gold. Finally, the study points to an after-tax unleveraged internal rate of return of 20.2 percent and a net present value of $306 million; that's based on a discount rate of 5 percent and a gold price of $1,250 per ounce.

The company believes that together those results show that Amulsar is "a compelling opportunity for the development of a large scale, low cost operation utilizing open pit mining and conventional heap leach processing."

Clearing an obstacle

That said, what many market participants were waiting to hear about was the relocation of the company's heap leach facility, whose history has been a little troubled. It first entered the spotlight in November 2012, when Lydian began re-examining its original mine design for Amulsar after receiving a new mining license. As the company explained at the time, its aim was to make sure its "final development plans" would maximize the project's value.