ArmInfo. Lydian Armenia will allocate over $100 million to local community development as part of the Amulsar gold mine development program. The company signed the corresponding agreement on August 31 with the Ministry of Economy and the heads of the Sisian, Vayk, and Jermuk communities.
During a short briefing, RA Minister of Economy Gevorg Papoyan stated that the funds will be distributed as follows: the company will allocate $7-8 million to the communities annually, and this amount could increase to $9 million starting in 2027, depending on the price of gold on international markets. Moreover, the minister specified that communities are required to direct 20% of the allocated funds toward the development of settlements near Amulsar. As an example, he cited the village of Gorayk, located in the enlarged community of Sisian, which, according to the signed agreement, will receive 20% of the community allocation annually.
Referring to a statement from company management, Papoyan announced that gold ore production will begin at the mine in September. "This is a comprehensive investment program. We have already invested over $750 million under a public-private partnership (PPP). What's important about this program is that the state will not only receive up to $100 million annually in taxes, but also that the state is a shareholder in the company, holding a 12.5% stake. This means that a portion of the profits will go to the state. In addition, $9 million will be provided to the communities, and with these funds, the communities will be able to either provide subsidized co-financing or resolve other issues," Papoyan explained.
According to him, if these funds are used for other purposes, decisions on their distribution will be made by a specially created Council, which will include representatives of the company and the heads of the Sisian, Jermuk, and Vayk communities.
"In a few years, we won't recognize our communities, and all thanks to the program, the official launch of which will take place in October," he said.
Lydian Armenia CEO Hayk Aloyan added that this is an important investment for all partner communities. He stated that the company has been working with the communities to date and will continue to do so within the framework of its existing commitments. He also noted that the agreement was signed before the mine's completion, emphasizing the Ministry of Economy's significant role and efforts in this process. According to the agreement, the communities affected by the project include Jermuk, Kechut, Gndevaz, Saravan, including Saralanj and Ukhedzor, as well as Gorayk.
As a reminder, the Amulsar gold mine has been blocked by environmental activists since late 2018. At that time, the government was unable to resolve the issue of resuming construction of the mine, and operations were suspended. It was only in 2023 that an agreement was reached to restart the Amulsar project.
Overall, the total cost of the first, 12-year investment program for the Amulsar gold mine is $750 million. The mine's approved reserves are estimated at 73 tons of gold (worth $84 billion at current prices) and 294 tons of silver. These reserves are also considered a reserve locally and a resource internationally. Consequently, 150 tons of gold are planned to be extracted over 25 years, and given the existing reserves at new sites, the program could be extended to 40 years. For this reason, additional exploration aimed at expanding the reserves will be conducted in 2026-2027.
In February of this year, the Armenian government issued a loan guarantee for $150 million in loans to the company. As part of the deal, the Armenian government received a 12.5% stake in the company, for which it will not pay anything, but will instead insure the transaction against certain risks.
According to forecasts from the Armenian Ministry of Finance, as early as 2023, the mine's launch could lead to an annual increase in the country's GDP of 1% to 1.5%, with daily budget revenues from the mine's operation estimated at approximately $100 million. However, at current gold prices, these figures are expected to increase significantly.
The mine holds the second-largest reserves in Armenia. According to the company, it contains approximately 73,733 kg of gold with an average grade of 0.78 grams per ton, as well as 294,367 tons of silver with an average grade of 9.29 grams per ton. The mine is located in the southeast of the country, 13 km from the town of Jermuk, in the interfluve of the Arpa and Vorotan rivers.
