VANCOUVER (miningweekly.com) – The TSX-quoted stock of Armenia-focused project developer Lydian International jumped 9.52% on Monday following the company's announcement that it has terminated a royalty agreement with former joint venture partner Newmont Mining, replacing it with a fixed payment option.
Toronto-based Lydian said on Monday that a portion of the payment it provided to Newmont in 2010, when it bought out Newmont’s interest in the Amulsar project, included a 3% net smelter return (NSR) royalty.
The companies had now reached agreement to replace the royalty option with fixed payment of $20-million, without interest, over 20 equal quarterly instalments. Payments will start on the first day of the third calendar month following the start of commercial production.
“The termination of the royalty agreement limits Lydian’s financial obligation to Newmont to $20-million over a five-year period, compared with the perpetual 3% NSR for the life of the mine. Newmont is a valued partner of Lydian and the Amulsar gold project, and we look forward to continuing our relationship as we bring Amulsar into production later this year,” Lydian president and CEO Howard Stevenson noted in a statement.
According to Lydian, the $370-million Amulsar project is meeting or surpassing all legal obligations by applying international standards. The project is now in its final stage of construction.
Amulsar will be Armenia’s largest gold mine and make Lydian one of the largest emerging gold producers of 2018. Estimated mineral resources contain 3.5-million measured and indicated gold ounces and 1.3-million inferred gold ounces. Gold production is targeted to average about 225 000 oz/y over an initial ten-year mine life.