Lydian International continuing to face illegal road blocks; seeking to restructure funding

Gold mine developer Lydian International Ltd (TSE:LYD) said it continues to face illegal road-blocks, which is impacting construction at its huge Amulsar gold mine project in Armenia.

There was a change of government in Armenia in May this year and demonstrations and road blockades have occurred sporadically since.

They have prevented Lydian and its contractors from entering the Amulsar site since late June, while Prime Minister Pashinyan’s appeal instructing the protestors to stop them has shown limited results, said Lydian.

Lydian has now issued termination notices to 100 employees, representing approximately 30% of its workforce. In addition, all construction contractors (1,000) have been idled.

Staged employee reductions are expected to continue until a permanent resolution is achieved, while  the firm said it was in “constructive discussions with its contractors to mitigate costs and best support a resumption of construction once the illegal blockades are removed”.

“Amulsar is an important economic contributor to the country of Armenia. It is unfortunate that the current unlawful situation is continuing unnecessarily and negatively impacting host communities and the livelihood of more than 1,300 employees and contractors,” said Joao Carrelo, the president and chief executive of Lydian.

“We remain hopeful that a prompt resolution is possible.”

Meanwhile, Lydian is seeking to restructure its existing funding instruments in connection with its financing plan to complete construction and commissioning at the site.

“Discussions are well advanced with key stakeholders and Lydian expects a solution in the near-term.

“In the interim, the senior lenders have agreed to extend the initial repayment date and availability period from July 31, 2018 to August 15, 2018.

“Also, AB Svensk Exportkredit and Cat Financial extended the availability periods under their credit agreements to September 30, 2018 and September 30, 2019, respectively.”

Lydian shares fell 11.76% to stand at C$0.225.

Story by ProactiveInvestors