Lydian International: 13 Percent Decrease in Capital Costs, 17 Percent AISC Decrease for Amulsar

Lydian International (TSX:LYD) reported results of a value engineering and optimization study for its Amulsar gold project in Armenia. Highlights included a 13 percent decrease in capital costs and a 17 percent decrease in all-in sustaining costs for the project.
As quoted in the press release:

• Initial capital costs of $370 million, a $56 million reduction from the October 2014 technical report (the “2014 Technical Report”);
• All-in sustaining costs reduced to $585/oz of gold, down from $701/oz of gold based on the 2014 Technical Report;
• Operating cost reductions reflecting a lower 2.4:1 W:O stripping ratio and decreases in key consumables including electricity, diesel and reagents;
• Total recoverable gold of 2.1 million ounces over a 10 year mine life;
• Gold production averaging 243,000 ounces per year during the first five years and an overall average of 211,000 ounces per year over the life of mine;
• Accelerated after-tax cash flows of $567 million during the first five years of operations to support early payback of project debt and equipment financing;
• Over 100 million tonnes of inferred mineral resources and potentially mineralized zones adjacent to and below currently defined mineral resources and reserves; and
• After-tax unleveraged IRR of 21.6% and NPV of $338 million based on a discount rate of 5% and a gold price of $1,150 per ounce.

Lydian President and CEO, Howard Stevenson, said:

We set out to reduce capital expenditures without negatively impacting operating costs. This $56 million capital cost reduction met our target. Combining this outcome with a decrease of more than $100/oz in all-in sustaining costs greatly enhances Amulsar’s economics. Amulsar will be a very low-cost gold producer of excellent scale. We will produce 2.1 million ounces of gold from the current mine plan, and we see strong opportunity for orebody-growth.

Click here for the full press release.