The International Resource Journal: Lydian International Lydian International ================================================================================ admin on 06 August, 2009 07:50:00 "Emerging transitional environments” Tim Coughlin, CEO at Lydian International says. “That’s what Lydian is about. Grassroots discoveries are rather rare, and we made ours driving along a main road.” Backtrack to the early 2000’s and Coughlin was working “with some ex-military guys working on risk analysis on what we call Country Entry Studies for clients.” “We would go to locations in Eastern Europe such as Russia and the Balkans and complete risk analysis and prospectivity analysis and represent recommendations to our clients. We were doing this for a client in Armenia and at that stage we decided Armenia was a good place to invest and wrote a positive report. The company decided to focus their activities elsewhere so we were left with Armenia, wondering what to do with it, which is when we established Lydian” he says. This was there beginning of Lydian’s Amulsar Gold Project, now run in partnership with Newmont Mining Corp, with some shares owned by The International Finance Corporation. Armenia & Amulsar To find such a remarkable discovery whilst driving along a main road is something Coughlin says people seem to find very entertaining in discovery terms. “That’s why we go to emerging transitional environments” he says. “So we found it in 2005, got a license over it in 2006, did the normal sort of exploration on it then last year we drilled our 14,000 metres and drilled out a one million ounce inferred resource. It’s not very often you get to drill a million ounces out in one drilling season and it’s a good indication that there’s going to be a lot more. That million ounces is open in all directions so there are extensions in every direction including depth. “ With a strong mining background including “most of my career as a technical consultant for the industry working for many of the major companies and some junior companies” and a stint as Anglo Gold’s Chief Geologist in South Africa under his belt, it comes as no surprise that realizing the resource potential and going about utilising this was quite an exciting process for Coughlin. “In terms of permitting we announced that we have a 25 year mining license over the project. Also this mining license is surrounded by two extensive exploration licenses with another seven years of time to go on them. In terms of the program, what we’re doing this year is drilling for size. Just to put this into perspective, last year we drilled a detailed area of the project which is only about 20 per cent of the gold mineralized area as we know it. The reason we did that was to report a resource and do sufficiently dense drilling to report that to the Armenian government in order to get our mining license because our exploration license had expired. That’s where we focused our drilling last year” he says. “This year we have the liberty to step out now so we’re drilling to find the absolute size of the deposit.” But this is not the only “emerging” and “transitional” environment Lydian has underway either. Kosovan Sites Lydian have two very interesting sites in Kosovo too. The Drazhnje project; an advanced zinc/lead/silver project, and the Crepulje project: an extensive and high grade zinc oxide project. “Drazhnje was a former Yugoslav exploration project which was at a highly advanced stage and ready to go into production before progress was stalled by ethnic unrest in 1988 and then the project was abandoned. We claimed that, we’ve done some drilling which has defined new exploration potential and also confirmed the existence of the massive sulphides” Coughlin says. “The resource is 6.7 million tons under Yugoslav category and our intention is to make it a 10 million ton project. For about the last 12 months we’ve been opening one level of old underground access which used to be exploration access only, it wasn’t production access. The idea is to get an understanding of the geology and take some more samples underground. We’ve just suspended all of this and we’re currently completing a NI 43-101 and we’re doing a small in-house scoping study to get an idea of the economics of that project. We’re doing that because of the current pressure on base metal prices.” The Crepulje project situated in north-western Kosovo extends approximately five kilometres strike and has both underground and open pit potential. Work has occurred at Crepulje since around the 1960’s when in the 1970’s it was abandoned because technology to treat the extensive zinc oxide mineralization didn’t exist. Shaping emerging environments Coughlin emphasizes Lydian’s strong approach to environmental and social responsibility and explains how their partners and business relationships only serve to strengthen company standards in this regard. “Lydian has a very strong social agenda. It’s a responsibility that any company operating in Eastern Europe needs to shoulder and take account of. But I think we’re particularly good at it and we have to be because of the World Bank’s interest. The International Finance Corporation, which is the equity investment arm of the World Bank, owns 20 per cent of Lydian which means we must and we do maintain World Bank standards in terms of our social programs, social interaction, engaging local stakeholders, and in terms of managing the environment” he says. “All of our social and environmental programs are reviewed annually by World Bank specialists and they ensure that we’re operating to high standards. We have a full-time environmental officer who works for the company and we have an international health, safety and environmental community consultant who acts as an intermediary between our people and the World Bank.” But this care for the communities they work amongst runs deeper than merely doing what is expected of a company. Coughlin is equally clear about what these parts of the world need in order to develop in industry. The future areas of growth “The biggest challenge is the market. It’s the market’s perception of these places and the fact that market perception is reality and it can be very frustrating for us because we haven’t had a problem in these environments” Coughlin says. “What we need is for companies like Lydian to take it through to production. For example in the case of Armenia where we’re taking a brand new discovery through to a mine and I think in that case we’re taking it right through the spectrum from there being absolutely nothing there or at least known about, making a brand new gold discovery, taking it through the licensing and permitting stage, through the resource development stage, through the resource conversion stage to feasibility and on to production. Now that’s a very good example that it can be done when you’re taking it from those first principles all the way through to a producing mine.” In the near future, Lydian’s exploration plan is simple; To drill out Almusar. “There’s not much we can do until we know how big that thing is. At the moment it’s open in all directions so it could be anything! It’s a million ounces, but it could be five million ounces or more, you just never know with these systems until you drill them out. We also seek to raise awareness and increase liquidity on the stock on a financial short-term goal” Coughlin explains. And looking longer term he remains open to the way in which the project will be run, with whom, and the interests of some in Lydian going forward. “In Kosovo it’s far simpler. We would continue with local miners and because of their excellent infrastructure we would look to set up a Toll Treatment “Coughlin says. Grass roots roadside discoveries in emerging transitional markets: We won’t see many more like this for some time.