The International Finance Corp (IFC), the investment arm of the World Bank, has disclosed its intention to invest an amount of C$1.4 million and to support Lydian’s exploration efforts on current projects and in new countries. Lydian is a diversified mineral exploration and development company, with expertise employing ‘first mover’ strategies in emerging exploration environments. Currently the company is focused on Eastern Europe developing advanced precious and base metal assets. The two main projects are gold at Amulsar in Armenia, and zinc, lead, silver and gold at Drazhnje in Kosovo. Lydian also has a pipeline of promising gold and base metal exploration projects in the Balkans region, and operates a 50/50 gold and copper exploration joint venture with Newmont Overseas Exploration, a subsidiary of Newmont Mining Corp in the south Caucasus region.
Lydian is also negotiating to raise C$1.6 million from other investors under similar conditions to that of its IFC placement for a total amount of C$3 million. The placements, which are subject to formal documentation and further approvals, will be priced at the lower of the market price prior to IFC’s disclosure of the proposed investment (C$0.42) and the market price at the time of signing of the subscription agreement. The placement is also subject to regulatory approvals including that of the Toronto Stock Exchange.
Following these private placements, IFC’s interest in Lydian will increase to approximately 18% (on a non-diluted basis). IFC’s new shares will be accompanied by a full warrant with a five-year exercise period and an exercise price at a 40% premium to market. The company expects that the other investors’ shares will be accompanied by a half warrant with a three-year exercise period and an exercise price at a 25% premium to market plus a further half warrant with a five year exercise period and an exercise price at a 40% premium to market.
“This will be IFC’s third equity investment in Lydian amplifying IFC’s confidence in and commitment to the company,” said Tim Coughlin, Lydian’s President and CEO. “It comes at a time when refinancing-risk is a dominant factor influencing investor confidence in the resource sector. The total anticipated investment will be sufficient to support Lydian’s activities at its current projects and to advance new gold exploration initiatives elsewhere. We are of course most privileged to enjoy the support of IFC as a committed long-term partner providing continued access to finance, influential in-country support, and advice in managing regulatory, environmental and social risks.”