RE: Huge risks of potential takeover of Lydian's Amulsar mine21 May 2020 14:07
Buying of Lydian or its Amulsar mine has the potential to drive Chaarat's minority shareholders (who by default have no any decisive vote in decision making) and lenders of such a deal into a chain of criminal investigations and SP huge fluctuations. The facts regarding such a "takeover" speak for themselves:
1. Chaarat (CHG), according to some reports, intends to buy Lydian (LYDIF) and/or its assets at a significant discount, because as a result of inactions of Government of Armenia, Lydian has not been able to proceed with construction completion and commencement of operations due to illegal blockades of its mine, which followed the change of the Government referred there as "velvet revolution".
2. Same reports state that Chaarat will get exclusive guarantees to operate, so far not available for Lydian.
3. The MC of Lydian was around 350m USD in January 2018, before the illegal blockades started (gold at 1300$/ounce), currently it's near 7m USD at gold price of 1750$/ounce.
4. Lydian, according to its statements published by Monitor Alvarez&Marsal, has suffered more than 130m USD losses due to illegal blockades - an amount roughly equal to what is needed to finish the construction of the mine and to enter full operational cycle.
5. The illegal blockades of the Lydian's mine by environmental activists and various protesters continue already two years and the Armenian government is clearly acting against Lydian - by not enforcing the rule of law and by not following the court orders to unblock the mine.
6. Public reports indicate that no other mine in Armenia (including those that contaminate the environment according to official reports) has been stopped from operating during the last two years and various protests happening there have been calmed by decisive police force.
7. Various high ranking state officials have publicly stated that there is no evidence whatsoever that forbids Lydian from operating, and all of its licenses necessary to construct and operate the mine are valid. Prime minister, Vice PM have insisted publicly numerous times that the illegal blockades are being paid by rival companies and are aimed at damaging financial standing of Lydian.
8. The GOA has initiated numerous investigations against Lydian and those are simply extending the current status quo, while serving as another pretext not to allow Lydian to attract money to maintain its ongoing operations alive, driving it into the verge of bankruptcy or alternatively a sale arrangement.
9. Chaarat's Gordon Wylie who serves as Sr. Independent Director and Deputy Chairman since November 2007 - a person who has served also as Lydian's Chairman since its inception and until November 2018 has been discussing the Amulsar issue with the GOA during the blockades, while serving in his both positions at the same time.
10. Gordon Wyile has extensive ties with the President of Armenia - Armen Sarkissian, who has also been in Lydian's board in the past.
11. Blockades wi