{"id":6673,"date":"2018-05-09T14:25:47","date_gmt":"2018-05-09T10:25:47","guid":{"rendered":"http:\/\/armecofront.net\/?p=6673"},"modified":"2018-05-10T21:05:55","modified_gmt":"2018-05-10T17:05:55","slug":"lydian-is-facing-a-collapse","status":"publish","type":"post","link":"https:\/\/dev.armecofront.net\/en\/lydian-is-facing-a-collapse\/","title":{"rendered":"Lydian is facing a collapse"},"content":{"rendered":"

One can conclude this judging by the comments<\/a> that can be found on Toronto Stock Exchange\u00a0page of\u00a0Lydian International offshore company. Here, a number of shareholders of the company are concerned with the company\u2019s activities since\u00a0they do not get\u00a0replies to their phone calls or emails from the company. They write that they are trying to get in touch with\u00a0Lydian to find out why for example Howard Stevenson resigned, or how the company appointed the new president. One of the comments is as follows, \u201cNot sure what happened here – LYD replaced their CEO and put in the guy who led Eco-Oro, which is suing the Colombian government. \u00a0Not sure why LYD did not give themselves more time to find other alternatives.\u201d<\/p>\n

Another comment asks the following, \u201cI too tried to get more info regarding the sudden departure of Stevenson and much more importantly, how the company planned to address the $40 million overrun. Squat response. I personally get very nervous when I see the company say they remain committed to bringing the project on stream this year. I interpret this as meaning there is now significant doubt that such is the case. The Scotia analyst this A.M. said he (conservatively) assumed the company would raise $60 million US at 30 cents Cdn, dilution of 34%. Obviously, this story has developed leprosy in the last 2 months. I still see potential but have cut back my exposure big-time.\u201d<\/p>\n

Another shareholder\u2019s response, \u201cWhen I spoke to management during the PDAC in March I along with other shareholders shared with them our deep dis-satisfaction if they decide to raise the funds via a stock dilution. This would be a slap in the face to all existing shareholders as it will basically wipe out any value that we had in the company. If this happens I will make sure that every share I have, along with colleagues, family, friends and others to vote against this management and BOD if they are determined to destroy shareholder value in this fashion.\u201d<\/p>\n

\u201cI don’t see mine to be open this year. Also, I know Armenian people, they are not a sheeps. It’s not like in Africa you can send warlords and shut up any villages, it’s not going to work here. So, Amulsar have a problem here. The only way it can end if Amulsar draft some new agreement with the town and it cost money and delays. Corruption widespread, for sure city bosses encourage this stands as they see they can get money from Amulsar. Better look for other stock with opportunity…\u201d<\/p>\n

\u201cI agree. There are no way too many red flags here. I was ok with a couple but now the unknowns are many.\u201d<\/p>\n

Shareholders were also alarmed by the strike that happened recently as a result of inner political shifts in the country and which has pushed the construction workers in Amulsar leave their workplace and join the strike. The company had attempted to present<\/a> this as the company\u2019s good will\u00a0since they did not hinder the freedom of expression of their employees.<\/p>\n

\"Lydian<\/a><\/p>\n

Anyways, both for shareholders, as well as for us it was unexpected and doubtful as to why the president Howard Stevenson left the company (especially on May 1st). Has it anything to do with the retreat of the corrupt political-economic elite of Armenia, or there might be other issues? Maybe the reason why\u00a0Stevenson\u00a0(who gave\u00a0so many promises<\/a>) eventually resigned is because of the growing dissatisfaction of the residents<\/a> of the local communities against the mine, as well as the opposition of the experts and environmentalists, as a result of which only in the past ten days the value of the company\u2019s shares dropped in 21% reaching from 0.45 to 0.35? Or\u00a0might there be a problem\u00a0with this extra 40 million USD expenditure?<\/p>\n

And who is the new director? Among number of mining companies<\/a> led by Joao Carrelo, one is of particular interest. Eco Oro Minerals Corp. that was headed by Carrelo between 2012-2014 is now famous for a court case. This company\u00a0planned to start a gold mining in 1994 in Santander region<\/a> of Columbia. \u00a0This area is an important source of water (providing water for over 70% of Colombians), as well as it has a unique flora and fauna. Although the Colombian law prohibits extracting material in this area, companies used the loopholes in the laws to carry out harmful mining projects.<\/p>\n

The World Bank\u2019s private lending arm, the International Finance Corporation (IFC), backed Eco Oro in 2009, investing $11 million in company shares before an environmental and social impact assessment had been done. Here as well (as in case of Amulsar<\/a>)\u00a0the locals sent their complaint to the IFC\u2019s Compliance Advisor Ombudsman (CAO), which investigated the case for 4 years and reached the conclusion that IFC performance standards had not been met. The CAO reported that the company did not complete the required studies, such as an Environmental and Social Impact Assessment, a biodiversity baseline study, and critical habitat assessments. The IFC had also failed to assess the impacts of the entire mining project.\u00a0Colombian\u00a0courts in their turn had ruled that mining in this area was illegal, and the project has been halted for some time. As a response, the company decided to sue Colombia using the Canada-Colombia trade agreement in the World Bank\u2019s investment court (ICSID).<\/p>\n

As a result of continuous protests, the IFC quietly announced it had divested from Eco Oro in 2016. The company expects to get around 764 million USD as a compensation while having invested only about 250 million USD in the project. The decision is not expected earlier than November.<\/p>\n

So now the question is how and why exactly Eco Oro\u2019s ex-president Joao Carello was appointed as the president of Lydian International. Is Lydian expecting the suspension of its activities some time soon so it wants to have someone experienced in court cases who will also guide Lydian International? Anyways, both Lydian International and Lydian Armenia are doing their best to involve individuals in their team, who have certain scandalous experience in the past. In January 2018, Lydian International announced<\/a> about appointing Rodney Stuparyk as the general manager for gold project in Amulsar. The latter has previously been the\u00a0vice president of Risk, Compliance, and Sustainable Development at the notorious Kumtor gold mine in Kyrgyzstan. We covered<\/a> the case of this mine sponsored by EBRD and which threatens water resources of the region, negatively impacts the climate, violates human rights of the locals, etc.<\/p>\n

The scenarios seem similar in all these cases. International banks make investments in projects without paying attention to social and environmental outcomes. Where these kind of investments bring forth the locals’ dissatisfaction, resistance of the locals through courts or other medium takes place and goes on for years. Where locals\u2019 resistance is resolute, opportunities arise to stop projects oppressing the people and harming the nature. Armenia is also going through changes<\/a> as it is resisting against oligarchy, corruption, mines, etc. When construction workers in Amulsar joined the strike, they did so not thanks to Lydian’s permission, but as a result of their resistance to oppressors, be it political or economic. This is also clear for the company and that is why they might leave\u00a0their shareholders\u2019 questions unanswered.<\/p>\n

We call on all shareholders at Lydian to once again watch this video<\/a> (it has English subtitles) and learn that this resistance was also against the mine and yes, you\u2019d rather search for opportunities in other stocks, especially since according to some sources<\/a>, Lydian\u2019s gold project in Amulsar is based on false data. Some estimate that there is no such amount of gold (2.6 million ounce as stated by Lydian), but instead only about 705 thousand ounce of gold exist there. But more than that, this project has a lot of legal shortcomings, and so even if Lydian tries to sue, it has high chances to lose. For example a new\u00a0factor that was concealed\u00a0by Lydian\u00a0was the fact that it had not properly assessed the potential of acid drainage at the mine site harming water sources there.\u00a0This was revealed by the independent experts<\/a>\u00a0in 2017.<\/p>\n

Armenian Environmental Front (AEF) civil initiative<\/em>
\nemail: armecofront@gmail.com<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

One can conclude this judging by the comments that can be found on Toronto Stock Exchange\u00a0page of\u00a0Lydian International offshore company. Here, a number of shareholders of the company are concerned with the company\u2019s activities since\u00a0they do not get\u00a0replies to their phone calls or emails from the company. They write that they are trying to get […]<\/p>\n","protected":false},"author":1,"featured_media":6674,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[164],"tags":[91,141,140,90,132],"regions":[],"class_list":["post-6673","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-amulsar-2","tag-amulsar-en","tag-ebrd","tag-ifc","tag-lydian-en","tag-world-bank"],"_links":{"self":[{"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/posts\/6673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/comments?post=6673"}],"version-history":[{"count":5,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/posts\/6673\/revisions"}],"predecessor-version":[{"id":6685,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/posts\/6673\/revisions\/6685"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/media\/6674"}],"wp:attachment":[{"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/media?parent=6673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/categories?post=6673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/tags?post=6673"},{"taxonomy":"regions","embeddable":true,"href":"https:\/\/dev.armecofront.net\/en\/wp-json\/wp\/v2\/regions?post=6673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}