Lydian International Ltd. said March 19 that a third-party environmental impact audit has begun on its Amulsar project in southern Armenia, after the country's government called activity to a halt on the site in 2018 over concerns for endangered flora and fauna.

The Armenian government chose consultancy group Earth Link and Advanced Resources Development to carry out the appraisal, for which Lydian said it does not accept the need or legal basis. The assessment is expected to last 12 to 16 weeks.

The authors of a previous independent evaluation in 2018 of Lydian's own environmental impact assessment concluded in a letter sent to Armenian ministers that "the Amulsar gold project, as proposed, presents a high risk of generating acid drainage and leaching contaminants for decades or longer, because of the inherent characteristics and placement of the wastes and ore, the poor geochemical evaluation, inadequate water quality predictions, overly optimistic mitigation measures, and Lydian's inexperience."

One of the authors of the previous appraisal told S&P Global Market Intelligence in February that the consultancy group appears to have neither specific expertise in acid mine drainage nor passive water treatment systems, both of which have been raised as the principal areas of concern about the project.

While Armenia's previous government under Serzh Sargsyan sought to accommodate the mining company — even changing the maximum allowable ramp gradient for haulage roads from 7% to 10% in 2015, saving Lydian about US$100 million — Nikol Pashinyan's new government has been less receptive to the unpopular gold mine, which has been blockaded by activists since 2018.

Environmental concerns about the threat the Amulsar project poses to local wildlife date back to at least 2013.