Lydian International has signed financing agreements worth $325m to advance its Amulsar Gold project in south-central Armenia with Orion Mine Finance and Resource Capital Funds (RCF).

Amulsar is located 170km south of the capital city Yerevan in Armenia and was discovered in 2006 by Lydian in the south of Armenia, on the border between the provinces of Vayots Dzor and Sunnik.

The financing commitments comprise a $60m gold and silver stream, an $80m equity private placement, a $160m term loan facility, and $25m cost overrun facility.

The company estimates total financing requirement to fund construction of its wholly owned mine to be $395m.

"The financing of the construction of the Amulsar Mine represents a significant step forward in the development of the mining industry in Armenia."

Lydian International president and CEO Howard Stevenson said: "The financing provides over 75% of the overall financing requirement, which is a strong achievement in the current financial market.

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"Equipment financing discussions, which represent the final component of a fully financed project, have also been advancing throughout the value engineering stage."

Using the funds, the company will advance Amulsar ahead of the 2016 construction season.

Armenia Prime Minister Hovik Abrahamyan said: "The financing of the construction of the Amulsar Mine represents a significant step forward in the development of the mining industry in Armenia."

The deal will apply to 100% of gold production up to 2.1 million refined ounces less gold ounces deliverable under the stream agreement.

Following each delivery, Orion and RCF will pay for refined gold based on prevailing market prices during a quotational period, which will be reduced subject to the fulfillment of certain milestones.

In addition, the company plans to update the environmental impact assessment for the Amulsar Gold project and seek to amend the mining right approved by the Armenian Ministry of Energy and Natural Resources.

Lydian will also continue land acquisition, including areas along the conveyor corridor, as well as initiate conversion of lands for industrial usage.

The company will proceed with basic engineering in order to initiate construction during spring 2016.