IN THIS NEWSLETTER

$5mln for Jermuk National Park 1

2016 Social /livelihood programs 2

2016 Land rent payments to three

communities 3

Holiday wishes 4

Lydian Armenia will invest USD 5 million dollar in Jermuk National Park

USD 5 MILLION TO BE INVESTED IN JERMUK NATIONAL PARK

December 13th, 2016, Yerevan: the Republic of Armenia Ministry of Nature Protec-tion and Lydian Armenia CJSC signed a Memorandum of Understanding for the establishment of Jermuk National Park, aimed at biodiversity conservation, eco-tourism development. Lydian Armenia anticipates investing over $5 million in Jer-muk National Park over a period of 5 years. The Company will involve best inter-national biodiversity specialists in the project. “Since the first day of its opera-tions, the Company has committed to be an exemplary mining industry. With the intent to establish Jermuk National Park, we raised the bar of our operations standards. This is the first example of a joint project between the Ministry and a mining company worldwide, which, I think, will be successful and exemplary for other companies as well,” said Hayk Aloyan, Lydian Armenia Managing Director. RA Minister of Nature Protection, Artsvik Minasyan, in turn, mentioned that “a new culture is emerging in Armenia’s economic and mining reality in view of responsible approach to mining sector. Lydian Armenia is making its substantive step to this end. And this initiative is highly appreciated”, the minister said adding that the project will not just serve as a basis for biodiversity conservation and de-velopment, but also enforce one of the most important aspects of the Govern-ment program – expansion of national parks and the idea of establishing a nation-al park, particularly in Jermuk. “This is a good start, a brilliant opportunity for other private sector enterprises to get involved in similar projects implemented by the Government. This is a responsible attitude towards the region, the country and the future generations,” the minister said.

Lydian Armenia CJSC, Newsletter, December 2016, p. 1 Նոյեմբեր 2015, էջ 1 Hayk Aloyan added to emphasize that Amulsar Gold Mine Project is in line with international standards. “We should provide compensation if a third party is affected by the mine or the national park and able to provide supporting proof. This is about tens of millions of dollars. Insurance will cover the damage caused to the third party and other insurance risks, including environ-ment pollution, fire, human health issues, etc.”, he said. Best international practice demon-strates that it is possible to launch mining activities using up-to-date management approaches. Govern-ment agencies highly appreciate Lydian Armenia’s commitment and initiative in the establishment of Jermuk National Park in line with the environmental requirements and through fruitful cooperation for nature and biodiversity conserva-tion. Minister Artsvik Minasyan em-phasized this in his speech. Jermuk National Park may become an exemplary biodiversity conserva-tion project not only in the region, but also in the international mining practice thanks to cooperation of internationally recognized special-ists and best Armenian scientists.

ALL COMMUNITIES

Weekly waste collection: Gndevaz, Gorayk, Sar-

avan

Student support program - providing education

fees for 12 local students to study mine engineer-

ing in Yerevan universities

Wikipedia summer camp – 18 youth learned

wikipedia skills in summer camp

Traffic safety - School backpacks with reflectors

were distributed to 600 children in 2 schools in

Jermuk, schools in Gndevaz & Kechut

Healthy communities foundation – financial sup-

port to help households address their health

issues

Irrigation water system upgrade—co-financing

irrigation water upgrade in Lor & Shenatagh

communities

Primary health care—eye screening was orga-

nized in the communities aimed at early detec-

tion of eye problems

JERMUK

Support to children’s choir, Year 2—participating

in music/art festivals, etc.

“From waste to life” - environmental awareness

& skills learning program, income generation

through exhibition-sales & other events, 35-40

beneficiaries

Kechut music school repair - Sanitation, dance &

other classrooms

Support to Chess Federation & Academy of Ar-menia aimed at tourism development

Amulsar Information Center - established in

Jermuk

Street/traffic safety— street lights & signs were

installed at the entrance & school area

SARAVAN

Improved livelihoods 3 heated greenhouses, 6

high yielding gardens, 40 direct beneficiaries

Playground Irrigation system upgrade— co-financing

GORAYK

Artificial insemination—technical support

to local vets; training events for 60 farmers

Dentistry—established dentistry, provided

equipment

Support to dance group Support to small businesses –trainings on

business module, technical support & ad-

vice, development of business plans. 10

local businesses will be supported—40 di-

rect beneficiaries.

GNDEVAZ

Besides social programs, livelihood restoration activities were supported in this community for the affected landowners, as part of the land acquisition. School heating program—windows & doors

changed

Support to dance group

Support to fruit drying facility & coopera-tive—Over 6,500 tons of fresh fruit was

processed, with 1200 kg of dried fruit

(apricot, peach, plum). During the season

5-6 jobs were created

Livelihood restoration - 6 heated green-

houses, 6 high yielding gardens established,

training events for 40 farmers, 50 direct

beneficiaries

Artificial insemination & technical assis-

tance, training events for local vets & 70

herders

Support to 14 women-led businesses –business trainings, business plan develop-

ment, 50 direct beneficiaries

Irrigation water channel repair in Northern

Gndevaz

Skills learning for 30 affected women land

owners: English language, catering, tailors

& cooking tutoring

Road improvement for herders

December 2016, p. 2

2016: Social & livelihood programs in brief

AMD 25,030,000 $ 52,695

AMD 58,050,616 $ 120,212

AMD 15,202,228 $ 32,005

AMD 301,646,282 $ 635,045

AMD 16,488,500 $ 34,712

Thus, Lydian invested $ 870,353 in social & livelihood programs in 2016, including:

Social programs in the af-fected communities

Livelihood activities in Gndevaz

Gndevaz irrigation channel repair

Land rent payments by

Lydian in 2016 totals to

$ 639,456, of which:

Gndevaz - $130,205

Saravan-$267,906

Gorayk- $241,345

2016 state budget for

three villages was $70,833.

Եթե ուզում եք փոփոխության, եղեք այն—սկսեք ձեզնից

Land rent payments by

Lydian allowed respective

local governments provide

co-financing for large scale

infrastructure programs:

Gorayk

Sewage system upgrade

Drinking water upgrade

Saravan

Irrigation system upgrade

Village administration

building renovation

Gndevaz

Street lights

Community hall renovation

December 2016, p. 3

For period 2008-2016, Lydian

Armenia land rent payments

to three affected communities

are as follows:

AMD 1,619,337,760 dram or

USD 3,373,620 dollar, of

which:

Gndevaz– AMD 256.360,233

dram ($ 534,084)

Saravan—AMD 788.139,247

dram ($ 1.641,957)

Gorayk - AMD 574.838,280

dram ($ 1.197,580)

Jobs

Lydian Armenia adopted Local Employment Plan & Local Procure-ment Plan, to hire locally where possible. “Local” first of all, means the affected communities of Jermuk/Kechut, Gorayk, Gndevaz, and Saravan (Saralanj, Ughedzor). These communities are adjacent to the Amulsar Mine area. It is anticipated that the 30% of the workforce will be hired locally. In case no skilled specialists with sufficient experience are found locally, employees will be hired from adjacent and wider communi-ties. It is important to note that any job requires certain skills, work ex-perience, and relevant education. These are the criteria for hiring employees. The Company has marked out a number of categories.

Unskilled, with no vocational education Semi-skilled with no vocational education Semi-skilled, with relevant education Skilled, with vocational education Skilled, with high education

The information centers located in Gndevaz and Jermuk register jobs seekers and accept job applications for any new vacancy an-nouncement. Note that Lydian’ Human Resources Department is currently putting in place a skills learning program aimed to provide opportunities to local population acquire technical , skills and knowledge. Employment for the past 2-3 months looks as follows: Monthly about 330-390 people employed by the Company, con-

tracts, and social programs 50% of the employees are from the affected communities Female and male employees account for 20%-80%, respectively Lydian Armenia has hired 54% of total employees, with others

hired by contracts and social programs 46% of all employees are involved in construction, while others

are at the administration, technical support, environment pro-tection, human resources, social, security and other depart-ments.

Noteworthy, in November and December, 2016, the Company con-ducted a survey among local businesses to find out the local capaci-ty and areas for potential cooperation. At present, tourism assessment is underway in Jermuk to find out the tourism development trends before starting construction activi-ties. The survey results will be summed up in the coming newslet-ters. Նոյեմբեր 2015, էջ 4

LYDIAN ARMENIA WISHES A HAPPY

NEW YEAR AND MERRY CHRISTMAS TO

EVERYONE

Be healthy and prosperous,

Joy to you and your families

2016 Highlights

Company received the construction permit & started preparation works: roads, electricity, other infrastruc-ture Memorandum was signed for the establishment of Jermuk National Park: Company will invest over 5 million USD Project optimization – infrastructures, roads, and areas were reduced Land acquisition is over in Gndevaz: 278 land plots acquired without expropriation Livelihood restoration activities were launched in Gndevaz $ 870,353 USD invested in social & livelihood activi-ties $ 639,456 USD paid for land rent to three communi-ties Lydian adopted Local Employment & Local Procure-ment Plans to promote local employment & procure-ment Launched Small businesses support program: 14 busi-nesses in Gndevaz, 10 businesses in Gorayk Program direct beneficiaries/persons

820 children – Wiki camp, choir, dance groups, safety

induction

220 people -agriculture, animal husbandry, food pro-

cessing

130 people – small businesses, skills development

events

250 – primary healthcare, checkups, awareness raising December 2016, p 4