#1Lydianinternational.co.uk TSX:LYD Amulsar Gold Project: Armenia Investor Presentation March 2014 LYDIAN INTERNATIONAL#22 Forward Looking Statement LYDIAN INTERNATIONAL This presentation contains projections and forward looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company. These risks and uncertainties could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company within the United States or otherwise. Information concerning estimates of minerals reserves and resources The mineral reserve and resource estimates reported in this presentation were prepared in accordance with Canadian National Instrument 43-101 standards of disclosure for mineral projects ('NI 43-101'), as required by Canadian Securities Regulatory Authorities. For United States reporting purposes, the United States Securities and Exchange Commission ('SEC') applies different standards in order to classify mineralization as a reserve. In particular, while the terms 'measured', 'indicated' and 'inferred' mineral resources are required pursuant to NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into reserves. In addition, 'inferred' mineral resources have a greater amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of any inferred mineral resource will ever be upgraded to a higher category. Under Canadian Securities laws, issuers must not make any disclosure of results of an economic analysis that included inferred mineral resources, except in rare cases. Mr. G. David, Keller, P.Geo, of AMC Mining Consultants, has responsibility for all matters relating to geology and the CIM compliant resource update, March 2013. Qualified Persons as defined by the CIM Definition Standards November 22, 2005 and Section 5.1 of National Instrument 43-101 Standards of Disclosure for Mineral Projects, Form 43-101F1 and Companion Policy 43-101CP. lydianinternational.co.uk#3Investment Highlights Amulsar is one of only a few large-scale, low- cost, heap-leach gold projects which when fully ramped-up will be one of the world's top gold mines annual production and all-in cost basis.... 3 on an LYDIAN INTERNATIONAL 100% Lydian owned, open-pit, heap leach gold project Current resource (March 2013): 52.4 Mt at 1.1 g/t gold (1.8Moz) Measured category 18.1 Mt at 1.0 g/t gold (0.6Moz) Indicated category 58.0 Mt at 0.9 g/t gold (1.7Moz) Inferred category Feasibility study Sept 2012 - NPV US$646, IRR 28% (at US$1200/oz gold) 10Mtpa, 150-250k ounce gold producer Roads, power, water, electricity, gas and fibre optic cable all transect the license area, labour sourced from local communities Metallurgical testing +90% recoveries including 'cold climate' testing Oxide resource; open in all direction Supportive global shareholder base including IFC/EBRD Strong community support in Armenia lydianinternational.co.uk#44 Corporate Snapshot SYMBOL Shares in Issue Directors and Employees Options Warrants Fully diluted shares TSX:LYD 147.42m 5.75m Nil 153.17m Market Cap (at C$1.10) C$162.2m Cash at bank and in hand C$25.25m (21/02/14) Debt C$0m LYDIAN INTERNATIONAL Capital Payments: " Newmont pre-production payments paid On production Lydian has the option of paying Newmont: a 3% NSR; 20 quarterly payments of US$1m; or, a one off payment of US$15.6m. lydianinternational.co.uk#5Government Relations Lydian has pressed the "reset button": The Company is taking advantage of the current cost environment, optimising the mine design, and making significant corporate and managerial changes and also engaging more with the Armenian Government LYDIAN INTERNATIONAL Improved government engagement after HL relocation Working Group leveraging a positive outcome Framework Agreement for project investment being discussed with Ministry of Economy Constant communication with Ministry of Energy & Natural Resources including Mining Rights Application Government meetings held regularly to discuss social programs implemented by Geoteam and the development of local communities Support from US/UK Ambassadors Involvement of IFC/EBRD and consultants Armenian Government open to international investment (Contour Energy deal) LO 5 lydianinternational.co.uk#6New Heap Leach Upside full- "We consider the results achieved by the Working Group as an important milestone in the scale development of the Amulsar project. We are hopeful that the mode of cooperation achieved in the working group will induce the Amulsar project to pick up further steam." Minister Vache Gabrielyan, Armenian Chief of Staff LYDIAN INTERNATIONAL New identified HLF deemed suitable by the joint working group; Sept 13 Extension to production deadline to September 2018 H2/13: all needed field investigations for the FS and environmental impact studies completed Removal of expensive stacking system and less earth works Lower elevation, less effect from winter weather Less potential to affect current water users Reduced area of disturbance Operation pond contained within heap reducing potential for affects on wildlife Closer to existing infrastructure CO 6 lydianinternational.co.uk#7Trade-off/ Optimization Studies Potential cost-saving initiatives & Operational flexibility; new market environment providing advantages for equipment supplies and engineering studies 7 LYDIAN INTERNATIONAL Designing mining infrastructure with Blue- sky potential in mind Straight into larger operation production rate still optimal Reduction of haulage cost initiatives: Waste dump and primary crusher closer to the mine Maximizing the length of the overland conveyor Locating the primary crusher closer to the mining pits New block model including 2013 drilling; no significant change to open pits or FS Possible use of electric-drive haul trucks; better for loaded downhill hauls Crusher operations being studied to reduce costs but keep excellent gold recovery Exploration rehabilitation work in progress lydianinternational.co.uk#88 Amulsar Infrastructure Gndevaz M2 Saravan Spandaryan-Kechut Tunnel Saralanj 0 1.5 3km Ughedzor North Erato Erato Open Pits Tigranes Artavasdes Orontes Arshak Power Lines Existing Roads LYDIAN INTERNATIONAL Gas Pipeline Gorayk Spandaryan Reservoir lydianinternational.co.uk#9M 45° Armenia 37% 39° 41° 43° 45° 47° 49° 51° 43° GEORGIA BLACK SEA 9 41° 39° 37° 35° RUSSIA ARMENIA Yerevan AZERBAIJAN TURKEY ▲AMULSAR Republic of ARMENIA Capital Project 37° LEBANON IRAN SYRIA IRAQ RUSSIA CASPIAN SEA 41% 100 km 50 mi 39° 41° 43° 45° 49° 51° LYDIAN INTERNATIONAL 45° 43° 39° 37° 35° Over 1000-year mining history Independence 1991 Member of WTO since 2003 Mineral resources: - 60% by value of exports New World Bank guided Mining Law, Jan 2012 Democratic presidential republic Presidential election Feb 2018 Parliamentary election May 2017 Population - 3.2 million lydianinternational.co.uk#1010 10 Amulsar, Armenia GEORGIA 44° 45° 46° 41° Armanis TURKEY Tukhmanuk 40° 39° Republic of ARMENIA Capital Project Other producing company Main highway 50 km 20 mi 44° Yerevan Lake Sevan Zod AMULSAR 45° ㅁ AZERBAIJAN Kapan Kajaran IRAN 46° LYDIAN INTERNATIONAL 41° 40° Amulsar will be the largest gold mine in Armenia ■ Located 170km from the capital, Yerevan Taxes*: 4% Tax Deductible Royalty 'Top Line' 39° Other mining companies in Armenia Kapan DPM (Canadian Public), Copper Moly Kajaran - Cronimet (German Private), Copper Moly Agarak - GeoProMining (Russian Private), Copper Moly Zod - GeoProMining (Russian Private), Gold Tukhmanuk - Global Gold Corp (US Public), Gold/Silver Teghut - Vallex Group (Armenia Private), Copper Moly • 12.5% Tax Deductible Royalty • 'On profit before interest charges' 20% Corporate Tax *Please see www.lydianinternational.co.uk for a detailed explanation on Armenian mining taxes lydianinternational.co.uk#11Gold Price Amulsar All-in Costs LYDIAN INTERNATIONAL Lydian cash costs were done using an estimated $1,200 Gold price as assumed in Sept 2012 FS Global average all-in costs estimated from Sept 2013 Cash costs pre tax and royalties LYDIAN INTERNATIONAL Cash costs: All-in costs: $469/oz $750/oz $1,400 $1,200 $1,000 $800 Pre-Tax Margin All-in $600 Costs $400 Cost to produce an ounce Cash of gold $200 Costs $0 Gold Price Global Producers Average Cash costs: All-in costs: $738/oz $1,250/oz $1,400 $1,200 $1,000 All-in Costs $800 Pre-Tax Margin $600 Cost to produce an ounce of gold Cash $400 Costs $200 $0 11 Total cash cost per ounce for Lydian as reported in the Feasibility Study on September 7, 2012. Global Average 2012 cash costs estimated by GFMS. Cash costs are costs of production, at site level, to produce an ounce of gold (transport, mining and admin. All-in cash costs include corporate and administrative costs, sustaining capex, exploration costs, and royalties.) Information sourced from the GMFS report Sept 2013 and RBC. lydianinternational.co.uk#1212 Achievements To Date ΕΙΑ ΕΙΑ Approval for Processing Approval Open Pit and Waste Dump Mining Licence Concession Agreement and RAA International ESIA document Components Completed ESIA report Submission LYDIAN INTERNATIONAL Heap Leach Relocation Approval Extension of Company's production deadline Feb 2012 July 2012 Sept 2012 July 2013 Aug 2013 Q3 2013 Q3 2013 I ΕΙΑ approved for open-pit and Rock I for original mining and EIA approval Mining Licence Baseline Allocation Area | Impact To the Government/ studies and Armenian I Working Government/ I Group Until September 2018 Heap location of I (RAA) granted. I Analysis & Ministries. & Lydian Leach waste dump I Manage- location, facility. I Mining Licence ment Plans Stakeholder crushing valid until 2034 and | Conveying facility and ADR Plant. with extensions | I permitted as I new resources | I are approved. I I Executive | Summary, I Completed I I Document Engagement ¡Plan, representatives conclude HL location is I suitable lydianinternational.co.uk#13Development Process LYDIAN INTERNATIONAL О Q1 2014 О Q1 2014 Q2 2014 Q2 2014 О Q2 2014 Q3 2014 Q4 2014 О Q3 2014 Mine Design lock down submission of FS design to impact assessment consultants Sustainable Mining Conference Including all members of the Government/Ministries, also UK/US Ambassadors and guest speakers Framework Agreement executed with Government Submission of Mining Right application to Government included project description, mine plan, EIA and technical safety documents Updated Feasibility Study Revision to ESIA addressing new HL location Incorporating new baseline studies; Biodiversity, visual and Social impacts Permitting completed Detailed Engineering With updated FS plans Construction Permits Granted PRODUCTION Best Case late 2016 Q1 2015 Construction phase begins - build over 2 summer 13 lydianinternational.co.uk#1414 Million ounces Amulsar Resource Growth LYDIAN INTERNATIONAL Drilling Year RC DD (m) 4.5 2007 593 2008 4.0 2009 2010 2011 3.5 2012 2013 3.0 TOTAL 593 10,363 2,679.5 13,042.5 12,446 1,089.8 13,535.8 17,036 7,886.9 24,922.9 23,099 15,027.5 38,126.5 6,720 13,837.9 20,557.9 5,258 4,609.8 9,867.80 74,922 45,724.4 120,646 Measured Indicated Inferred 1.8 2.5 2.0 1.5 1.0 1.1 0.9 0.9 1.4 1.4 0.5 1.0 1.0 0.6 1.7 0.0 2009 2010 2011 2012 2013 Year lydianinternational.co.uk#15Potential Growth 560,000 mE N 561,000 mE 562,000 mE 4,400,000 mN 4,397,000 mN 4,398,000 mN 4,399,000 mN Open at depth ERATO NORTH B ERATO Open B' at depth TIGRANES ARTAVASDES Open at depth A' ARSHAK Open at shallow depth 15 560,000 mE 561,000 mE 562,000 mE C 4,400,000 mN 4,399,000 mN 4,398,000 mN 4,397,000 mN LYDIAN INTERNATIONAL Resource remains open with potential upside along-strike particularly at depth and 0 0 LEGEND Amulsar resource @ 0.3 cut-off Amulsar resource upside Amulsar drill holes (2007-2013) Section lines Amulsar reserves pit ( US $ 900 oz) (FS, Sept 2012) Amulsar resource pit (US $ 1200 oz) (AMC, April 2013) 1 km lydianinternational.co.uk#16Cross Section - Erato 16 560400 E A 105 Az 2900 RL 2800 RL 2700 RL DDA-380 560600 E 4m @1.1 gtAu LEGEND Amulsar resource @ 0.3 cut-off Amulsar resource upside 560800 E 4399400 N 561000 E RCA-522 [email protected]/t Au 2m @ 1.3 g/t Au RCA-515 180m (EQH) @ 1.3 gft Au 561200 E DDA-383A DDA-383 LYDIAN INTERNATIONAL 561400 E A' 2900 RL 2800 RL 11m @ 1.0 g/t Au Drill hole bogged and abandoned 2700 RL Drill hole bogged and abandoned 2600 RL Open Amulsar drill holes (2007-2012) Amulsar drill holes (2013) Au g/t 0-0.1 0.1-0.35 0 Amulsar reserves pit (US $ 900 oz) (FS, Sept 2012) 0.35-0.6 meters 0.6-1.2 О >1.2 Amulsar resource pit (US $ 1200 oz) (AMC, April 2013) 200 Open 561200 E 561400 E 2500 RL 2400 RL lydianinternational.co.uk#1717 Cross Section - Tigranes 561200 E 2900 RL 2800 RL 2700 RL B 561200 E 121 Az DDA-375 4398400 N 4398400 N RCA-505 561400 E 221m (EOH) @1.2 g/t Au 561400 E Open 0 4398200 N 561600 E LEGEND LYDIAN INTERNATIONAL 561800 E B' 2900 RL 2800 RL Amulsar resource @ 0.3 cut-off Amulsar resource upside Amulsar drill holes (2007-2012) Au g/t Amulsar drill holes (2013) 0-0.1 0.1-0.35 0.35-0.6 Amulsar reserves pit (US $ 900 oz) (FS, Sept 2012) 0.6-1.2 100 >1.2 Amulsar resource pit (US $ 1200 oz) (AMC, April 2013) meters lydianinternational.co.uk#18Long Section 3400 RL 560500 E 3200 RL 0 3000 RL 2800 RL 148 Az 2600 RL 18 4399500 N ERATO Open 561000 E 4399000 N 4398500 N 561500 E TIGRANES 4398000 N Open LYDIAN INTERNATIONAL 4397500 N LEGEND Amulsar resource @ 0.3 cut-off 0 Au g/t Amulsar reserves pit (US $ 900 oz) (FS, Sept 2012) 0-0.1 0.1-0.35 Amulsar resource upside Amulsar drill holes (2007-2013) 0.35-0.6 Amulsar resource pit (US $ 1200 oz) (AMC, April 2013) 0.6-1.2 >1.2 0 500 meters 562000 E ARSHAK 3400 RL C' 3200 RL 3000 RL Open at shallow depth 2800 RL 4397500 N 562000 E 2600 RL 2400 RL 2200 RL 4397000 N 8 lydianinternational.co.uk#1919 Sustainable Development Income building generation and development projects capacity community Local employment & development training optimise for construction - and production Improve livelihood standards - better a of living and sustainable development approach beyond operation and closure LYDIAN INTERNATIONAL Social Programs within the local communities continuing through 2013: "Schools for Sport & Peace" program: for 180 children and Summer Camp for 90 children on sport, education, team work and leadership 50 Improved livelihood in Gorayk by introducing new gardening technologies for households (230 persons) benefiting from increased yield & income Garbage collection in 3 rural communities with improved sanitation Renovation of Jermuk Art School, Sport Complex & Kindergarten with interior and roof repair, new equipment and modern facilities benefiting 150 children & youth Student support program for 12 students to study mining engineering lydianinternational.co.uk#20Financing LYDIAN INTERNATIONAL Working assumption continues to be two- thirds debt and one- third equity Estimated cost for FS and ESIA updates US$3m, low burn rate for H1/14 Debt solutions: - 16 Banks have conducted site visits to Amulsar including IFI and Commercial Management continues to have dialogue with interested lending banks and IFIs ■ Recent studies suggest the Project will support significant commercial debt Equity financing: ■ will depend on share price and could include a quasi-equity component e.g. silver streams, royalty or convertibles 20 20 lydianinternational.co.uk#2121 Experienced Management/ Development Team Mr Howard Stevenson (Chief Executive Officer) MBA Executive Degree; 25-yrs of global mining experience in corporate strategy, engineering, mine development/operations, mineral economics, business development and mergers & acquisitions on projects around the world. He has held senior management positions supervising the construction of the Çöpler gold mine, building a successful heap leach operation and overseeing the commencement of production and ongoing operations at the mine. Mr Roderick Corrie (Chief Finance Officer) BA Cambridge, MA (Cantab), Associate member of the Chartered Institute of Bankers, Member of the Securities Institute. Dr Hayk Aloyan (Managing Director, Armenia) PhD Ore Deposit Geology; 17-yrs experience, formerly Deputy Chief of Geological Survey in Armenian Mining and Metallurgical Institute, widely published on Armenian metallogenesis, specialist in resource estimation. LYDIAN INTERNATIONAL Mr Marc Leduc (Chief Operating Officer) B.Sc. (Honors) Mining Engineering; 24-yrs experience as a mining engineer and geologist involving all aspects of the development, operations, planning and evaluation of mining projects. He has experience working in Peru, Brazil, Chile and Canada where he has led technical teams in the design and construction of large mines, heap leach and tailings facilities, whilst working in the area of complex metallurgy, site water management and heap planning. Mr Didier Fohlen (Executive Vice President) Engineering Degree School of Geology and Mines of Nancy; 33-yrs experience in exploration, mining operations and mine closure, with focus on environmental, social and governance. 15-yrs in the World Bank Group working on mining investments, interacting with major mining companies. Significant experience in Europe and the Former Soviet Union. Mr Alan Turner (Manager of Technical Services, Amulsar) BSc (Hons) Applied Geology, MSc Mining Engineering (Camborne School of Mines), member of the Institute of Materials, Minerals & Mining; 10-yrs experience in both operations and consulting in gold and base metal mining across Europe, Asia, Africa and the Former Soviet Union. Specialises in mine optimisation and planning. lydianinternational.co.uk#22Strong Support LYDIAN INTERNATIONAL MAJOR SHAREHOLDERS Country Sprott Asset Managment CAPITAL Canada Van Eck US BMO Amber Capital US IFC (part of World Bank) US EBRD UK BROKER MARKETS HAYWOOD GMP Securities Griffiths McBurney Scotiabank ANALYST Tara Hassan John Hayes Oliver Turner Invesco Canada Canada Franklin Advisors US First Eagle Investment Mgnt US NATIONAL BANK FINANCIAL RBC Capital Markets TM Trevor Turnbull Shane Nagle Jonathan Guy RBC Global Asset Mangment Canada RBC Mackenzie Financial Canada Fidelity Mgnt & Research US CORMARK SECURITIES INC. AGF Investments Canada TD Securities Amundi Asset Management France TD DUNDEE CAPITAL MARKETS Josh Wolfson Mike Kozak Daniel Earle 22 22 lydianinternational.co.uk#23Empty#2424 Contact Information Donna Pugsley (Investor Relations) BA Hons degree in Media Communications and Publishing. Over 2 years experience in Trust Administration and Public Relations. E-mail: [email protected] Lydian International Limited Ground Floor, Charles House, Charles Street, St. Helier, Jersey JE2 4SF Tel: +44 (0) 1534 747 890 Fax: +44 (0) 1534 758 708 Website: www.lydianinternational.co.uk in ft You Tube LYDIAN INTERNATIONAL lydianinternational.co.uk