TORONTO, ONTARIO--(Marketwire - July 25, 2011) - Lydian International Ltd. (News - Market indicators) ("Lydian" or "the Company")

Lydian International Ltd. (News - Market indicators) ("Lydian" or "the Company"), a gold-focused mineral exploration and development company, is pleased to announce the results of a positive NI 43-101 compliant Preliminary Economic Assessment ("PEA") for its 100% owned Amulsar Gold Project in Armenia. Amulsar is a high-sulfidation style gold project which currently hosts a CIM compliant combined Indicated and Inferred Category Resource of 2.5 million ounces at 1.0g/t gold (1.1 million ounces at 1.1g/t gold in the Indicated Category and 1.4 million ounces at 0.9g/t gold in the Inferred Category).

The Base-Case for the PEA modeled contract mining (CM) and owner operated mining (OOM) scenarios based on a conservative US$1,000 per ounce gold price pit shell (see press release May 16^th, 2011) and 1.64 million potentially mineable gold ounces from the Tigranes and Artavasdes areas only of the Amulsar project. The study also tested the potential of both mining scenarios on the inclusion of a further 0.46 million gold ounces (OOM), and 0.36 million ounces (CM) of potentially mineable mineralization from the Erato area but considered this to be a Sensitivity Case as the current drill-spacing at Erato is considered too sparse for inclusion in the Base-Case.

"We are very pleased with the results of this study, particularly considering the fact that the Base-Case is premised on a conservative pit shell at the Tigranes and Artavasdes areas only and optimized using a gold price of US$1,000 per ounce" said Tim Coughlin, Lydian's President and CEO. "The Sensitivity Case shows the impact of adding further resources at Erato and obviously increasing the resource there, and at newly identified areas at Amulsar is a major focus of the 2011 drill program. This PEA is in line with expectations at this stage of the projects' development and we are confident we can further improve the economics by increasing the overall resource and resource confidence with additional drilling and by future engineering studies later this year".

PEA Study Basis and Options

The National Instrument 43-101 (NI 43-101) compliant report has been prepared by KD Engineering for Lydian based on work by the following independent consultants:

• KD Engineering (KDE)
• CSA Global (CSA)
• Golder Associates International (GAI)
• SGS Lakefield (SGS)
• Wardell Armstrong International (WAI)

The report summarizes the mining and geology, completed by CSA; the metallurgy completed by SGS and WAI, the process and infrastructure design and financial model by KDE; the leach pad/pond design by GAI; the environmental by WAI; and the capital/operating cost estimates and schedule by KDE.

This Preliminary Economic Assessment has been completed to a +35/-5% level of accuracy.

The production strategy is to process 5Mtpa of ore from Year 1-3, with a proposed plant expansion to 10Mtpa in Year 4. The phased production strategy will enable local Armenian personnel to become familiar with the high mining rates and allow capital cost for the proposed plant expansion in year 4 to be funded from operating cash flow.

1. Base Case - Tigranes/Artavasdes resource ounces
2. Sensitivity Case - Tigranes/Artavasdes/Erato resource ounces

1. Owner Operator mining (OOM)
2. Contract mining (CM)

KDE adopted historical three-year average metal prices for the Base Case, which is considered an industry standard and is consistent with CIM requirements.

The open pit optimization study assumed a spot gold price of $1,000 per ounce and 80% gold recovery. Whilst the financials used a gold price of $1,200 per ounce with labour and mining operating costs generated from local and similar operations as of Q3-2011.

An average silver grade of 3.63g/t has been assumed in the financial model. The silver grades are not included in the mine ore schedule and have not been signed off by CSA. A silver recovery of 40% and a spot silver price of US$20 per ounce were used in the model inputs.

Mineral Resources Used in the Mine Plan

Drilling to date has delineated a CIM compliant Indicated and Inferred Mineral Resource, reported at a 0.4g/t cut-off totalling 80.7Mt @ 0.97g/t gold for 2.52Mozs, 32.4Mt @ 1.1g/t gold for 1.1 Mozs contained within the Indicated Resource and 48.3Mt @ 0.9g/t gold for 1.4 Mozs contained within the Inferred Resource.

1. The CSA Mineral Resource was estimated by construction of a block model within constraining wireframes.
2. The resource is reported at lower cut-off grade of 0.4g/t Au, which defines the continuous/semi-continuous mineralized zone potentially amenable to the low grade, bulk tonnage mining scenario currently being considered by Lydian.
3. Apparent differences may occur due to rounding errors. The resource reported has been rounded to reflect the fact that it is an approximation.
4. Mineral resources are reported in accordance with the CIM Code.

1. Inferred resources are too speculative to have economic considerations applied to them and there is no certainty that the inferred resources will be converted to measured and indicated resources.

Conversion of Resources into Potentially Mineable Material

The level of confidence in the technical studies complete to date would not support the presentation of a Reserves Statement for the Amulsar Project. All resources captured by the open pit optimization study cannot be converted to Reserves, but can only be referred to as Potentially Mineable Material ("PMM").

The table below summarizes the total rock tonnes, in-situ and diluted PMM tonnes and grades, waste tonnes and in-situ and diluted gold content within the final designed pit shell.

Mining Plan

Large scale open pit mining for the Amulsar Project will provide stacked ore at a nominal rate of 5Mtpa for Years 1-3, and from Year 4 onwards at 10Mtpa until the end of the mine life. Annual mine production of ore and waste will peak at 37 Mtpa, with a life-of-mine stripping ratio of 2.5:1. The base case pit design was optimized at US$1,000/oz gold and 80% gold recovery.

The mining method assumed for the Amulsar deposit considered in this study will be conventional open pit mining, with drilling and blasting of waste on 10m benches and drilling and blasting of ore on 5m or 10m benches, depending on the ore demarcation required for grade control purposes. Load and haul will be done on flitches varying between 5m and 10m in height. The general process of loading ore and waste will use backhoe or shovel type excavators with the excavator sitting on the production bench while the haulage trucks are loaded on the level below.

The overall mining sequence was developed through a series of mining push-backs specific to the Tigranes and Artavasdes open pits. This approach was designed to:

• Provide access to the higher grade mineralization in the Tigranes and Artavasdes.

• Maintain a smooth waste/ore ratio as mining progresses to ultimate depth.

Metallurgy and Mineral Processing

Metallurgy

Lydian has carried out a number of scoping testwork programs at both SGS Lakefield (SGS) and Wardell Armstrong International (WAI).

Coarse bottle roll leach tests conducted at SGS showed that for all tests a gold recovery of 90% was established after only 8hours, and reached 95% after 24hours, both with moderate NaCN consumptions.

The results suggested that the mineralization is amenable to heap leaching and conventional whole ore cyanidation. The recovery of gold was in the range of 96-97%, leaving a residue assay of 0.03-0.06 g/t gold. The reagent consumptions were very low, below 0.1 kg/t NaCN and 0.3 kg/t lime.

Further test work conducted at SGS was carried out on three master composites of half drill core samples from different parts of the Tigranes and Artavasdes areas (labelled A, B and C in the table below).

The composites are differentiated by alteration style, and gold and multi-element distribution. The three composites had head grades ranging from 1.09 to 1.29 g/t Au.

The overall final gold recovery attainable for each composite, and testing of whole ore/coarse ore cyanidation bottle roll leach tests, and the column leach tests are shown in the following table:

Based on these test results, there is a direct relationship between the metal recoveries and liberation size.

Further column leach tests conducted at WAI in 2010, with varying crush size and cyanide concentration, resulted in leach recoveries of >90% at a crush size of 100% -19mm.

An overall design gold recovery of 85% has been set at a crush size of 100% -12mm. This takes into account gold losses in scaling-up from laboratory to the full scale heap leach.

Mineral Processing

The Amulsar crushing and stacking plant is designed to nominally crush and stack 15,000 t/d of ore in Years 1-3 and 30,000 t/d from Year 4 onwards, to produce gold and silver bullion.

The process will use conventional heap leach technology requiring leaching of the crushed ore by cyanidation, adsorption onto activated carbon, followed by desorption, electro-winning and smelting to produce dore.

Leach Pad

The valley leach fill ("VLF") design incorporates engineered features to manage the chemical and physical stability of the stacked ore in accordance with current best-in-class practices. The VLF has been designed to contain a total capacity of 75Mt of crushed ore and will be developed in three phases.

Capital Costs

The initial and sustaining capital costs for the base case OOM and CM options are shown in the following table:

Operating Costs

On site operating costs for the base case are estimated to be $10.58 OOM option and $12.60 per tonne for the CM option including administrative, and plant services costs. per tonne of ore leached for the mining, processing, general and

The unit costs are based on annual ore production of 15,000 t/d for Year 1-3 and 30,000t/d for Year 4-7 and 330 days of operation; these costs are shown in the following table:

Sensitivities

A sensitivity case has been run including the Erato resource ounces. The financial highlights for the OOM and CM options are shown in the following table:

• Three year average metal prices (London Metal Exchange)

• Smelting and refining charges

• Gold recovery of 85%

Metal price scenarios were used in the pre-tax model to evaluate the sensitivity on NPV, IRR, and payback. The results for the base case mining options are shown below in are shown in the following tables:

The above pre-tax NPV and IRR evaluations were completed using a gold price of $1,200/oz and a gold recovery rate of 85%.

Project Development Plan

Lydian will complete its 40,000 m drill program in Q4 2011. More detailed metallurgical testing and a full Environmental Social Impact Assessment study will also be conducted in 2011. Although further extension drilling will likely continue, a resource update will be performed in late Q4 2011 dovetailing into the completion of a full Bankable Feasibility Study in Q2 2012. Lydian plans to be in production by Q2 2014.    

PEA Guidelines

This Study constitutes a Preliminary Economic Assessment for NI 43-101 purposes that is considered preliminary in nature and uses inferred resources which are considered too speculative geologically to apply economic considerations that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not demonstrated economic viability. There is no certainty that these inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied. Thus, there is no certainty that the production profile concluded in the PEA will be realized.

Qualified Persons responsible for preparation of the Preliminary Economic Assessment are;

Mr. Galen White, of CSA, is the qualified person for all matters relating to the mineral resource estimate.

Mr. Joe Keane, P.Eng., of KDE, visited the property May 2011, and is the Qualified Person for matters relating to the processing facility.

Mr. Richard Kiel, P.Eng., of GAI, visited the property in June 2011, and is the Qualified Person for all matters relating to the leach pad/pond design.

Mr. Kent Bannister, MAusIMM CP, of CSA, is the qualified person for all matters relating to open pit and mine design.

About Lydian International

Lydian is a gold-focused mineral exploration and development company with expertise employing "first mover" strategies in emerging exploration environments. Currently Lydian is focused on Eastern Europe and on developing its flagship Amulsar gold project in Armenia. The Amulsar group of licenses is wholly owned by Lydian's Armenian subsidiary (Geoteam CJSC). Lydian also has a pipeline of promising early-stage gold and base metal exploration projects in the Caucasus regions.

Lydian's management team has a track record of success in grassroots discovery, in acquiring and developing undervalued assets, and in building companies. Lydian has a strong social agenda and a unique understanding of the complex social and political issues that characterize emerging environments. The Company's significant shareholders include the International Finance Corporation (IFC) which is a member of the World Bank Group and the European Bank for Reconstruction and Development (EBRD). More information can be found on Lydian's web site at www.lydianinternational.co.uk.

Lydian employees are instructed to follow standard operating and quality assurance procedures intended to ensure that all sampling techniques and sample results meet international reporting standards. All assay work for the released results was carried out by ALS Chemex analytical laboratory in Rosia Montana, Romania. More information can be found on Lydian's web site at www.lydianinternational.co.uk.

FORWARD-LOOKING STATEMENTS

This news release may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate" and other similar words, or statements that certain events or conditions "may" or "ill" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors described above and in the Company's most recent annual information form under the heading "Risk Factors" which has been filed electronically by means of the Canadian Securities Administrators' website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.