TORONTO – Lydian International Limited (TSX: LYD) ('Lydian' or 'the Company') announced today its results for the three months ended March 31, 2019.

All dollar amounts referenced in this news release are, unless otherwise indicated, in United States dollars.

First Quarter 2019 and recent developments include: Illegal Blockades – The blockades continue at Lydian's Amulsar Gold Project, having been in place since June 22, 2018. As a result, two of Lydian's subsidiaries formally notified the Government of Armenia on March 11, 2019 of the existence of disputes with the Government of Armenia under the UK bilateral investment treaty and the Canada bilateral investment treaty.

Third Audit – In March 2019, the Government of Armenia commenced its third-party assessment of the Amulsar Gold Project's environmental impact on water resources, geology, biodiversity, and water quality. The duration of this audit is expected to be 12 to 16 weeks. The Company does not accept the need or legal basis for this audit but is cooperating fully with this audit as it progresses.

Court Rulings – Armenian courts have recently issued two rulings in Lydian's favour: On April 10, 2019, the Administrative Court of the Republic of Armenia ruled in favour of Lydian and instructed the Armenian Police to remove trespassers and their property from the Company's Amulsar Project site. The Administrative Court's ruling was effective May 10, 2019 unless appealed prior to that date. The Company is not aware of any appeal having been filed during the prescribed period and has requested official acknowledgement from the Administrative Court that the order is effective. Following receipt of this acknowledgement, Lydian will demand enforcement of the order if not already acted upon by the Armenian Police and The Criminal Court of Appeal of the Republic of Armenia ruled on April 19, 2019 that the police are to initiate a criminal investigation against protesters. The Prosecutor has fifteen days from the official receipt of the judgment to appeal to the Cassation Court of Armenia (the highest Armenian court). Lydian received official notice of the judgement on May 13, 2019 and has been informed unofficially that the Prosecutor received the judgement on May 13, 2019. Therefore, Lydian believes the Prosecutor has 15 days from May 13, 2019 to register an appeal.

Hydrogeological Survey – The Company completed an isotopic investigation of groundwater systems at Amulsar and the Jermuk area, confirming the findings of the Amulsar Project's EIA and ESIA by conclusively demonstrating that there is no hydraulic connection between the groundwater regimes at the Amulsar Project and Jermuk.

Going Concern Implications

Following a change in the Government of Armenia in May 2018, demonstrations and road blockades occurred sporadically throughout the country. These initial protests primarily targeted the mining sector, including the Amulsar Gold Project. Despite recent court rulings in favour of the Company, a continuous illegal blockade at Amulsar has been in place since June 22, 2018, causing construction activities to be suspended since this date. Access has generally been limited to contractor demobilization and winterization during Q4 2018.

The Government of Armenia has not enforced the rule of law to remove the illegal blockades at Amulsar and prosecute other illegal acts carried out against the Company. Furthermore, the Government of Armenia has taken certain actions and failed to act on other matters. The Government of Armenia's actions and inactions have substantially restricted the Company's access to capital and caused conditions to occur that were deemed events of default by the senior lenders, stream financing providers, and equipment financiers. As a result, in December 2018 the Company entered into an amended and restated forbearance agreement (the 'AR Forbearance Agreement') and, thereafter, in January 2019 the Thirteenth Amending Agreement (the 'Thirteenth Amending Agreement') and the AR Stream Agreement (the 'AR Stream Agreement') with its senior lenders, stream financing providers, and equipment financiers.

The Company's ability to continue as a going concern is dependent upon the Government of Armenia resolving the disputes it has created with the Company and making the Company whole. It will also be necessary for the Company to continue to receive forbearance under the AR Forbearance Agreement and funding under the Thirteenth Amending Agreement. Blockade-related costs will continue to be incurred until the illegal blockades are removed and unrestricted access for all purposes is available to the Company. Thereafter, the Company anticipates additional time and funding will be needed for site restoration, sourcing of financing, if available, for completing construction and working capital until positive cash flows from operations can be achieved. Alternatively, funding will be required until a strategic alternative can be arranged, if at all, or to support the Company's legal alternatives.

While the Company has entered into the AR Forbearance Agreement with its senior lenders, stream financing providers, and equipment financiers, as a result of the actions and inactions of the Government of Armenia there is no assurance that the Company will be able to meet its obligations under the applicable credit or loan agreements with its senior lenders, stream financing providers, and equipment financiers and that the Company will avoid further events of default as contemplated under such agreements. As a result, the Company may not be able to receive forbearance and continuing funding from the same parties under the AR Forbearance Agreement, the Thirteenth Amendment, and the AR Stream Agreement. Therefore, there is a risk that the Company will be in default under its agreements with its senior lenders, stream financing providers, and equipment financiers, which may ultimately result in one or more secured parties exercising rights to demand repayment and enforcing security rights, which may result in partial or full loss of the assets of the Company. During this forbearance period, Lydian will continue to engage with its lenders and stream financing providers to address the issues resulting from the illegal blockades and seek continuing forbearance and funding, while at the same time evaluating a range of strategic, financing, and legal alternatives.

Although the Company has obtained sufficient financing to date, including during the period of the illegal blockades and as provided in the AR Forbearance Agreement, the Thirteenth Amendment, and the AR Stream Agreement, as a result of the actions and inactions of the Government of Armenia there can be no assurance that adequate financing will be available when needed at commercially acceptable terms and that the Company will ultimately be able to generate sufficient positive cash flow from operations, find an acceptable strategic alternative, or fund legal alternatives. Furthermore, there are no assurances of future forbearances or lenders not demanding repayment and exercising security rights under the respective credit agreements. These circumstances indicate the existence of material uncertainties that create significant doubt as to the Company's ability to meet its obligations when due, and accordingly, continue as a going concern.

At March 31, 2019, the Company recognized an additional non-cash impairment loss of $ 28.0 million. More detailed financial and other information can be found in the Company's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2019, which are available on SEDAR under the Company's profile ().