The company said it had applied to draw water from the Darb River in July at 43.5l/s but in September its application was suspended, with a comment the volume needed revisiting due to insufficient water in the river during three months of the year.
It amended its application to request 40l/s in September, as suggested in discussions between the environment ministry and the company.
However it received a written rejection of its water use application on October 31.
The company said its Armenian legal counsel had advised if the ministry failed to decide on a request within 50 business days of an application, the permit was deemed granted.
It said it would file an application with the Administrative Court of Armenia "to oblige the ministry to provide Lydian with a physical copy of the water permit the company is entitled to under Armenian law".
"It is regrettable that Lydian must once again seek assistance from the Armenian judiciary to address unlawful attempts to interfere with Lydian's legal right to develop and operate the Amulsar project," interim president and CEO Edward Sellers said yesterday.
"Just last month, the Administrative Court found that a former official of the government of Armenia had been acting illegally to prevent the company from advancing the Amulsar project.
"It now appears that a minister in the government of Armenia is also acting illegally to prevent Lydian from advancing the Amulsar project."
The Administrative Court upheld Lydian's appeal in October against a directive of the country's Environmental and Inspection Body last year which had prevented mining at its flagship Amsular project.
However Amulsar construction could not resume while a blockade, which began in June 2018, remains in place.
Lydian envisages Amulsar as a large-scale, low-cost operation producing an average annual 204,000 ounces over 12 years.
Its shares are down 56.2% year-to-date and closed at C7c yesterday, 0.5c above a 52-week low.
It is capitalised at $53.2 million (US$40.4 million).