Armenian villagers are locked in what they say is a David-and-Goliath style battle for the environment and their livelihoods, standing guard around the clock to protect their land from a multinational mining company. Protesters say planned gold mining in the south will not only pollute drinking water but also damage some of the top tourist spots in the small Caucasus mountain nation. Prime Minister Nikol Pashinyan, however, insists the project at Mount Amulsar is a vital source of foreign investment and a sign his country is open for business. Pashinyan was brought to power last year on the back of popular protests, but activists' efforts are now directed against him and a perceived preference for investment over the wellbeing of his people. "The mine will pollute water, soil, and air," said Erazik Stepanyan, a 57-year-old from Gndevaz, a tiny village a few kilometres (miles) from Mount Amulsar. "We don't want our children to suffer from serious illnesses, we will not let anybody defile our nature." The project is being developed by Armenia's biggest foreign investor, the British-American company Lydian. Work has been on hold for over a year after activists and locals set up pickets, blocking access to the construction site. "We will fight till the end so that Amulsar never becomes a mine," said 18-year-old Suzi Hunanayan, whose family has taken part in the pickets. The sentiment is shared in the spa town of Jermuk, where locals fear the mine would destroy their main source of income. "No tourist will come to Jermuk if such a hazardous mine is being exploited nearby. Our businesses will be destroyed," said Mkhitar Stepanyan, who sells medicinal herbs. "Nobody will buy my herbs in fear they are poisoned by the discharges from the mine," he said, looking anxiously at sheaves of chamomile, St. John's wort, and mint piled up at his kiosk. The planned mine is near the sources of rivers which flow into picturesque Lake Sevan, another tourist draw and the country's main source of drinking water. Demonstrations against the mine have spread to the capital Yerevan, where thousands of people took to the streets last month chanting: "No to ecological disaster!" In August, protesters blockaded the country's presidential palace and parliament, demanding the project be ditched. - 'Unmanageable ecological consequences' - Lydian, which has already spent some $400 million to develop Amulsar's deposits of gold ore -- which contain an estimated 40 tons of pure gold -- has dismissed ecologists' fears as unsubstantiated. The company denounced an "enormous misinformation around the Amulsar project" as part of a "campaign by rival mining companies." "Lydian has been fully transparent in its environmental and operating practices. Those practices meet or exceed all applicable international standards," the company's managing director, Hayk Aloyan, told AFP. But local ecologists have warned of the potential dangers. Karine Danielyan, head of the NGO Association For Sustainable Human Development, said chemicals used in the mining process could lead to the oxidation of water in major rivers. This would make them "unusable for irrigation and drinking." "Water pollution could harm irreparably the ecosystem of the Lake Sevan and the mineral water sources in Jermuk," the resort which gave its name to Armenia's most famous mineral water brand, she said. The director of Armenia's Institute of Chemical Physics, Seyran Minasyan, warned of "unmanageable ecological consequences" if the project is given the go-ahead. "All the mines in Armenia are being operated barbarically, with no respect of ecological norms," he added. - Shaken public trust - In a video statement posted when protests broke out in Yerevan, Pashinyan insisted the project would be completed and downplayed potential ecological risks. He said Armenia's investment climate will be seriously damaged if the project -- which will boost Armenia's GDP by $185 million annually and create hundreds of well-paid jobs -- goes under. Political analysts said Pashinyan's backing of the project has shaken public trust in the leader, who has enjoyed widespread popularity among Armenians, long frustrated with the corrupt elites he has swept from power. "The Amulsar case might lead to divisions within Pashinyan's ruling-party majority in parliament," said analyst Vigen Hakobyan. "He is under serious pressure both from civil society and from a big transnational corporation backed by the US and British governments."