LONDON, UNITED KINGDOM--(Marketwire - April 12, 2011) - Orsu Metals Corporation (the "Company" or "Orsu") (News - Market indicators)(AIM:OSU), the London-based precious and base metals exploration and development company, is pleased to announce that it has completed the acquisition of the remaining 26.1 per cent interest in Eildon Enterprises Limited ("Eildon"), a company registered in the British Virgin Islands which owns 94.75 per cent of GRK MLD LLC ("MLD"), pursuant to a sale and purchase agreement entered into on May 20, 2010. MLD is the holder of the exploration and production contract relating to the Karchiga volcanogenic massive sulphide deposit in Kazakhstan (the "Karchiga Project") granted by the Ministry of Energy and Mineral Resources (Competent Authority) of the Republic of Kazakhstan on February 28, 2007 and valid until February 28, 2024. The purchase price for the acquisition was US$6,187,500, satisfied entirely in cash.
Orsu is also pleased to announce that it has received permission from the Ministry of Industry and New Technologies of the Republic of Kazakhstan to commence mineral extraction for copper at the Karchiga Project.
The Karchiga Project is located in the northeast of Kazakhstan within the mid-Palaeozoic Rudny Altai terrain which hosts numerous world class volcanogenic massive sulphide deposits, including the Leninogorsk (also known as Ridder-Sokolnoye), Zyryanovsk, and Maleevskoye deposits. A National Instrument 43-101 technical report on the Karchiga deposit dated March 22, 2010 (the "Karchiga Report"), was prepared by Wardell Armstrong International Limited. In May 2010, Micon International Co Limited completed a preliminary assessment or scoping study for the Karchiga Project on behalf of Orsu (the "Karchiga Scoping Study"). The base case scenario showed a discounted cash flow, over a mine life greater than 10 years, with a Net Present Value of approximately $138 million, after applying a discount rate of 10% per annum and assuming an initial capital cost of approximately US$100 million, and an Internal Rate of Return of 40.5% based on a flat copper price of $3.00/lb. In September 2010, the Company initiated a Definitive Feasibility Study for the Karchiga Project, which is progressing well and which the Company anticipates will be completed in Q3 2011.
Notes to editor:
- The technical report related to the Karchiga Scoping Study is entitled "Preliminary Assessment of The Karchiga Copper Project, East Kazakhstan Region, Kazakhstan", is dated May 25, 2010 (the "Karchiga Scoping Study Report") and was prepared by L S Carroll, MIMMM CGeol FGS, G Harris, MAusIMM, M L Owen, CGeol EurGeol FGS, J Steedman, MAusIMM and D T Wells, MIMMM CEng of Micon International Co. Limited (each of whom is independent of Orsu). A copy of the Karchiga Scoping Study Report is available under the Company's profile on SEDAR (www.sedar.com). The Karchiga Scoping Study Report is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Accordingly, there is no certainty that the conclusions of the Karchiga Scoping Study Report will be realized.
- The Karchiga Report is entitled "Updated Report on the Karchiga Property held by Orsu Metals Corporation, Kazakhstan", is dated March 22, 2010 and was prepared by M L Owen and L S Carroll of Wardell Armstrong International Limited. A copy of the Karchiga Report is available under the Company's profile on SEDAR (www.sedar.com).
- Alexander Yakubchuk, PhD, Director of Exploration and Chief Operating Officer for Orsu and a "qualified person" as such term is defined in National Instrument 43-101 and for the purposes of the AIM Guidance Note for Mining, Oil & Gas Companies, has reviewed the contents of this press release and has verified the data disclosed in this press release.
Forward Looking Information:
This press release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward-looking information contained (or referred to) in this press release includes, but may not be limited to, the Karchiga Project's expected life of mine, estimated net present value and rate of return, forecasts relating to capital costs and the future price of copper, the Company's expectations relating to the completion of a Definitive Feasibility Study for the Karchiga Project and the timing related thereto as well as the Company's potential extraction of copper at the Karchiga Project.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, risks normally incidental to exploration and development of mineral properties, uncertainties in the interpretation of results from drilling and metallurgical test work, uncertainties relating to the estimates and assumptions used, and risks in the methodologies employed, in the Karchiga Scoping Study Report and that the completion of additional work on the Karchiga Project could result in changes to the estimates contained in the Karchiga Scoping Study Report, uncertainty of capital and operating costs, production and economic returns, the possibility that future exploration, development or mining results will not be consistent with expectations, uncertainty of mineral resources estimates, delays in the completion of the Definitive Feasibility Study for the Karchiga Project, adverse changes in commodity prices, the Company's inability to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities, and other risks relating to the regulatory and/or legal framework in Kazakhstan as well as certain other risks set out in the Company's public documents, including its annual information form dated March 22, 2011, filed under the Company's profile on SEDAR at www.sedar.com.
The forward-looking information in this press release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this press release, the Company has made certain assumptions about the Company's business, the economy and the mineral exploration industry in general, the parameters and assumptions employed in the Karchiga Scoping Study Report, including future capital costs and cost parameters, cash flow discounts, anticipated mining and processing rates, the regulatory framework in Kazakhstan with respect to, among other things, the Company's ability to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities, the Company's ability to continue to obtain qualified staff and equipment in a timely and cost-efficient manner to meet the Company's demand, and has also assumed that no unusual geological or technical problems occur, plant and equipment work as anticipated and no significant events occur outside of the Company's normal course of business. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.
The mineral resource figures referred to in the Karchiga Report and the Karchiga Scoping Study Report are estimates only and no assurances can be given that the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the mineral resource estimates referenced in the Karchiga Report and the Karchiga Scoping Study Report are well established, by their nature, mineral resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such mineral resource estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.