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Deferred Consideration For 2010 of US$2.7
Million Earned From
Sale Of The Varvarinskoye Project to OJSC Polymetal
Orsu Metals Corporation (TSX:OSU, AIM:OSU), the London-based
precious and base metals exploration and development company, is pleased
to announce that it has earned deferred consideration for 2010 of US$2.7
million, pursuant to the sale and purchase agreement (the
"SPA") dated 13 June 2009 relating to the sale of the Varvarinskoye Gold-Copper Project in Kazakhstan (the
"Varvarinskoye Project") to Open
Joint Stock Company Polymetal ("Polymetal").
Upon the
closing of the sale of the Varvarinskoye
Project to Polymetal in November 2009, the
Company received US$8 million in cash plus a deferred consideration
entitlement of up to US$12 million in cash, contingent on and calculable
by reference to the future prices of both gold and copper and the future
cash flows of the Varvarinskoye Project. The
deferred consideration amount is calculated and, if earned, payable for
each calendar year commencing in 2010, in accordance with the formula and
related provisions set out in the SPA.
Pursuant to the
terms of the SPA, of the US$2.7 million in deferred consideration earned
by Orsu for 2010, the amount initially payable
to Orsu for 2010 is capped at US$1.5 million
and the balance of US$1.2 million will be rolled over and added to any
payment earned by Orsu for 2011, with interest
on such rolled over amount accruing at a rate of 2.8% per annum. Orsu has received the aforementioned initial US$1.5
million.
Despite the
deferred consideration earnings paid to Orsu
for 2010, there remains significant uncertainty in relation to Orsu's future receipt of any further deferred
consideration (up to a maximum remaining entitlement of US$9.3 million
(in addition to the outstanding US$1.2 million earned in 2010 which is
payable in January 2012)), as future gold and copper metal price levels
and the future cash flows of the Varvarinskoye
Project are factors beyond the control or influence of Orsu.
Full Article
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 in this press release includes, but may not be limited to,
the amount and timing of further deferred consideration that may be paid
or payable to the Company by Polymetal in the
future pursuant to the SPA as well as Orsu's
receipt of amounts already earned for 2010, including the timing thereof
and the interest thereon, from Polymetal.
Factors that could cause actual results to differ materially from those
described in such forward-looking information include, but are not
limited to, adverse general market conditions, adverse changes in future
gold and copper metal prices, reductions in, or no, future cash flows of
the Varvarinskoye Project, risks normally
incidental to producing mineral properties and certain other risks.
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 relating to the Varvarinskoye
Project, including its continued production, and future gold and copper
metal prices. 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. 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.
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