LONDON, UNITED KINGDOM -- (Marketwired) -- 04/22/13 -- Extension of exclusive right to explore the East Balkhash 2 licence area in Kazakhstan
Orsu Metals Corporation ("Orsu" or the "Company"), the dual listed (TSX: OSU)(AIM: OSU) London-based base and precious metals exploration and development company today announces that it has entered into a new exclusivity agreement (the "Agreement") to jointly explore the East Balkhash 2 licence area in Kazakhstan ("Balkhash Project") with Asem Tas-N LLC ("Asem Tas"), a privately owned Kazakh registered company and owner of the subsoil use contract for the Balkhash Project. The Agreement replaces the initial agreement announced on November 12, 2012.
Summary of the Agreement
A summary of the key terms of the Agreement with Asem Tas to jointly explore the Balkhash Project is set out below:
1. Orsu is granted the exclusive right for a period of 175 days, ending in September 2013, subject to extension by mutual agreement of the parties (the "Exclusivity Period"), to explore and participate in the Balkhash Project.2. During the Exclusivity Period: a. Orsu and Asem Tas will continue to jointly explore the Balkhash Project, including geophysical works and verification drilling of exploration targets, b. Orsu will provide funding for exploration works at the Balkhash Project in the amount of approximately $0.9 million (including $0.13 million already spent in 2013 pursuant to the predecessor agreement announced on November 12, 2012) in accordance with a contractual working programme agreed by both parties ("Working Programme"), and c. Asem Tas will apply to transfer the exploration licence for the Balkhash Project to a newly formed Kazakh legal entity jointly owned by Orsu and Asem Tas (the "Joint Venture Company"), which will be a subsidiary of Orsu, with Orsu holding an effective interest of 55%. A transfer of the exploration licence to the Joint Venture Company will be conditional upon obtaining a formal waiver of the Kazakh Government's pre-emptive right.3. On effective transfer of the exploration licence, Orsu has agreed to pay Asem Tas: a. up to $1.5 million to compensate Asem Tas for historical exploration costs incurred prior to 2012 (excluding any costs funded by Orsu) on effective transfer of the exploration licence, b. $20 per tonne of economically extractable copper equivalent, up to a maximum of $10 million, less any amount paid under a. above, on or before completion of a positive preliminary economic assessment study, and c. $20 per additional tonne of economically extractable copper equivalent, up to a maximum of $15 million, less any amounts paid under a. and b. above, on completion of a positive definitive feasibility study.4. Orsu may terminate its funding at any point before the earlier of the effective transfer of the exploration licence or the end of the Exclusivity Period. Where the approval of the relevant authorities for the transfer of the licence is not received due to a breach by Asem Tas, or the Kazakh Government exercises its pre-emptive right to acquire the licence during the transfer process, Asem Tas is required to refund Orsu for its expenditure in connection with the Working Programme.5. Orsu will finance the works until completion of the definitive feasibility study and Orsu will be responsible for debt financing of the project.6. Under the terms of the Agreement, Orsu will have the right to buy-out all or part of the interest of Asem Tas in the Joint Venture Company, for cash or shares, at a price determined by an independent expert.