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.
Technical information about the East Balkhash 2 licence area was provided in the announcement of November 12, 2012.
Appointment of new technical director
The Company is pleased to announce that Mr Chris Power, previously the Project Manager for the Company's Karchiga Project, has been appointed as Technical Director with immediate effect. Mr Power replaces Mr Raymond Oates who has resigned from the position of Technical Director for personal reasons. Chris will continue to be based at the Company's offices in Ust-Kamenogorsk, Kazakhstan.
Chris Power has over 30 years' extensive mining and engineering experience, starting his career with 10 years at Anglo American in South Africa, rising from graduate intake to section manager and then working for various mining companies worldwide. Chris joined Orsu in April 2011 as Project Manager for Karchiga. He previously worked in Kazakhstan with a number of Orsu's senior management team between 2005 and 2008 as Project Manager for the construction of Oriel Resources' underground chrome mine and processing plant at Voskhod. In the interim, between 2009 and 2011, he led the construction of a mine and processing facility for Tiger Resources, and as General Manager at the Dikulushi and Kinsevere mines of Anvil Mining (since acquired by Minmetal), both operating in the DRC.
Before 2005, Chris worked on numerous projects, being in charge of both construction, operation and de-commissioning worldwide in some of the world's premier mining districts of Australia, the Philippines, Turkey, South Africa, Saudi Arabia, Sweden and Angola. Chris is a Mining Engineer with an MSc degree from the Royal School of Mines.
Notes to Editors:
1. All $ figures are United States Dollars unless otherwise indicated.
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 in this press release includes, but may not be limited to, the expected exploration activities by the Company related to, and the general development of, the Balkhash Project, and the anticipated funding of exploration and other costs by Orsu.
Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, uncertainties in the interpretation of drill and test results, risks normally incidental to exploration and development of mineral properties, the possibility that future exploration, development and/or mining results will not be consistent with expectations, the Company's inability to raise additional finance as and when needed, the Company's inability to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities (including an inability to obtain the waiver of the Kazakhstan Government's pre-emptive right in connection with the Balkhash Project licence transfer application) and other risks relating to the regulatory framework in Kazakhstan and adverse changes in the political environment and laws in Kazakhstan.
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 assumptions about: the Company's business, the economy and the mineral resources development and extraction industry in general; the Company's ability to raise required additional financing; the ability to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities (including in connection with the Balkhash Project licence transfer application); and the ability to continue to obtain qualified staff and equipment in a timely and cost-efficient manner to meet demands. The Company has also assumed that 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.
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.
Orsu Metals Corporation
Dr. Alexander Yakubchuk
Chief Operating Officer
+44 (0) 20 7518 3999
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