A key milestone in the development of Orsu was the filing in March 2012 of the NI 43-101 compliant Karchiga DFS Report (defined below) which reported a total probable mineral reserve estimate of 10 million tonnes of sulphide and oxide ore containing a total of 166.6Kt copper at an overall average grade of 1.67% copper, of which 145.2Kt is amenable to flotation and 21.4Kt is amenable to heap leaching. The key economic indicators of the Karchiga Project show an initial capital expenditure requirement of $115 million, with a post tax net present value ("NPV") of $150 million, an internal rate of return ("IRR") of 30%, payback of less than 3 years and a mine life of 11.5 years, based on 100% equity financing and a copper price of $3.25/lb. The filing of the Karchiga DFS Report validated the technical and economic viability of the Karchiga Project from which the Company initiated a number of key steps towards securing finance for the construction of mine and processing facilities at the Karchiga Project. The first of these was the appointment of Barclays and UniCredit (both defined below) in July 2012 (collectively referred to as the "Mandated Lead Arrangers"), to use commercially reasonable efforts to secure a project debt finance facility of up to $90 million, subject to commercially acceptable terms for the facility being agreed with Orsu and the Mandated Lead Arrangers obtaining all of their necessary internal approvals. In relation to the planning for the construction of the mine and processing facilities at the Karchiga Project, in August 2012 the Company received the Approval from the MINT (defined below) for the Karchiga Technical Project (defined below) which along with receipt of the remaining local regulatory approvals, estimated to be received during the second quarter of 2013, will permit the Company to commence construction of mine and processing facilities at the Karchiga Project.
In July 2012 the Company completed the Sale to Gold Fields (defined below) of its 40% interest in the Talas Project its principal exploration asset in Kyrgyzstan for a cash consideration of $10 million. In addition as a separate agreement, Gold Fields agreed to the Subscription (defined below) of 25 million Common Shares and 12.5 million Warrants for total gross proceeds of CAD$10 million to be received by the Company which is currently held in escrow until such time as the Company is able to complete the Kazakh Formal Waiver (defined below).
In relation to the Company's other exploration interests in Kyrgyzstan, the Akdjol-Tokhtazan Project, following the Company's decision in the fourth quarter of 2011 that the Akdjol-Tokhtazan Project would no longer be a core asset and as such was made available for sale, during 2012 the Akdjol-Tokhtazan Project continued to be made available for sale and in November 2012 the Company announced that it had entered into the Akdjol-Tokhtazan Exclusivity Agreement with David-Invest (defined below) for the potential acquisition of the Akdjol-Tokhtazan Project for a consideration of $4.5 million. Under the terms of the Akdjol-Tokhtazan Exclusivity Agreement David-Invest agreed to fund exploration work during an Exclusivity Period up to September 1, 2013 in return for which David-Invest was granted the exclusive right to acquire the Akdjol-Tokhtazan Project for $4.5 million. As a requirement of the Akdjol-Tokhtazan Exclusivity Agreement in December 2012 the Company successfully extended the exploration licenses for the Akdjol-Tokhtazan Project for a further three years to December 31, 2015. In the event of any sale of the Akdjol-Tokhtazan Project the Company will have divested its remaining exploration interests in Kyrgyzstan.
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