TIDMOSU
Orsu Announces Completion of Preliminary Assessment Study for Karchiga Project, Base Case Study NPV of US$138M and IRR of 40.5% Over 10 Year Life of Mine
FOR: ORSU METALS CORPORATION
TSX, AIM SYMBOL: OSU
May 25, 2010
Orsu Announces Completion of Preliminary Assessment Study for Karchiga Project, Base Case Study NPV of US$138M
and IRR of 40.5% Over 10 Year Life of Mine
LONDON, UNITED KINGDOM--(Marketwire - May 25, 2010) - Orsu Metals Corporation ("Orsu" or the "Company")
(TSX:OSU)(AIM:OSU), the London-based precious and base metals exploration and development company, announces
the results of a preliminary assessment study for its Karchiga volcanogenic massive sulphide copper project
(the "Karchiga Project") in northeast Kazakhstan.
Micon International Co Limited ("Micon") was contracted by Orsu to prepare a preliminary assessment or scoping
study for the Karchiga Project (the "Karchiga Scoping Study"). The Karchiga Scoping Study is based upon the
previously announced Indicated and Inferred mineral resource estimates (March 22, 2010) prepared by Wardell
Armstrong International Ltd. ("WAI").
The Karchiga Scoping Study including pit optimization, contemplates mining a total of 7,580,389 tonnes ("t")
grading 1.94% copper, containing 146,778t of copper metal. 86% of the tonnage totaling 6,487,556t with a grade
of 1.97% copper is derived from Indicated mineral resources, and 14% of the tonnage totaling 1,092,833t with a
grade of 1.71% copper is derived from Inferred mineral resources. At a nominal mining and processing rate of
750,000 tpa of mineralised feed the project life exceeds ten years. For the purposes of the Karchiga Scoping
Study, all oxide material was considered to be waste and assigned no economic value.
The Karchiga Scoping Study base case economic analysis indicates a discounted cash flow Net Present Value
("NPV") of US$138.53 million and an Internal Rate of Return ("IRR") of 40.5% (refer to tables 1 & 2 below)
based on a flat copper price of US$3.00/lb. The NPV and IRR figures have been calculated pre-tax and pre-
finance cost Life Of Mine ("LOM"), assuming an initial capital cost of US$100.16 million and a discount rate of
10% per annum.
/T/
Table 1: NPV(10) and IRR Sensitivity against Cu Price, MICON May 2010
=--------------------------------------------------------------------------
Cu Price
=--------------------------------------------------------------------------
Cu ($/lb) NPV(10)(US$ million) IRR (%)
=--------------------------------------------------------------------------
2.40 59.2 24.2
=--------------------------------------------------------------------------
2.60 85.6 29.9
=--------------------------------------------------------------------------
2.80 112.1 35.3
=--------------------------------------------------------------------------
3.00 (Base Case) 138.5 40.5
=--------------------------------------------------------------------------
3.20 165.0 45.5
=--------------------------------------------------------------------------
3.40 191.4 50.4
=--------------------------------------------------------------------------
3.60 217.9 55.1
=--------------------------------------------------------------------------
Table 2: NPV(10) and IRR Sensitivity against Capex, Opex and Revenue, MICON
May 2010
=---------------------------------------------------------------------------
Variable Capex Opex Revenue
=---------------------------------------------------------------------------
Variance from Base NPV(10) NPV(10) NPV(10)
Case (%) (US$ M) IRR (%) (US$ M) IRR (%) (US$ M) IRR (%)
=---------------------------------------------------------------------------
70% 164.7 58.8 191.4 51.6 21.3 15.4
=---------------------------------------------------------------------------
80% 156.0 51.4 173.8 47.9 60.4 24.4
=---------------------------------------------------------------------------
90% 147.2 45.4 156.2 44.2 99.5 32.7
=---------------------------------------------------------------------------
100% 138.5 40.5 138.5 40.5 138.5 40.5
=---------------------------------------------------------------------------
110% 129.8 36.4 120.9 36.8 177.6 47.9
=---------------------------------------------------------------------------
120% 121.1 32.9 103.3 33.0 216.7 55.0
=---------------------------------------------------------------------------
130% 112.4 29.9 85.7 29.2 255.8 61.8
=---------------------------------------------------------------------------
/T/
(i)Micon notes that the preliminary assessment is preliminary in nature and includes Inferred Mineral Resources
that are considered too speculative to have the economic considerations applied to them to enable them to be
categorised as Ore Reserves under the guidelines of the Australian Joint Ore Reserve Committee, as amended in
2004 (JORC Code) or Mineral Reserves under the guidelines of the Canadian Institute of Mining, Metallurgy and
Petroleum. As such, there is no certainty that the preliminary assessment will be realised. Mineral resources
that are not Ore/Mineral Reserves do not have a demonstrated economic viability.
(i)NPV(10) refers to an NPV calculated at a discount factor of 10%.
A conventional processing route was chosen using relatively fine grinding and selective sulphide flotation to
produce the final marketable concentrate product. The preliminary assessment forecasts a LOM average recovery
of over 90%, resulting in a marketable concentrate with an average grade of 22% Cu containing 132,637t of
copper. Further optimisation studies will be required as part of a definitive feasibility study.
Tables 3 and 4 show key cost parameters and LOM financial highlights for Karchiga operation at base case
US$3.00/lb Cu.
/T/
Table 3: LOM Operating Cost Summary
----------------------------------------------------------
Area Unit Cost(US$/t ore)
----------------------------------------------------------
Mining 17.04
Processing 10.10
General and Administration 3.56
Total Cash Production Cost 30.70
Concentrate Transport 5.01
Mineral Extraction Tax 7.04
Property Tax 0.99
Total Operating Cost 43.75
Total Operating Cost (US$/lb Cu) 1.13
----------------------------------------------------------
Table 4: Base Case LOM Financial Highlights
------------------------------------------------------------------------
Criteria Unit Value
------------------------------------------------------------------------
Net Revenue US$ million 765.42
Net Smelter Return % 87.3
Production Cost US$/t of ore 30.70
Operating Cost US$/t of ore 43.75
Operating Cost US$/lb of Cu 1.13
Initial Capital Cost US$ million 100.16
LOM Capital Cost US$ million 102.63
Net Cash Flow US$ million 340.34
NPV(10) US$ million 138.53
IRR % 40.5
Initial Capital Payback years 1.98
------------------------------------------------------------------------
/T/
Orsu's Executive Chairman, Dr Sergey V Kurzin, commented: "The results of the study have confirmed Company's
positive expectations for the project. Karchiga now demonstrates robustness and excellent economic potential
and reinforces our decision to fast track the project to full feasibility study stage. Orsu is actively
negotiating with a number of potential consulting groups to undertake a full feasibility study with a target
start date of June this year. Orsu will commence field work shortly in order to complete all required works
onsite to satisfy feasibility requirements, and we look forward to bringing this project to fruition."
The Karchiga Scoping Study is based on 100% of the Karchiga deposit. On May 20, 2010 Orsu announced that it has
agreed to acquire a further 24.73% of Karchiga, which would increase its total ownership to 94.75% from 70.02%,
subject to receipt of necessary approvals.
Micon's complete technical report, which was prepared in accordance with the requirements of Canadian National
Instrument 43-101, entitled "Preliminary Assessment of The Karchiga Copper Project, East Kazakhstan Region,
Kazakhstan", dated May 25, 2010 and 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, will be available under the Company's profile
on SEDAR (www.sedar.com).
WAI Indicated and Inferred mineral resource estimates (March 22, 2010) are contained in WAI's technical report
entitled "Updated Report on the Karchiga Property held by Orsu Metals Corporation, Kazakhstan", dated March 22,
2010 and prepared by M L Owen and L S Carroll, a copy of which has been filed under the Company's profile on
SEDAR (www.sedar.com).
Notes to Editors:
/T/
1. Mr Matthew Boyes, BSc, Mineral Resources Manager 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.
2. Mr David Thomas Wells, MIMM CEng, Senior Metallurgist, Mr Jonathan
Steedman, MAusIMM Bsc, Economic Geologist and Mr Geraint William Harris,
BEng MAusIMM , Senior Mining Engineer, all currently employed by: Micon
International Co Limited, Suite 10, Keswick Hall, Norwich, NR4 6TJ,
United Kingdom, and qualified person's as such term is defined in
National Instrument 43-101 and for the purposes of the AIM Guidance Note
for Mining, Oil & Gas Companies, have reviewed and approved the contents
of this press release. Mr Wells, Mr Steedman and Mr Harris are the
qualified person's responsible for the Karchiga Preliminary Assessment
Study.
3. Mr Mark L Owen, BSc, MSc (MCSM), CGeol, FGS, EurGeol, Technical Director
with WAI, and Ms Liv S Carroll, ARSM, BSc, MSc, DIC, MIMMM, CGeol, FGS,
a former employee of WAI, both qualified persons as such term is defined
in National Instrument 43-101, have reviewed the contents of this press
release and are the persons responsible for WAI's technical report
entitled "Updated Report on the Karchiga Property held by Orsu Metals
Corporation, Kazakhstan", dated March 22, 2010.
/T/
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 average recoveries and grades, the completion of further optimization studies,
anticipated costs relating to production, operations and capital, estimates relating to the future price of
copper, future revenues, cash flows, net smelter royalties, and capital payback, mineral resource estimates,
management's expectations relating to the economic potential of the Karchiga Project, and the proposed
commencement of field work to satisfy feasibility requirements and the completion of a full feasibility study
relating to the Karchiga Project and the timing of same.
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 drill results, the possibility that future
exploration, development or mining results will not be consistent with expectations, uncertainty of mineral
resources estimates, the failure by the Company to complete its proposed acquisition (the "Proposed
Acquisition") of the remaining share capital of Eildon Enterprises Limited, the indirect holder of a 94.75%
interest in the contract with the relevant Kazakh authorities governing the Karchiga Project (the "Karchiga
Project Contract"), the Company's inability to obtain, maintain, renew and/or extend required licences,
permits, authorizations and/or approvals from the appropriate regulatory authorities, including (without
limitation) the Company's inability to execute and register an amended Karchiga Project Contract providing for
an extension of the exploration period and return date for the Karchiga Project (the "Amended Karchiga Project
Contract") or obtain the relevant governmental authority's waiver of its pre-emptive right relating to the
Karchiga Project 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 24, 2010, 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, future capital costs and cost
parameters, cash flow discounts, anticipated mining and processing rates, the treatment of oxide materials as
waste, 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, including the receipt of a waiver of the relevant governmental authority's
pre-emptive right relating to the Karchiga Project, the execution and registration of the Amended Karchiga
Project Contract, the completion of the Proposed Acquisition, 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 this press release and the Karchiga Scoping Study 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 contained and referenced herein 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.
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.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Orsu Metals Corporation
Alexander Yakubchuk
COO
+44 (0) 20 7518 3999
www.orsumetals.com
OR
Canaccord Genuity Limited
Ryan Gaffney / Ryan Cohen
+44 (0) 20 7050 6500
OR
Vanguard Shareholder Solutions
Keith Schaefer
+1 604 608 0824
Orsu Metals Corporation
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