TIDMOSU
Orsu Announces Positive Results of a Scoping Study for the Tadybulak Gold-Copper-Molybdenum Porphyry Deposit in Kyrgyzstan
FOR: ORSU METALS CORPORATION
TSX, AIM SYMBOL: OSU
November 11, 2010
Orsu Announces Positive Results of a Scoping Study for the Tadybulak Gold-Copper-Molybdenum Porphyry Deposit in
Kyrgyzstan
- Average annual production of more than 240,000 oz gold, 26,000 t copper and 900 t molybdenum;
- US$516 million initial CAPEX;
- US$815 million pre-tax NPV 7.5;
- 24.7% pre-tax IRR (using US$1,150/oz Au, US$3.00/lb Cu, US$15/lb Mo);
- 17 years Life of Mine
- 6 Years Payback from start of construction
LONDON, UNITED KINGDOM--(Marketwire - Nov. 11, 2010) - Orsu Metals Corporation ("Orsu", or the "Company")
(TSX:OSU)(AIM:OSU), the London-based precious and base metals exploration and development company, is pleased to
announce the positive results of a scoping study for the Tadybulak Gold-Copper-Molybdenum Porphyry Deposit
("Taldybulak") at its Talas joint venture project in the Kyrgyz Republic (the "Taldybulak Scoping Study"). Gold Fields
Limited ("Gold Fields"), through its subsidiary Gold Fields Orogen Holding BVI Limited, has a 60% interest in the Talas
joint venture company (the indirect owner of the Taldybulak, Barkol, Kentash and Korgontash licenses in the Talas region
of the Kyrgyz Republic (the "Talas Project")), whilst Orsu retains a 40% interest in the Talas Project. Gold Fields is
the project manager.
The Taldybulak Scoping Study establishes key design criteria for an open pit mine scenario with a 15 million tonnes per
annum ("Mtpa") processing facility for average annual recovery of 242,000 oz gold and 137,600 dry metric tonnes ("dmt")
of copper concentrate and 1,880 dmt of molybdenum concentrate via conventional communition and floatation process flow
sheets at estimated initial capital expenditures of approximately US$516 million.
Taldybulak has been the primary focus of exploration and mineral resource development within the Talas Project licence
area. The Talas Project is located 250 km west of the Kyrgyz capital of Bishkek and is accessible all year via paved
road up to the last 20 km. The national electrical grid is close to the deposit and there is a 110kV sub-station 20km
from the site. There is a potential water source for future operations from ground water aquifers and from the Karakol
river. The average project elevation is approximately 2,000 m and the nearest village with a population of 3,500 people
is 7 km away. The larger town of Talas with 30,000 people is approximately 50 km to the west. The nearest railhead is at
Maimak on the Kazakhstan border, approximately 160 km away via paved road.
Coffey Mining Pty Ltd (Perth, Australia) ("Coffey Mining") completed the Taldybulak Scoping Study on behalf of the Talas
joint venture, which formed a basis for a pit-constrained mineral resource update for the deposit. This was done
according to the 2007 South African Code for the Reporting of Mineral Resources and Mineral Reserves (the "SAMREC Code
Resource"). The SAMREC Code Resource contains 127 Mt in the indicated category, which is comprised of 2.6 Moz gold at
0.64 g/t, 477 Mlb copper at 0.17%, and 29.4 Mlb molybdenum at 0.01%, and 296 Mt in the inferred category, which is
comprised of 3.71 Moz gold at 0.40 g/t, 1,098 Mlb copper at 0.17%, and 69.2 Mlb molybdenum at 0.01%. The mineral
resource was calculated using metal prices of US$1,150/oz Au, US$3.00/lb Cu, US$15/lb Mo ("Resource Price Case"), which
was reported in the Company's press release dated September 27, 2010.
Preliminary metallurgical test work (as reported by Orsu in its press-release dated July 21, 2010) indicated that the
recovery of gold, copper and molybdenum should be possible using a conventional communition and flotation process. Based
on metallurgical test work results, a conceptual process flow sheet has been developed consisting of crushing, grinding
and bulk flotation to produce a gold-copper-molybdenum concentrate. The concentrate would then undergo a further
flotation stage to produce both a copper-gold concentrate and a molybdenum concentrate. In this scenario some copper
must be present in order to recover any other elements, therefore any Standard Mining Unit ("SMU") containing some gold
but zero copper would not be profitable to treat. Due to the polymetallic nature of the Taldybulak ores, material that
is profitable to treat is not simply based on a single element cut-off grade. Figure 1 shows which material is
potentially economic at various copper and gold grades for a maximum cashflow scenario using the Resource Price Case,
i.e., US$1,150/oz gold, US$3.00/lb copper, and US$15/lb molybdenum metal prices. Due to the minor contribution from
molybdenum, an average molybdenum grade of 0.011% molybdenum is assumed. The copper grade that is economic to treat
excluding gold credits is approximately 0.16% Cu.
To view Figure 1. Taldybulak economic cutoff grades based on molybdenum grade of 0.011% and metal prices of US$1,150/oz
gold, US$3.00/lb copper and US$15.00 molybdenum, please visit the following link:
http://media3.marketwire.com/docs/osu_11_11_2010_fig_1.pdf
In addition to production of copper and molybdenum concentrates, gravity gold recovery is 15%, which warrants a gravity
separation circuit prior to bulk flotation for any coarse gold that may be present to produce Dore bars on site.
Evaluation of the potential to treat oxide material from the deposit is being investigated, however at this time no
value has been attributed to the oxides. Transition material has been incorporated into the mining schedule with reduced
recoveries based on testwork conducted in 2008.
Both indicated and inferred mineral resources have been used for mining and processing optimisation in the Taldybulak
Scoping Study; no mineral reserves have been estimated or reported for Taldybulak. An open pit mining scenario based on
20mEastx20mNorthx10m vertical SMU with a processing rate of 15 Mtpa of ore has been assumed.
Mining and processing parameters and long term commodity price assumptions ("Base Price Case") were used to select a
maximum discounted (7.5%) cash flow open pit shell. Key design criteria have been established for a 15 Mtpa processing
plant facility (Table 1). The key design criteria assumptions and proposed metallurgical performance are generally based
on the processing of sulphide ore, except where transition ore characteristics are known.
Table 1. Key Design Criteria Summary
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Parameter Unit Criteria
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Annual throughput Mtpa 15.0
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Crushing plant availability % 70
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hrs/day and
Crushing plant operation days/week 17 and 7
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Processing plant availability % 92
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hrs/day and
Processing plant operation days/week 24 and 7
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micro
P80 grind size metres 75
=--------------------------------------------------------------------------
g/t Au 0.60
Ore feed grade % Cu 0.20
% Mo 0.01
=--------------------------------------------------------------------------
% Au(i) 81.4
Metal recovery % Cu 88.0
% Mo 53.2
=--------------------------------------------------------------------------
Gravity gold recovery % Au 15
-----------------------------------
Annual concentrate production dmt Cu concentrate 137,600
dmt Mo concentrate 1,880
-----------------------------------
Annual gold production oz Au 242,000
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Table notes:
(i) Inclusive of gravity gold recovery.
This table represents design criteria for the process design work. Actual
figures for metallurgical recovery will depend on head grade.
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Analysis of the topography demonstrated that there is enough space to build tailings storage facilities ("TSF") in the
immediate vicinity of Taldybulak. However, a detailed TSF engineering study has not been undertaken. Work to better
define the TSF design is ongoing.
Although the actual pit-constrained mineral resource is 127Mt of ore in the indicated category and 296 Mt of ore in the
inferred category using US$1,150/oz, US$3.00/lb Cu and US$15/lb Mo, the Taldybulak Scoping Study is based on a re-
modelling of the open pit using the Base Price Case of US$1,000/oz Au, US$2.49/lb Cu, and US$15/lb Mo. The total
combined resource used for the Taldybulak Scoping Study was 254 Mt of ore (indicated and inferred) using the Base Price
Case.
Table 2 shows a price sensitivity analysis of four alternative metal price scenarios for open-pit mining at Taldybulak,
using 254 Mt of ore in both indicated and inferred resource categories, optimised to an open pit defined by the Base
Price Case. Consequently, the change in metal prices incorporated in the sensitivity to the cash flow does not fully
reflect the impact the change in metal prices would have on the project as the optimised pit shell and cut-off grade
were not adjusted. Preliminary indications are that the project economics would be enhanced with a larger pit and lower
cut-off grade; however, this was a high-level evaluation and plant throughput, tailings storage, capital cost and unit
operating costs were not optimised and updated to account for the increase in tonnage.
Table 2. Sensitivity Analysis Results
=--------------------------------------------------------------------------
3-Year
Average Resource Spot
Base Price Price Price Price
Parameter Unit Case Case(i) Case Case(i)
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Gold price US$/oz 1,000 976 1,150 1,319
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Copper price US$/lb 2.49 2.92 3.00 3.67
=--------------------------------------------------------------------------
Molybdenum price US$/lb 15.00 20.46 15.00 14.95
=--------------------------------------------------------------------------
Average annual
throughput Mtpa 15 15 15 15
=--------------------------------------------------------------------------
Waste : Ore Ratio 1.29 1.29 1.29 1.29
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Gold grade g/t Au 0.52 0.52 0.52 0.52
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Gold metal
recovered Moz Au 3.401 3.401 3.401 3.401
=--------------------------------------------------------------------------
Copper grade % 0.18 0.18 0.18 0.18
=--------------------------------------------------------------------------
Copper metal
recovered kt Cu 391 391 391 391
=--------------------------------------------------------------------------
Molybdenum grade % 0.011 0.011 0.011 0.011
=--------------------------------------------------------------------------
Molybdenum metal
recovered kt Mo 13.9 13.9 13.9 13.9
=--------------------------------------------------------------------------
Gold grade
equivalent g/t Au 0.95 1.05 0.94 0.95
=--------------------------------------------------------------------------
Average annual koz Au 242 242 242 242
production kt Cu 26.2 26.2 26.2 26.2
t Mo 900 900 900 900
koz Au
equivalent 353 389 356 361
=--------------------------------------------------------------------------
LOM recoverable Moz Au
ounces equivalent 6.01 6.62 6.05 6.14
=--------------------------------------------------------------------------
Average cash cost US$/oz Au
equivalent 445 404 443 436
=--------------------------------------------------------------------------
Total cash costs US$/oz Au
equivalent 621 571 624 622
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Initial Capex US$ M 516 516 516 516
=--------------------------------------------------------------------------
Ongoing Capex US$ M 275.2 275.2 275.2 275.2
=--------------------------------------------------------------------------
Years of production Years 17 17 17 17
=--------------------------------------------------------------------------
0% pre-tax NPV US$ M 1,257.7 1,647.8 2,125.8 3,181.1
=--------------------------------------------------------------------------
7.5% pre-tax NPV
(base case) US$ M 384.4 571.8 814.7 1,337.3
=--------------------------------------------------------------------------
Pre-tax IRR % 16.3 20.1 24.7 34.1
=--------------------------------------------------------------------------
Payback period
(from start of
2-year-long
construction) Years 9 8 6 5
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Table notes:
The cashflow model accounts for royalties, but does not account for taxes.
Some figures may not sum exactly due to rounding.
(i) 3 year average price and spot price from Bloomberg Data as of 1st
October 2010
Gold equivalent is calculated for each case separately using commodity
price weightings for gold, copper and molybdenum in this Table.
'koz Au equivalent' equals 'koz Au' + ('Copper price US$/lb' x 'ktCu' x
2,200+'Molybdenum price US$/lb' x 'tMo' x 2,200)/'Gold price US$/oz';
'Moz Au equivalent' equals 'Gold metal recovered Moz Au' + ('Copper price
US$/lb' x 'Copper metal recovered ktCu' x 2,200 + 'Molybdenum price
US$/lb' x 'Molybdenum metal recovered ktMo' x 2,200)/'Gold price
US$/oz'
=--------------------------------------------------------------------------
The Taldybulak Scoping Study is a preliminary estimate of the technical and economic viability of Taldybulak and does
not contemplate the full spectrum of engineering, economic and regulatory factors, which would be required prior to
making a production decision. Estimates provided in the Taldybulak Scoping Study are subject to change as additional
work is completed on the project.
The Taldybulak Scoping Study is preliminary in nature, and includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to them that would enable them to be categorized as
mineral reserves. There is no certainty that the Taldybulak Scoping Study will be realized. Mineral resources that are
not mineral reserves do not have demonstrated economic viability.
Dr Sergey V Kurzin, Executive Chairman of Orsu, commented: "We are very pleased with the positive results of the
Taldybulak Scoping Study, with some parameters, such as electricity and concentrate transportation costs, estimated
conservatively. Nevertheless, the IRR values are high for a porphyry-type deposit. The project has excellent
infrastructure and is located in relatively gentle terrain, amenable to open pit mining with low stripping ratio. The
Talas joint venture will continue to focus on the improvement of Taldybulak metal grades through the 5000 m closely-
spaced infill drilling programme which is planned to start after the winter season. The joint venture will also continue
the optimization of economic and processing parameters, particularly its oxide ores."
Notes to editor:
1. Further information on the Talas Project contained in the Updated
Technical Report on the Taldybulak Property Held by Orsu Metals
Corporation, Kyrgyzstan March 2010 was filed under the Company profile
on SEDAR (www.sedar.com).
2. Mr Rodney Smith, BSc, MAusIMM, Principal Consultant - Metallurgy with
Coffey Mining Pty Ltd (Perth, Australia) is the person responsible for
the preparation of the report titled "Talas Scoping Study, Talas
Taldybulak Project, Kyrgyzstan, 2010" based on which this press release
was prepared.
3. Alexander Yakubchuk, PhD, Director of Exploration and Chief Operating
Officer 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 prepared and reviewed the contents
of this press release. Dr Yakubchuk has verified the data disclosed in
this release, including sampling, analytical and test data underlying
the information.
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: estimated average
annual production of gold equivalent at Taldybulak; net present value, initial rate of return and expenditures relating
to Taldybulak; the anticipated timing of capital payback; estimated tonnage and contained gold equivalents at
Taldybulak; future activities and operations at Taldybulak; a potential water source at Taldybulak; future recoveries
and related processes at Taldybulak; the future production of a gold-copper-molybdenum concentrate and the methods
relating thereto; the future price of gold, copper and molybdenum; the economic potential and grades for gold and copper
at Taldybulak; the potential to treat oxide material at Taldybulak; mineral resource estimates; the Company's ability to
better define the TSF design; management's expectation that project economics will be enhanced at Taldybulak by using a
larger pit and lower cut-off grade; the estimates contained in Table 1 above; the potential for improvement of the metal
grades at Taldybulak; and the proposed continuation of optimization of economic and processing parameters at Taldybulak.
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 and test results, the possibility that future exploration, development
and/or mining results will not be consistent with expectations, uncertainty of mineral resources estimates, risks
relating to the methodologies employed in the Taldybulak Scoping Study and that the completion of additional work on
Taldybulak could result in changes to the estimates contained in the Taldybulak Scoping Study, 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) extensions of the Taldybulak and Barkol licences
after December 31, 2010, and other risks relating to the political, environmental, regulatory and/or legal framework in
Kyrgyzstan, adverse changes in commodity prices or the Talas joint venture, 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 assumptions about: the Company's business, the economy and the
mineral exploration industry in general; future capital expenditures and cost parameters, including the Resource Price
Case, Base Price Case, Spot Price Case and 3-Year Average price Case; tonnage and contained gold equivalents at
Taldybulak; the presence of copper at Taldybulak in order to recover other elements; future commodities' prices and that
no material adverse changes occur relating thereto; average copper and molybdenum grades; indicated and inferred mineral
resources at Taldybulak; anticipated mining methods and processing rates; cash flow discounts; the design criteria set
out in Table 1 above; the Company's ability to enhance project economics at Taldybulak by using a larger pit and lower
cut-off grade; the Company's ability to raise any required additional financing, as needed; the regulatory framework in
Kyrgyzstan 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 Company's
ability to obtain extensions of the Taldybulak and Barkol licences after December 31, 2010; the political environment in
Kyrgyzstan; and 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. The Company 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 contained and/or referred to in this press release 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Orsu Metals Corporation
Alexander Yakubchuk
Director of Exploration and COO
+44 (0) 20 7518 3999
+44 (0)20 7518 3998 (FAX)
info@orsumetals.com
www.orsumetals.com
OR
Canaccord Genuity Limited
Ryan Gaffney
+44 (0) 20 7050 6500
OR
Vanguard Shareholder Solutions
+ 1 604 608 0824
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