Orsu Metals Corporation ("Orsu" or the "Company") (TSX:OSU)(AIM:OSU), the
London-based precious and base metals exploration company, is pleased to
announce updated pit-constrained mineral resource estimates for its Karchiga
Volcanogenic Massive Sulphide ("VMS") copper deposit, northeast Kazakhstan (the
"Karchiga Project"). The mineral resource estimates have been reported according
to the Canadian Institute of Mining, Metallurgy and Petroleum Standards on
Mineral Resources and Reserves (the "CIM Standards") and form part of the
ongoing Definitive Feasibility Study ("DFS").
The updated mineral resource estimates (the "SRK 2011 Mineral Resource
Estimates") have been prepared by the Company's lead DFS consultant SRK
Consulting (UK) Limited ("SRK"), and relate only to the sulphide mineralisation
in both the Central and North East lodes of the Karchiga deposit. SRK has
constrained the reported Mineral Resources to material with reasonable prospects
for economic extraction into two optimised open pits and by applying a cut-off
grade of 0.3% copper. SRK's Indicated Mineral Resources are 7.1Mt of ore,
grading 1.85% copper and containing 131,860t of copper metal, and the Inferred
Mineral Resources are 1.2Mt of ore, grading 1.68% copper and containing 19,860t
of copper metal.
The oxide mineral resource estimates in the Central lode remain unchanged from
that which was previously reported by the Company (see technical report entitled
"Updated Report on the Karchiga Property held by Orsu Metals Corporation,
Kazakhstan" and dated March 22, 2010) ("WAI 2010 Estimate").
Mineralisation at Karchiga occurs in the Central and North East lodes. The VMS
style of the mineralisation in both lodes is hosted along the contacts between
the shallow dipping alternating amphibolite and quartz mica schist units. The
two lodes have a strike length in excess of 1km and have been intersected down
to depths of 200m below the surface. In the Central lode, the mineralisation is
located within a series of shallow-dipping massive and disseminated sulphide
bodies stacked at three stratigraphic levels and primarily consists of
chalcopyrite-pyrrhotite and pyrite mineralisation. In the North East lode, the
2010 drilling results revealed the mineralisation, also primarily consisting of
chalcopyrite-pyrrhotite and pyrite, to be located within two subparallel
shallow-dipping and moderately folded massive and disseminated sulphide lenses,
whereas it was previously thought that there was only one stratigraphic level of
mineralisation.
SRK 2011 Mineral Resource Estimates
SRK has interpreted and wireframed a series of narrow mineralised lenses with
varying dips in both the Central and North East lodes using a nominal 0.1%Cu
cut-off. SRK has also constrained the reported Mineral Resources into two
optimised open pits and by applying a cut-off grade of 0.3% copper. SRK's
Indicated Mineral Resource so derived is 7.1Mt of ore, grading 1.85% copper and
containing 131,860t of copper metal, and the Inferred Mineral Resource is 1.2Mt
of ore, grading 1.68% copper and containing 19,860t of copper metal. Table 1
shows breakdown of the Mineral Resources for each lode and resource category.
Table 1: Pit-Constrained SRK 2011 Mineral Resource Estimates: (Effective May
6, 2011)
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Indicated Mineral Resources
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Metal Grade Metal
Cut-off Tonnes Grade Metal Cu Cu Au Metal Au
Lode Type Cu (%) (Mt) Cu (%) (t) (Mlb) (g/t) Au (t) (koz)
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Central Sulphide 0.3 4.4 1.92 84,590 186.48 0.08 0.36 11.73
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North
East Sulphide 0.3 2.7 1.74 47,270 104.21 0.23 0.63 20.32
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Total Sulphide 0.3 7.1 1.85 131,860 290.69 0.14 1.00 32.05
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Inferred Mineral Resources
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Metal Grade Metal
Cut-off Tonnes Grade Metal Cu Cu Au Metal Au
Lode Type Cu (%) (Mt) Cu (%) (t) (Mlb) (g/t) Au (t) (koz)
----------------------------------------------------------------------------
North
East Sulphide 0.3 1.2 1.68 19,860 43.77 0.18 0.21 6.73
----------------------------------------------------------------------------
(i)Some figures may not sum exactly due to rounding.
The reported Mineral Resources are relatively insensitive to moderate changes in
the cut-off grade up to 0.5% copper cut-off. In addition, the deposit contains
gold which is recoverable, based on the metallurgical studies conducted as part
of the DFS and reported by the Company in its press release dated April 28,
2011.
Whilst SRK used the same digital surface topography model and weathered horizon
to distinguish the oxide from the sulphide as previously used in the WAI 2010
Estimate, the SRK 2011 Mineral Resource Estimates are also based on the recent
in-fill drilling completed by Orsu in 2010 and an updated drillhole database,
the integrity of which SRK has verified (see Orsu's press releases dated
December 7, 2010 and February 10, 2011). Assays for the 2010 in-fill drilling
programme have been completed for Cu, Zn, Pb, and Au in the laboratory of the
Eastern Institute for Base Metals, based in Ust-Kamenogorsk, Eastern Kazakhstan,
which is independent from Orsu and SRK. Standard, blank, and duplicate samples
were inserted after approximately every 20 ordinary core samples. The ordinary
half core samples have been taken from visually mineralised intervals and 5 m of
visually unmineralised material below and above the mineralized intervals. The
remaining half core samples are stored at the Orsu facility in Ust-Kamenogorsk,
Kazakhstan. The SRK 2011 Mineral Resource Estimate has been derived using all
data available at the end of April 2011 which SRK has reviewed and which SRK is
confident is sufficient in terms of both quantity and quality to support the SRK
2011 Mineral Resource Estimates.
SRK produced new solid models (wireframes) constrained at 0.1%Cu cut-off grade
and domaining for each individual mineralised zone and capped high copper grades
where it considered this to be appropriate based on a statistical analysis of
the available assay results.
A total of six domains have been modelled in the Central lode, three of which
contained a separately modelled high grade zone, and three domains have been
modelled in the North East lode. 3D wireframes were created from 2D sections
which were spaced at a 25m interval in each of the Central and North East lodes.
SRK and Orsu interpreted four post-mineral faults which run across the deposit
and SRK used these faults as terminations to the mineralised domains. No more
than 2m of waste has been included in the 2D sections used to produce the 3D
wireframes.
The grade interpolation was carried out on 2m downhole composited drillhole
samples selected within a hard boundary 0.1% Cu grade wireframe. Material types
and samples data were subsequently extracted and subset within these discrete
domains and grade interpolation was constrained to each individual domain
separately.
SRK used a block size of 25m (X) by 25m (Y) by 5m (Z). Cu, Zn, Pb and Au grades
were interpolated into the blocks using an Ordinary Kriging algorithm based upon
the results of geostatistical modelling completed for the relevant sulphide data
sets.
Specific gravity measurements were carried out for the different material types
collected from Karchiga diamond drill core and an in-situ bulk density value
assigned to the block model based on the relationship between grade and bulk
density below the weathered surface revealed by a regression analysis. Data from
the Company's 2008 and 2010 drilling has enabled density regression plots to be
established for the Central and North East lodes.
Table 2 shows the pit optimisation parameters that were used to define a pit
outline which was then used to constrain the Mineral Resource to material with
reasonable prospects for economic extraction. The slope angle parameters are the
result of the geotechnical study undertaken by SRK. The Mining, Processing, and
Operating Cost and the Net Smelter Return ("NSR") parameters have been taken
from the technical report entitled "Preliminary Assessment of The Karchiga
Copper Project, East Kazakhstan Region, Kazakhstan", dated May 25, 2010 and
prepared by Micon International Co. Limited ("Micon 2010 Study"). A long term
metal price of $2.95/lb Cu was assumed by SRK, in contrast to $3.00/lb Cu used
in the Micon 2010 Study. Currently, no mineral reserve has been estimated as
part of SRK's work, although a mineral reserve estimate is planned as part of
the DFS on the basis of the SRK 2011 Mineral Resource Estimates.
Table 2: Pit Optimisation Parameters
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Parameter Value
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Overall slope angle
Central Pit:
Hanging Wall 49 degrees
Footwall 49 degrees
North East Pit:
Hanging Wall 51 degrees
Footwall 47 degrees
Northern Wall 47 degrees
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Mining & Processing
Mining Recovery 95.0%
Mining Dilution 5.0%
Cu Processing Recovery 90.00%
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Costs
Mining Cost
Ore $1.80/t
Oxide $1.30/t
Waste $1.60/t
Processing Cost $9.00/t ore feed
General & Administrative Cost $5.00/t ore feed
Royalty 6% of ore feed
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Price
Cu Selling Price $6500/t product ($2.95/lb)
NSR 83% of product
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Comparison with Previous Pit-Constrained Estimates
Table 3 shows a comparison between the SRK 2011 Mineral Resource Estimates and
previously reported mineral resource estimates in the Micon 2010 Study, both
pit-constrained. The cut-off grade of 0.34% copper used in the mineral resource
estimates in the Micon 2010 Study was back-calculated based on the economic
parameters used in the Micon 2010 Study and shown in Table 2 above. It should be
noted that the SRK 2011 Mineral Resource Estimates are reported without dilution
and loss while the mineral resource estimates contained in the Micon 2010 Study
were reported allowing for 5% mining loss and 5% mining dilution.
Table 3: Comparison of Pit-Constrained Mineral Resource Estimates for the
Karchiga Project
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Indicated Mineral Resources
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Metal
Effective Cut-off Tonnes Grade Metal Cu Cu
Estimate Date Cu (%) Lode Type (Mt) Cu (%) (t) (Mlb)
----------------------------------------------------------------------------
Central
May 6, & North
SRK 2011 2011 0.34 East Sulphide 7.1 1.85 131,789 290.5
----------------------------------------------------------------------------
Central
May 25, & North
Micon 2010 2010 0.34 East Sulphide 6.5 1.97 127,804 281.7
----------------------------------------------------------------------------
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Inferred Mineral Resources
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Metal
Effective Cut-off Tonnes Grade Metal Cu Cu
Estimate Date Cu (%) Lode Type (Mt) Cu (%) (t) (Mlb)
----------------------------------------------------------------------------
May 6, North
SRK 2011 2011 0.34 East Sulphide 1.2 1.68 19,849 43.8
----------------------------------------------------------------------------
May 25, North
Micon 2010 2010 0.34 East Sulphide 1.1 1.71 18,810 41.5
----------------------------------------------------------------------------
(i) Some figures may not sum exactly due to rounding. Mineral resources that
are not minerals reserves have not demonstrated economic viability. The
figures for the Micon 2010 Study are extracted as quoted in the Orsu's press
release dated May 25, 2010.
The reported results are part of the ongoing DFS for the Karchiga Project the
completion of which is expected by October 2011.
Dr Alexander Yakubchuk, COO and Director of Exploration of Orsu, commented:
"While the SRK 2011 and the WAI/Micon 2010 Mineral Resource Estimates and Study
were prepared using two different methodologies, especially in respect of the
capping of the high grade assays, they have revealed comparable results which
demonstrates once again the robustness of the Karchiga Mineral Resource. We are
looking forward to completing a Mineral Reserve estimate for Karchiga as part of
the DFS. The Company is pleased that the new Karchiga Project pit-constrained
Mineral Resources have revealed an increase in both the resource tonnage and
contained copper metal. This is expected to increase the life of mine to 11
years and reduce the stripping ratio, both of which are to be confirmed during
the ongoing DFS."
GLOSSARY of technical terms:
Amphibolite - a metamorphic rock composed mainly of amphibole, formed by the
regional metamorphism of basic igneous rocks
Au - a chemical symbol for gold
Chalcopyrite - copper-bearing sulphide mineral (CuFeS2)
Cu - a chemical symbol for copper
Indicated Mineral Resource - that part of a Mineral Resource for which
quantity, grade or quality, densities, shape and physical characteristics,
can be estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to support
mine planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably assumed.
Inferred Mineral Resource - that part of a Mineral Resource for which
quantity and grade or quality can be estimated on the basis of geological
evidence and limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes.
Lode - a mineralised body
Massive sulphide - a large, usually stratiform, conformable orebody composed
mainly of iron sulphide, usually pyrite +/- pyrrhotite, and other base metal
sulphides, such as chalcopyrite, along interfaces between volcanic units and
sediments
Mineral Resource - a concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on the Earth's crust in such
form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a Mineral Resource are known, estimated or
interpreted from specific geological evidence and knowledge.
Ordinary Kriging - a geostatistical approach to the interpolation of assay
data where the weighting of data points is determined based on the spatial
correlation between the data in the particular deposit to which it is
applied
Oxide Mineral Resource - A Mineral Resource comprising mineralisation formed
by the chemical interaction of an element or elements with oxygen, usually
affected by surface waters
Pb - a chemical symbol for lead
Pyrite - the most common iron-bearing sulphide mineral (FeS2)
Pyrrhotite - a common ferromagnetic sulphide mineral
Quartz mica schist - metamorphosed sedimentary rock
Sulphide - a mineral composed of a chemical compound between a metal and
sulphur
Zn - a chemical symbol for zinc
Notes to Editors:
1. 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 and has verified the data disclosed in this press
release (including sampling, analytical and test data underlying the
information), other than with respect to SRK 2011 Mineral Resource
Estimates, the Micon 2010 Study and the WAI 2010 Estimates.
2. Dr Mike Armitage, CEng, CGeol, Group Chairman and Corporate Consultant
(Resource Geology) with SRK, Ms Tracey Laight, MSc, CGeol, FGS, Senior
Consultant (Mining Geology) with SRK, both qualified persons as such term
is defined in National Instrument 43-101 and independent of Orsu, have
reviewed the contents of this press release. Ms Tracey Laight is the
person responsible for the Mineral Resource estimates for Karchiga
Project referred to above.
3. The technical report related to the Micon 2010 Study referred to in this
press release 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, all of Wardell Armstrong International Limited, J
Steedman, MAusIMM and D Wells, MIMMM CEng of Micon International Co.
Limited is available under the Company's profile on SEDAR
(http://www.sedar.com/). Each of the foregoing persons is a "qualified
person" as such term is defined in National Instrument 43-101,
independent of Orsu and responsible for the Micon 2010 Study.
4. The indicated and inferred mineral resource estimates (March 22, 2010)
referred to in this press release are contained in the 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 of Wardell Armstrong International Limited, which is
available under the Company's profile on SEDAR (http://www.sedar.com/).
Each of the foregoing persons is a "qualified person" as such term is
defined in National Instrument 43-101, independent of Orsu and
responsible for the WAI 2010 Estimate.
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 statements
relating to: mineral resource estimates; the future price of copper; the
potential recoverability of gold at the Karchiga Project; anticipated costs
relating to mining, processing and operating; the expected completion of the DFS
and the timing related thereto; the anticipated completion of a mineral reserves
estimate for the Karchiga Project; the potential for an increase in the life of
mine and a reduction in the stripping ratios at the Karchiga Project.
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, uncertainty of mineral resources estimates, the
Company's inability to obtain, maintain, renew and/or extend required licences,
permits, authorizations and/or approvals from the appropriate regulatory
authorities and other risks relating to the regulatory framework in Kazakhstan,
adverse changes in the political environment in Kazakhstan and the laws
governing the Company, its subsidiaries and their respective business
activities, uncertainties in the assumptions used, and the methodologies
employed in, the SRK 2011 Mineral Resource Estimates and in the Micon 2010
Study, adverse changes in commodities prices, as well as certain other risks set
out in the Company's public documents, including its annual information form
dated March 22, 2011, 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; the parameters used in defining the pit optimization for the
Karchiga Project, as detailed above; the Company's ability to raise any required
additional financing, as needed; 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; the political environment in Kazakhstan;
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 or unexpected
developments 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. Inferred
mineral resources are estimated on limited information not sufficient to verify
geological and grade continuity or to allow technical and economic parameters to
be applied. The Micon 2010 Study, and the information contained herein derived
therefrom, are preliminary in nature and the Micon 2010 Study 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 conclusions of the Micon
2010 Study will be realized. Mineral resources are not mineral reserves and do
not have demonstrated economic viability. There is no certainty that mineral
resources can be upgraded to mineral reserves through 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.
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