Orsu Metals Corporation ("Orsu" or the "Company") (TSX:OSU)(AIM:OSU), the
London-based precious and base metals exploration company, is pleased to
announce an increased mineral resource estimate for its 94.75% owned Karchiga
Volcanogenic Massive Sulphide ("VMS") copper project, northeast Kazakhstan (the
"Karchiga Project"). The reported mineral resource estimate is constrained by an
optimised open pit, has been reported according to Canadian Institute of Mining,
Metallurgy and Petroleum Standards on Mineral Resources and Reserves (the "CIM
Standards") and forms part of the ongoing Definitive Feasibility Study ("DFS")
which is expected to be completed in January 2012.
The new pit-constrained mineral resource estimate (the "SRK December 2011
Mineral Resource Estimate") has been prepared by our lead DFS consultant SRK
Consulting (UK) Limited, Cardiff, UK ("SRK") and relates to oxide and sulphide
mineralisation in both the Central and North East lodes of the Karchiga deposit.
The new estimate reflects a 28% increase in the sulphide hosted Indicated
Mineral Resource tonnage, and a 23% increase in the copper metal contained
within this, compared to that reported by SRK in May of this year. This has been
achieved not only through the upgrading of practically all previously reported
Inferred Mineral Resources to the Indicated category, but also through the
addition of 0.8 Mt of sulphide mineralisation in the North East which had not
previously been delineated. The most significant difference, however, is the
increase in the oxide Mineral Resource. Specifically SRK has reported a 137%
increase in tonnage and a 109% increase in contained copper metal in comparison
with Mineral Resource Estimates for oxide mineralisation completed by Wardell
Armstrong International in March 2010 ("WAI 2010 Estimate"; see Company's
press-release dated March 22, 2010).
Mineralisation at Karchiga occurs in a Central and a North East lode. The VMS
style mineralisation in both lodes is hosted along the contacts between 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 surface.
In the Central lode, the mineralisation is located within a series of
shallow-dipping massive and disseminated sulphide bodies stacked at four
stratigraphic levels and primarily consists of chalcopyrite-pyrrhotite and
pyrite mineralisation. Above the sulphide mineralisation of the Central lode is
a zone of oxide mineralisation (containing malachite, chrysocolla and native
copper) which is separated from the sulphide mineralisation by a transition zone
of secondary sulphides (comprising chalcocite, covellite and native copper) (see
Company's press-release dated September 29, 2011).
In the North East lode, the mineralisation primarily consists of
chalcopyrite-pyrrhotite and pyrite, with minor sphalerite, and is located within
two subparallel shallow-dipping and moderately folded massive and disseminated
sulphide lenses.
SRK December 2011 Mineral Resource Estimate
Table 1 presents the SRK December 2011 Mineral Resource Estimate which comprises
an Indicated Mineral Resource of 10.8Mt of combined sulphide and oxide
mineralisation with a mean grade of 1.73% Cu for 187,200t of contained Cu and
Inferred Mineral Resources of 0.02Mt of sulphide mineralisation grading 1.28% Cu
for 300t of contained Cu. These Mineral Resources have been constrained by two
optimised pits and are reported at a cut-off grade of 0.3% copper for
mineralisation considered to be amenable to flotation ("FL") and at a cut-off
grade of 0.7% copper for mineralisation considered to be amenable to heap
leaching ("HL").
Table 1: SRK December 2011 Mineral Resource Estimate:
Indicated Mineral Resources
----------------------------------------------------------------------------
Grade Metal Metal Grade Metal Metal
Cut-off Tonnes Cu Cu Cu Au Au Au
Lode Type Cu (%) (Mt) (%) (Kt) (Mlb) (g/t) (t) (koz)
----------------------------------------------------------------------------
Central Oxide HL 0.7 1.5 1.24 18.2 40.0 0.06 0.08 2.70
----------------------------------------------------------------------------
Central Transition HL 0.7 0.1 3.39 3.3 7.3 0.06 0.01 0.20
----------------------------------------------------------------------------
Central Sulphide HL 0.7 0.2 1.72 3.3 7.3 0.14 0.03 0.85
----------------------------------------------------------------------------
Central Total HL 0.7 1.8 1.41 24.8 54.6 0.07 0.12 3.75
----------------------------------------------------------------------------
Central Oxide FL 0.3 0.3 1.15 3.2 7.0 0.11 0.03 1.00
----------------------------------------------------------------------------
Central Transition FL 0.3 0.1 3.19 3.3 7.3 0.06 0.01 0.20
----------------------------------------------------------------------------
Central Sulphide FL 0.3 3.8 1.87 70.3 154.9 0.13 0.51 16.30
----------------------------------------------------------------------------
North Sulphide FL
East 0.3 4.9 1.75 85.7 188.9 0.21 1.02 32.80
----------------------------------------------------------------------------
Total FL 0.3 9.1 1.80 162.5 358.1 0.17 1.57 50.30
----------------------------------------------------------------------------
Total All material 10.8 1.73 187.2 412.7 0.16 1.69 54.05
----------------------------------------------------------------------------
Inferred Mineral Resources
----------------------------------------------------------------------------
Grade Metal Metal Grade Metal Metal
Cut-off Tonnes Cu Cu Cu Au Au Au
Lode Type Cu (%) (Mt) (%) (Kt) (Mlb) (g/t) (t) (Koz)
----------------------------------------------------------------------------
North
East Sulphide 0.3 0.02 1.28 0.31 0.67 0.20 0.005 0.15
----------------------------------------------------------------------------
(i) Some figures may not sum exactly due to rounding.
As part of its work, SRK produced updated geological models for both the Central
and North East lodes primarily based on a geological cut-off of 0.1% Cu and
capped high grades where it considered this to be appropriate based on a
statistical analysis of the available assay results.
SRK also remodeled the footwall of the oxide mineralisation and in addition to
this has modeled a transition zone between the sulphide and oxide mineralisation
based on an updated drillhole database and acid solubility data. Notwithstanding
this, the resulting Mineral Resource Estimate has been reported using a 40% acid
solubility threshold which assumes that material which has an acid solubility
greater than 40% will be processed using heap leaching and that which has an
acid solubility of less than 40% will be processed in the flotation
concentrator.
A total of four domains have been modeled in the Central lode, and two in the
North East lode. 3D wireframes were created from 2D sections which were spaced
at a 25m interval in the Central and North East lodes. No more than 2m of waste
was included in the 2D sections used to produce the 3D wireframes. SRK and Orsu
previously interpreted four post-mineralisation faults which strike across the
deposit but only one of these is now thought to have an effect on the
mineralisation, offsetting it in the northern portion of the Central lode by
some 120m. Further, the more recent drilling information does not suggest that
the mineralisation is terminated by these faults as previously thought.
The grade interpolation was carried out on 2m downhole composited drillhole
samples from within the 0.1% Cu grade wireframe. SRK used a block size of 25m
(X) by 25m (Y) by 5m (Z). Cu, 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 and oxide 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 oxide mineralisation revealed by a regression analysis. Data
from the 2008, 2010 and 2011 drilling has enabled separate density regression
plots to be established for the sulphide mineralisation in 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 SRK December 2011 Estimates 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 NSR parameters have been derived
based on on-going technical work as part of the DFS by SRK. A long term price of
US$3.25/lb Cu was assumed based on market consensus forecasts, previously a
price of US$3.00/lb Cu had been used by SRK in May 2011 and Micon's May 2010
PEA. Currently the Company is working towards completing its DFS and thereby
reporting Mineral Reserves.
Table 2: Pit Optimization Parameters
----------------------------------------------------------------------------
Parameter Value
----------------------------------------------------------------------------
Overall slope angle
Central Pit:
Hanging Wall 49 degrees
Footwall 47 degrees
North East Pit:
Hanging Wall 51 degrees
Footwall 45 degrees
Northern Wall 47 degrees
----------------------------------------------------------------------------
Mining & Processing
Mining Recovery 95.0%
Mining Dilution 5.0%
Fresh Cu Processing Recovery 94.00%
Oxide Cu Processing Recovery 55.00%
----------------------------------------------------------------------------
Costs
Mining Cost
Ore $1.80/t
Oxide $1.30/t
Waste $1.60/t
Fresh Processing Cost $9.00/t ore
Oxide Processing Cost $22.57/t ore
General & Administrative Cost $5.00/t ore
Royalty 5.7% of RoM Metal Value
(above 0.7% Cu head grade)
----------------------------------------------------------------------------
Price
Cu Selling Price 7,200 USD/t Cu (3.25 USD/lb)
NSR 83%
----------------------------------------------------------------------------
Quality Assurance / Quality Control
The reported Mineral Resource estimates are based on historical drilling
performed in Soviet times as well as drilling undertaken by Orsu since 2007,
including in-fill drilling completed in 2011 (see Company's press-releases dated
September 1, 2011). Assays for the 2011 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 twenty 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 December 2011 Estimate used all data available at the end
October 2011.
Comparison with Previous Estimates
Table 3 shows a comparison between the SRK December 2011 Mineral Resource
Estimate and that previously completed by SRK in May 2011 for sulphide
mineralisation ("SRK May 2011 Mineral Resource Estimate") and by Wardell
Armstrong International for oxide mineralisation ("WAI 2010 Mineral Resource
Estimate").
Table 3: Comparison of Pit-Constrained Mineral Resource Estimates for
Karchiga Project
----------------------------------------------------------------------------
Indicated Mineral Resources
----------------------------------------------------------------------------
Metal Metal
Cut-off Tonnes Grade Cu Cu
Estimate Cu (%) Lode Type (Mt) Cu (%) (Kt) (Mlb)
----------------------------------------------------------------------------
Central &
SRK May 2011 0.3 North East Sulphide 7.1 1.85 131.86 290.69
----------------------------------------------------------------------------
SRK December Central &
2011 0.3 North East FL 9.1 1.80 162.5 358.1
----------------------------------------------------------------------------
Variance,
% 28.17 -2.70 23.24 23.24
----------------------------------------------------------------------------
WAI 2010 0.7 Central Oxide 0.76 1.57 11.89 29.9
----------------------------------------------------------------------------
SRK December
2011 0.7 Central HL 1.8 1.41 24.8 54.6
----------------------------------------------------------------------------
Variance, % 136.84 -10.19 108.58 108.58
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Inferred Mineral Resources
----------------------------------------------------------------------------
Metal
Cut-off Tonnes Grade Metal Cu
Estimate Cu (%) Lode Type (Mt) Cu (%) Cu (t) (Mlb)
----------------------------------------------------------------------------
SRK May 2011 0.3 North East Sulphide 1.2 1.68 19,849 43.8
----------------------------------------------------------------------------
SRK December
2011 0.3 North East Sulphide 0.02 1.28 300 0.7
----------------------------------------------------------------------------
Variance, % -98.33 -23.81 -98.45 -98.40
----------------------------------------------------------------------------
(i) Some figures may not sum exactly due to rounding. All heap leachable
("HL") and flotation ("FL") recoverable material is reported here with
oxide and sulphide resources, respectively, for comparison purposes.
The reported results are part of the ongoing DFS for the Karchiga Project, the
completion of which is expected in January 2011.
Dr Alexander Yakubchuk, COO and Director of Exploration of Orsu, commented: "We
are very pleased with both the successful conversion of the previously reported
inferred mineral resources to the indicated mineral resources and the additional
growth of our sulphide mineral resource. In addition, a greater than expected
growth of indicated mineral resources was achieved for both the tonnage of oxide
mineralisation and its contained copper metal of 137% and 109%, respectively.
We are looking forward to completing a Mineral Reserve estimates for Karchiga as
part of the DFS, with an expected life of mine in excess of eleven years."
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 - a 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
Pyrite - the most common iron-bearing sulphide mineral (FeS2)
Pyrrhotite - a common ferromagnetic sulphide mineral
Quartz mica schist - metamorphosed sedimentary rock
Sphalerite - a zinc-iron sulphide mineral ((Zn,Fe)S)
Sulphide - a mineral composed of a chemical compound between a metal and
sulphur
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 the pit-constrained mineral
resource estimates noted above.
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), both qualified persons as such term is
defined in National Instrument 43-101, 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 Scoping 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
(www.sedar.com).
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 (www.sedar.com).
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 Company's expectations with respect
to updating and upgrading current mineral resource estimates and the possible
increase in tonnage; the timing for the completion of an updated NI 43-101
compliant resource estimate; and the timing of the Company's receipt of results
from and timely completion of the ongoing Definitive Feasibility Study.
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 (including the possibility that gold may not be
able to be economically recoverable from the North East lode), 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, 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 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; 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 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. Inferred mineral resources are too speculative geologically to have
economic considerations applied to them to enable them to be categorized as
mineral reserves. 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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