UK base and precious metals explorer Orsu Metals has secured the financial backing of RK Mine Finance which will inject up to $25 million into its Karchiga copper project in eastern Kazakhstan.
The non-binding agreement includes a $15 million sub-ordinated loan and a sub-ordinated standby facility of up to $10 million, as well as an offtake agreement for 100% of any future annual production of copper concentrate at the project, for the life of the mine. RK Mine Finance is a company under the global Red Kite Group.
Orsu’s executive chairman Dr Sergey V Kurzin says, “Signing of the terms with RK Mine Finance is another significant step towards the company’s goal of starting construction at Karchiga. If completed, the RK Mine Finance debt offering, when added to the funds from the sale of Talas to Gold Fields and the potential proceeds from the $90 million senior debt facility, completes the pre-production finance package required to achieve this.”
The execution of a definitive debt finance facility and offtake agreement is subject to a number of conditions including completion of detailed due diligence by RK Mine Finance, finalization of definitive terms and the two companies obtaining all relevant internal approvals.
Orsu holds a 94.75% interest in the Karchiga copper deposit licence which is in the Kurchumskiy district, about 250km south-east of Ust-Kamenogorsk and 40km from the Chinese border. The company completed a NI 43-101 technical feasibility study in March this year, and has since been seeking to secure finance for the construction of a mine and processing facility at the site, with an aim to commence construction in April 2013.
RK Mine Finance provides mining companies with project financing and metal offtake agreements for initiation or expansion of mine production. The Red Kite Group operates across the global metals industry from offices in Bermuda, Denver, Hong Kong, London, New York, Shanghai and Sydney.