Orsu Metals Corporation has entered into a new exclusivity agreement with David-Invest LLP, a Kyrgyz registered company, with a view to the potential sale of its Akdjol-Tokhtazan gold exploration licences through either the sale of its wholly-owned subsidiary, Tournon Finance, or Tournon’s wholly-owned subsidiary, Oriel In Kyrgyzstan LLC (OIK), the indirect and direct holders of the licences.
Orsu’s interest in the licences was classified as held for sale in 2011 following the Board’s decision to actively market the asset and focus on developing its Karchiga Copper Project, the company’s principal asset in northeast Kazakhstan. The previous exclusivity agreement with David-Invest expired on September 1.
The key terms of the new agreement are:
- David Invest has been granted a further exclusive right to purchase Tournon or OIK until December 31, 2013.
- In return for being granted exclusivity David-Invest will fund the exploration program for the licences (which are due to expire on December 31, 2015) on a non-refundable basis for the remainder of 2013; and
- David-Invest has the option to purchase the entire share capital of Tournon or OIK at any time on or before the expiry of the exclusivity period for a consideration of US$4.5 million.
There have been no other significant changes to the terms of the original exclusivity agreement signed in 2012. The carrying value of the licences as at June 30, 2013 was US$4.4 million, and the losses attributable to the licences for the year ended December 31, 2012 were US$1.7 million.
Orsu will apply any proceeds from a sale to working capital and identification of other early stage exploration opportunities consistent with the company's strategy.