ORSU Metals Corporation is dependent upon completing the sale of its Karchiga Copper Project in Kazakhstan before it can satisfy a share purchase agreement (SPA) to acquire the Sergeevskoe Gold Project in eastern Russia. With the Karchiga sale to Karasat Trading FZE not closing as expected on February 15, Orsu has negotiated an amendment to the SPA.

One of the closing conditions of the SPA was the requirement for Orsu to have US$3 million cash equivalents at closing of the SPA but the failure of the Karchiga sale to close meant Orsu was unable to meet this condition.

The Sergeevskoe licence is owned by Sibzoloto Investments, which is the sole owner of LLC GK Alexandrovskoe, holder of the Sergeevskoe licence, and LLC Investco Realty, owner of a work camp and infrastructure to support the project.

On closing the SPA Orsu was to purchase shares of Sibzoloto from the sellers by the issue of 146,605,683 new common shares in Orsu and payment of US$180,000 cash.

The sellers and Orsu have amended the SPA to modify the terms to compensate for not meeting the closing condition so that:

  • The payment of the US$180,000 at closing will be deferred until the earlier of Orsu being funded by equity or the Karchiga sale closing and that the interest rate for this deferred payment be 8% per annum from closing date;
  • The number of shares to be issued for the first 30% will be adjusted to 165,591,520 new common shares of Orsu from 146,605,683; and
  • The Karchiga Long-Stop Date in the SPA is changed from June 30, 2017 to September 30, 2017. If the sale of Karchiga closes before September 30, the sellers will assign the 70% balance of the shares of Sibzoloto to Orsu for the nominal par value consideration. In the event the sale does not close before September 30, Orsu will then own a participating interest in 30% of shares of Sibzoloto and the sellers will own 70%.

Orsu and the sellers will negotiate the terms of a shareholder’s agreement at that time to govern the operations of Sibzoloto and provide for an option for Orsu to acquire the remaining 70% of the shares of Sibzoloto.

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