Orsu Metals has sold its 40% share in the Talas gold-copper-molybdenum project to a Gold Fields subsidiary for US$10 million. The proceeds will enable Orsu to fund its equity portion of project capital expenditure in the Karchiga project in Kazakhstan. The sale means Gold Fields now owns 100% of Talas and remains the project operator.
Orsu says the sell-off means it can focus on bringing its flagship Karchiga volcanogenic massive sulphide copper project in northeast Kazakhstan into production sooner. On completion of the sale, the base and precious metals explorer will also be refunded its aggregate contributions of US$240,000 to the current exploration program at Talas.
Orsu’s executive chairman Dr Sergey Kurzin says, “I firmly believe the sale of the Talas project and subscription is in the best interest of the company and its shareholders in order to unlock Orsu’s full potential value by becoming a copper producer, while protecting existing shareholders from significant dilution in the current difficult economic circumstances.
“The proceeds of the sale will be used to fund Orsu’s equity portion of the capital expenditure necessary to start construction of the mine and processing facilities at the Karchiga project during the second half of 2012 and advance Orsu towards its goal of becoming a copper producer in the strategically important region of northeast Kazakhstan.”
In addition, the company is in advanced negotiations with major banks to provide estimated US$115 million project finance for Karchiga, principally in the form of secured debt. Orsu has also extended its agreement with financial advisors Endeavour Financial in relation to the procurement of project finance for Karchiga. The terms of the extension include a monthly $10,000 retainer and a milestone payment of $100,000 once a mandate has been signed with a financier.