Orsu Metals Corporation is a dual-listed (TSX & AIM), London-based precious and base metals exploration and development company which is exploring advanced staged gold deposits in the Tien Shan gold belt in the Kyrgyz Republic, one of the largest and most prolific gold belts in the world, and the Rudny Altai copper belt in the Republic of Kazakhstan. Orsu was formed in June 2008 after the acquisition of Lero Gold Corp. by European Minerals Corporation.
Orsu is heade by Dr. Sergey Kurzin, who has an outstanding record of developing mines in the the former soviet republics. Sergey Kurzin Predicts Copper Will Outperform Gold By: MineralStox.com
(note: this article is from January 2011, but is relevant since it explains Dr. Kurzin's previous success)
In a recent interview with Jeff Clark of Casey Research, Dr. Sergey Kurzin, CEO of Orsu Metals (TSX :OSU) stated: "Gold, for the foreseeable future, is not going down because it is, in one word, fear. But I'm even more bullish about copper because it is essential." www.orsumetals.com
This is hardly radical thinking but it is of interest that Kurzin is placing his bets in this sector.
Kurzin is a Russian-born research engineer who moved to the United Kingdom in 1990. The legendary Central Asian mine builder has a track record of acquiring and developing assets and selling them into markets energised by peak spot metal prices.
Kurzin was an Executive Chairman of Oriel Resources - a chrome and nickel mining and processing company.
Kurzin also played a key role in establishing UrAsia Energy Ltd, a uranium producer with mining operations in The Republic of Kazakhstan.
With a track record like this, it's worth noting what Kurzin planning next.
The current focus of Orsu Metals is quite clear. The company is exploring advanced copper-gold deposits in the Tien Shan gold belt in the Kyrgyz Republic, and additional assets in the Rudny Altai copper belt in the Republic of Kazakhstan.
Why the bullishness on copper?
According to Kevin Norrish, managing director of Barclays' commodities research, "With living standards rising, you have to build cities and build the infrastructure that links them together. Certainly next year, inventories look very tight. And probably the year after that as well."
On Jan 6, 2011 copper is selling for $4.31 - close to its all-time peak of $4.49 - as traders digest the impact of the US Federal Reserve launching a fresh round of monetary stimulus.
Meanwhile copper "is firmer partially on the back of various forecasts highlighting next year's likely supply deficits", said William Adams, head of research at Basemetals.com.
Orsu is currently trading at 30 cents and has a market cap of about $47 million. Kazakhstan is the largest land-locked country in the world and as a mineral producer; it ranks second only to Russia among CIS countries.
Kurzin has been doing business there for 20 years. He knows the players and has mastered the arcane business protocols.
"Copper - especially in Kazakhstan where you are next door to China - has a strong future," says Kurzin, "and don't forget India is not far away. The overall trend in copper is definitely up in my opinion."
No man has a crystal ball, but Kurzin's gut sense about the future of copper is worth noting.
ORSU has several projects in Kazakhstan and Khyrgstan;
Orsu has a 40% interest in a gold mine that is in development in Khrgystan, that is operated by the much larger Gold Fields Limited. This mine project was closed in 2011 as a result of local unrest, and an attack on the facility, but re-opened in early January, 2012.
This is the Talas Project, which has the potential to also begin producing some gold, and thus cash flow, for ORSU, later in 2012 and beyond.
The following is the latest report on the Karchiga Project in Kazakhstan, which is in the final stages before actual mine development begins, sometime ion 2012. When that happens, the stock price should move up sharply.
ORSU METALS | Karchiga Definitive Feasibility Study Update September 29, 2011
Orsu Metals Corporation ("Orsu" or the "Company"), the London-based precious and base metals exploration and
development company, is pleased to announce that, as part of the ongoing Definitive Feasibility Study ("DFS"),
the Company has received all final assay results from its 2011 infill drilling programme in the Central lode
oxide and North East lode sulphide at its Karchiga volcanogenic massive sulphide copper deposit in northeast
Kazakhstan (the "Karchiga Deposit").
The Karchiga Deposit consists of the Central and North East lodes. The most recent National Instrument 43-101
("NI 43-101") compliant (pit-constrained) mineral resource estimates for the Karchiga Deposit (see Company's
press-release dated May 11, 2011) were focussed on the sulphide mineralization, which comprised 7.1Mt of
mineralization grading 1.85% Cu for 131,860t of contained Cu in the Indicated Mineral Resource category and
1.2Mt of mineralization grading 1.68% Cu for 19,860t of contained Cu in the Inferred Mineral Resource category
("SRK 2011 May Estimates"). The Inferred Mineral Resource is restricted to the North East lode. The SRK 2011
May Estimates excluded oxide mineral resources in the Central lode, which were previously reported by the
Company (see Company's press-release dated March 22, 2010).
The 2011 infill drilling programme (Fig.1) is expected to upgrade the Inferred Mineral Resources in the North
East lode sulphide into Indicated Mineral Resources, achieving at least 60 by 60 m drilling density with
inclusion of previous drilling, and to include the Central lode oxide into the ongoing DFS, achieving
approximately 30 by 30 m drilling density.
To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/osu0929fig1.pdf.
Central lode oxide
In the Company's 22 March 2010 announcement relating to the Karchiga Deposit, Orsu reported that the Central
lode oxide had a total indicated mineral resource estimate of 0.93 Mt (0.5% Cu cutoff) grading 1.39% Cu and
containing 12,868t of copper (see the Company's press release dated March 22, 2010). The works conducted prior
to the 2011 infill drilling programme identified a 1 to 2 m thick transition zone of secondary sulphides (with
chalcocite, covellite and native copper), located between the primary sulphide (chalcopyrite, pyrrhotite,
pyrite) and oxide (malachite, chrysocolla, native copper) mineralization (Fig. 2).
Due to its insignificant thickness, the transition zone was not modelled as a separate mineralized body in
previous mineral resource estimates for the Karchiga Deposit. Based on the distribution of the greater than 50%
acid soluble copper, the top part of the transition zone was included into oxide mineralization, whereas the
bottom portion was estimated as part of the sulphide mineralization. Additionally, the results of the most
recent metallurgical test work announced by the Company (see the Company's press-release dated April 28, 2011)
indicated that acid leaching of a blend of oxide and transitional secondary sulphide achieved 68% Cu recovery.
The Indicated Mineral Resource estimates of the Central lode oxide may justify a heap leaching operation during
the first 3 to 4 years of operation, which warrants inclusion of the oxide material into the ongoing DFS in
order to extract the potential economic value from the oxide mineralization.
To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/osu0929fig2.pdf.
The 2011 infill drilling in the Central lode oxide revealed better than expected continuity and much greater
thickness and grade of the transition zone than was previously estimated (Table 1 in Exhibit A). The transition
zone in the Central lode can be traced for 1000 m, varying in width from 30 to 50 m. The Company estimates the
average thickness to be between 3 to 5 m or greater. In addition, the assays show presence of consistent high
grade (4-5% Cu) mineralization in the transition zone, with several assays returning high grade values in the
range of 7.22% to 33% Cu per relevant intervals (Table 1 in Exhibit A).
North East lode
Assays on samples collected from the North East lode sulphide Infill drill core returned results, which can be
seen in Table 2 in Exhibit A. As anticipated by Orsu, the modeling of the North East lode will result in an
upgrade of mineralization from the Inferred to Indicated mineral resource categories, as well as will be used
for reserve pit optimization.
One thousand two hundred and one samples, including 103 standards, 64 duplicates, and 54 blanks, were prepared
from the intervals hosting massive and disseminated sulphide as well as secondary sulphide and oxide
mineralization in the two lodes, consisting of 694 oxide and 507 sulphide samples. All samples were submitted
and assayed in the VNIITsvetMet laboratory in Ust-Kamenogorsk, Kazakhstan. The laboratory is part of
VNIITsvetMet, a Kazakh Institute, which specialises in metallurgical studies for base metals and is independent
All sampling procedures and drill core logging were reviewed by competent persons from Orsu (under guidelines
set out in NI 43-101) ensuring samples are taken and results from the laboratory are checked in line with NI 43-
101 guidelines. A stringent QA/QC programme has been put in place to satisfy NI 43-101 and JORC requirements.
Core samples have been collected continuously from the visually identifiable intervals mineralized with massive
and/or disseminated sulphides and oxide material, including at least 5 m of host rock above and below such
intervals. Fifty four blank samples have been inserted every 17th sample, followed by standards. Copper oxide
and sulphide standards have been inserted, on average, every 18th and 19th sample within the sample number
sequence for the drill core. Assay duplicate samples were inserted approximately every 20th sample selected
from quarter core on a random basis from both mineralized and unmineralized intervals, and usually inserted
after the standards. All high grade assays have been reassayed as duplicates to ensure additional quality
control of assaying. In addition, gold standards were inserted every 50th sample.
COO and Director of Exploration of Orsu, Dr Alexander Yakubchuk commented:
"We are pleased to receive such excellent results from our 2011 infill drilling programme as part of the
ongoing DFS. Modeling of the new assay data received is currently underway and we expect to have updated and
upgraded NI 43-101 compliant mineral resource estimates completed by the end of October 2011. The new results
indicate the possibility of modeling the transition zone as a separate high grade body of mineralization within
the Central lode at Karchiga. Our metallurgical test work indicated that copper from the secondary sulphide
mineralization in the transition zone can be recovered both via acid leaching and a flotation processes. The
Company expects a decision on which part of the secondary sulphide should be included into potential heap leach
or flotation circuits to be made upon completion of the new mineral resource modeling and mineral reserve
optimization to be completed in November 2011 by the Company's lead DFS consultant SRK Consulting (UK) Limited.
In any scenario, the position of the high grade transition zone within 10m to 20m depth from the surface will
allow access to it during early stages of mining operation which could further improve the economics and
payback period of the Karchiga operation."
MARCH 2012 UPDATE:
POSITIVE DEFINITIVE FEASIBILITY STUDY!!
Orsu Metals (Orsu-TSX.V) Hits The Sweet Spot In Kazakhstan
The 43-101 definition of a Definitive Feasibility Study (DFS) states that it examines "all geological, engineering, operating, economic and other relevant factors in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production."
In other words, a DFS is a document written by geologists for bankers.
A DFS revealing a high capex or extreme sensitivity to lower metal prices can send investors running for the hills. A positive DFS is considered a significant "de-risker" - and will often catalyse a steady rise in share price.
Ivanhoe Mines' (IVN-TSX) share price doubled in the six months following the release of Feasibility Study on the Kyzyl Gold Project in northeastern Kazakhstan.
On February 28, 2012 - about 100 miles away from Kyzyl, Orsu Metals (OSU-TSX.V) announced the positive results of its DFS for the 94.75% owned Karchiga copper project in northeast Kazakhstan.
Using only the Indicated Mineral Resource Estimates, the DFS supports a Probable Mineral Reserve estimate of 367 million pounds of copper. The cost of building the mine
- US$21.5 million for mining equipment
- US$40.1 million for copper in concentrate processing plant and equipment
- US$26.3 million for SXEW plant
- US$21.7 million for mine site facilities and infrastructure
- US$26.3 million for sustaining capital & closure costs
- US$11.3 million for contingency
The open pit mining schedule produced by SRK calculated a producing mine life of 11.5 years. The mining schedule envisages the mining of 10 Mt of sulphide and oxide ore and 124 Mt of waste with a stripping ratio of 1:12.4 over the mine life. The average mining rate of the operation is 750kt per annum. The average mining cost over the mine life is $1.70 per tonne of material moved.
The open pit mining schedule calculates a producing mine life of 11.5 years. For the first 2.25 years of the mine life, the DFS anticipates an open pit mining of the Central sulphide ore body alone in order to maximise the sulphide copper grade and hence sulphide copper recovery.
The optimised mine schedule has been developed to minimise the stripping ratio in the initial three years of the mine life. In addition, the use of stockpiling has enabled the Company to increase the processed ore grade. From Year 4 until Year 7, sulphide ore will be mined from both the Central and North East open pits. From Year 8 until the end of mine life in Year 12, all mining will continue in the North East pit.
The average mining cost over the mine life is US$1.7 per tonne of material moved.
First production has been scheduled for Q4 2013 through to final production in 2025.
The Karchiga Project site is located 10 km from the main road and a 110 kV national power grid and is expected to be connected to the same as part of construction. An adequate supply of water can be sourced from the River Kalzhir as well as from aquifers in the immediate vicinity of the designed project facilities.
The Environmental and Social Impact Assessment Study for the Karchiga Project was successfully completed by Wardell Armstrong International on 31 January 2012. The Company expects to receive the necessary construction permitting approvals from the Kazakh authorities.
Definitive Feasibility Study Highlights:
- Post-tax NPV 7.5 of US$150 million, IRR of 30% (based on price of US$3.25/lb Cu);
- Initial capital expenditure of US$115 million;
- Payback period of 2.75 years (on initial capital expenditure);
- 11.5 years mine production of 149kt (328 Mlb) payable copper:
- Average annual production of 13kt (28.6 Mlb) of copper from sulphide and oxide ore; at a processing rate of 750,000 tonnes of sulphide ore per annum, a total of 136.3kt (300 Mlb) of copper in 27.9% concentrate; at a heap leach processing rate of 360,000 tonnes of oxide ore per annum (over 4.5 years), a total of 12.7kt (27.9 Mlb) of cathode copper;
- Life of mine cash operating cost (pre tax) of US$1.47/lb Cu;
"I am pleased with the successful completion of the DFS," states Dr Sergey V Kurzin, Executive Chairman of Orsu, "The Company, together with their consultants Endeavour Financial have been working on project debt finance options with a number of commercial and development banks with a view to enabling commencement of project construction in Q3 2012."
Dr. Kurzin is a legendary Asian Mine Builder. He played a lead role in establishing UrAsia Energy, a uranium producer with mining operations in Kazakhstan that sold to Uranium One in 2007 for $3.1 billion.
According to Canaccord Genuity: "The completion of the Karchiga DFS transitions Orsu Metals into an emerging copper producer with a low capital cost and fast track to production. Orsu's focus in Eastern Kazakhstan positions it strategically to take advantage of organic growth from its current assets as well as new opportunities in an under-explored and under-developed Copper rich region within the immediate vicinity of 4 Copper smelters and the largest Copper consumer in the world".
Orsu is currently trading at .17 with a market cap of $26 million. Net smelter revenue over the life of mine is projected to be $971 million. The Definitive Feasibility Study reveals the positive economics of the mine. With a reported $3 trillion worth of metal in the ground in Kazakhstan, and Kurzin's track record of company building, Karchiga may be just the first building block.