Orsu Metals Corporation

Orsu Metals Corporation

January 20, 2011 10:02 ET

Orsu Metals Corporation: Deferred Consideration for 2010 of US$2.7 Million Earned from Sale of the Varvarinskoye Project to OJSC Polymetal

LONDON, UNITED KINGDOM--(Marketwire - Jan. 19, 2011) - Orsu Metals Corporation ("Orsu", or the "Company") (TSX:OSU)(AIM:OSU), the London-based precious and base metals exploration and development company, is pleased to announce that it has earned deferred consideration for 2010 of US$2.7 million, pursuant to the sale and purchase agreement (the "SPA") dated 13 June 2009 relating to the sale of the Varvarinskoye Gold-Copper Project in Kazakhstan (the "Varvarinskoye Project") to Open Joint Stock Company Polymetal ("Polymetal").

Upon the closing of the sale of the Varvarinskoye Project to Polymetal in November 2009, the Company received US$8 million in cash plus a deferred consideration entitlement of up to US$12 million in cash, contingent on and calculable by reference to the future prices of both gold and copper and the future cash flows of the Varvarinskoye Project. The deferred consideration amount is calculated and, if earned, payable for each calendar year commencing in 2010, in accordance with the formula and related provisions set out in the SPA.

Pursuant to the terms of the SPA, of the US$2.7 million in deferred consideration earned by Orsu for 2010, the amount initially payable to Orsu for 2010 is capped at US$1.5 million and the balance of US$1.2 million will be rolled over and added to any payment earned by Orsu for 2011, with interest on such rolled over amount accruing at a rate of 2.8% per annum. Orsu has received the aforementioned initial US$1.5 million.

Despite the deferred consideration earnings paid to Orsu for 2010, there remains significant uncertainty in relation to Orsu's future receipt of any further deferred consideration (up to a maximum remaining entitlement of US$9.3 million (in addition to the outstanding US$1.2 million earned in 2010 which is payable in January 2012)), as future gold and copper metal price levels and the future cash flows of the Varvarinskoye Project are factors beyond the control or influence of Orsu.

Forward-looking Information

This press release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this press release includes, but may not be limited to, the amount and timing of further deferred consideration that may be paid or payable to the Company by Polymetal in the future pursuant to the SPA as well as Orsu's receipt of amounts already earned for 2010, including the timing thereof and the interest thereon, from Polymetal. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, adverse general market conditions, adverse changes in future gold and copper metal prices, reductions in, or no, future cash flows of the Varvarinskoye Project, risks normally incidental to producing mineral properties and certain other risks.

The forward-looking information in this press release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. In connection with the forward-looking information contained in this press release, the Company has made certain assumptions relating to the Varvarinskoye Project, including its continued production, and future gold and copper metal prices. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise.

Contact Information

  • Orsu Metals Corporation
    Tania Tchedaeva
    Company Secretary
    +44 (0) 20 7518 3999
    Canaccord Genuity Limited
    Ryan Gaffney
    +44 (0) 20 7050 6500
    Vanguard Shareholder Solutions
    + 1 604 608 0824