Orsu Metals sells Varvarinskoye to Polymetal

Monday June 15. ShareCast. LONDON

Orsu Metals Corporation (OSU.TO – news) has agreed to sell its Varvarinskoye Gold-Copper Project in Kazakhstan to OJSC Polymetal for up to $235m.

The consideration comprises of $8m in cash, plus a deferred consideration of up to a maximum of $12m in cash, contingent on and calculable by reference to the future price of both gold and copper, and the assumption of over $215m in debt and hedging obligations related to the financing of the Varvarinskoye Project.

The sale is not conditional on financing but is subject to certain conditions being satisfied, which if satisfied will mean the sale will be completed by the third quarter of 2009.

Orsu said following the sale it will have no outstanding long-term debt and intends to use the proceeds to fund its operating costs and to fund ongoing exploration activities on its existing properties, as well as any new properties acquired by it.

“Proceeds from this sale will allow Orsu to focus on developing its exploration and growth assets with renewed vigour with a substantially stronger balance sheet,” said executive chairman Sergey V Kurzin.