Orsu Metals Corporation has entered into a new conditional exclusivity agreement with David-Invest LLP, a Kyrgyz registered company, and a related company, David Way Limited, a Hong Kong registered company, with a view to the potential sale of its Akdjol and Tokhtazan gold exploration licences in Kyrgyzstan.
The key new terms of the agreement are:
* The potential buyers have been granted an exclusive right to purchase the Akdjol-Tokhtazan Project until December 31, 2015 conditional upon the potential buyers continuing to fund the costs of maintaining the licence;
* Orsu has the right to terminate the agreement (a) at any time, in the event of non-fulfilment of the obligation to fund the costs of maintaining the licence; or (b) on serving notice between June 24 and 30, 2015, inclusive, and September 24 and 30, 2015 inclusive.
Other than these, there have been no significant changes to the terms of the previous exclusivity agreements signed in 2012, 2013 and 2014. In particular, the key terms are as follows:
* The potential buyers have the option to purchase the Akdjol-Tokhtazan Project at any time on or before the expiry of the exclusivity period for a consideration of US$5.0 million. The previous non-refundable deposits of US$400,000 received by the company during 2014 will be applied against the consideration in the event of any sale;
* The potential buyers will fund the exploration program for the Akdjol-Tokhtazan Project licences (which are due to expire on December 31, 2015) on a non-refundable basis for the exclusivity period; and
* The potential buyers have the right to terminate the exclusivity agreement at any time.
The company will apply any proceeds from a sale to working capital and identification of other early stage exploration opportunities consistent with the company’s strategy.
Management believe that in the absence of any other firm proposals from other interested parties and given the continuing difficult market conditions facing junior mining and exploration companies, and the specific challenges relating to assets within certain countries of the Former Soviet Union such as Kyrgyzstan, the exclusivity agreement represents the best prospect for achieving the disposal of the Akdjol-Tokhtazan Project available to the company at this time and for the foreseeable future.