b491a076-2bfc-47e5-a92b-1935db5e7b5c.pdf
Orsu Metals Corporation
TSX: OSU PRESS RELEASE May 12, 2016
Results for the quarter ended March 31, 2016 (Unaudited)
Orsu Metals Corporation ("Orsu" or the "Company") a London-based base and precious metals exploration and development company, listed on TSX (TSX: OSU), today reports its unaudited results for the quarter ended March 31, 2016 ("Q1 2016"). A full Management's Discussion and Analysis of the results ("MD&A") and Consolidated Financial Statements (Unaudited) for Q1 2016 (the "Financials") will soon be available on the Company's profile on SEDAR (www.sedar.com) or on the Company's website (www.orsumetals.com). Copies of the MD&A and Financials can also be obtained upon request from the Company Secretary.
The Financials have been prepared in accordance with applicable International Financial Reporting Standards ("IFRS").
All amounts are reported in United States Dollars ($) unless otherwise indicated. Canadian Dollars are referred to herein as CAD$ and British Pounds Sterling are referred to as GBP£.
The following information has been extracted from the MD&A and the Financials. Reference should be made to the complete text of the MD&A and the Financials.
BUSINESS UPDATE
In April 2016, the Company entered into two separate agreements with Karasat Trading FZE ("Karasat"), a company registered in the United Arab Emirates, for the sale of the Company's Karchiga Project and Kogodai Project (both defined below) in Kazakhstan.
Karchiga Project
The Company's principal and most advanced project comprising a license area in eastern Kazakhstan containing the copper bearing Karchiga volcanogenic massive sulphide ("VMS") deposit which is part of the Rudny Altai polymetallic belt (the "Karchiga Project"). Since 2012, the Company has been seeking to secure the funding required for the construction of a mine and processing facilities at the project. However, due to the continuing adverse economic environment during this period the Company was unable to secure the necessary funding required. As a result, the Company considered alternative solutions which resulted in the Company entering an agreement to sell its 94.75% interest in GRK MLD ("MLD") which owns the Karchiga Project to Karasat for an initial consideration of $7.75 million, plus deferred consideration of up to $2 million based on relief for corporate tax losses and the future recovery of Value Added Tax ("VAT") accumulated by MLD (the "Karchiga Transaction") subject to various conditions (further details of which are set out in the MD&A).
Kogodai Project
This comprises the exploration project for a prospect 70 km north west of the Karchiga Project identified as a VMS copper mineralization within the Kurchum-Kalzhir metamorphic terrain, the same tectonic unit that hosts the Karchiga deposit (the "Kogodai Project"). The Company entered into a separate agreement with Karasat to sell its effective 51% interest in the Kogodai Project for $10,000 (the "Kogodai Transaction") subject to certain conditions (further details of which are set out in the MD&A).
FIRST QUARTER 2016 HIGHLIGHTS
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A year on year reduction of $0.4 million in net losses to $0.4 million for the three months ended March 31, 2016, from $0.8 million for the three months ended March 31, 2015, along with a year on year reduction of $0.3 million in net cash outflows for the quarter.
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As at March 31, 2016 the Company had cash and cash equivalents of $4.1 million and expects to have sufficient working capital to fund its exploration and administration obligations for the next 12 months.
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In January 2016, the Company announced that further to an exclusivity agreement in April 2015 (the "Exclusivity Agreement") with David Invest LLP and a related company, David Way Limited (together the "Potential Buyers"), the Potential Buyers had not exercised their option to purchase the Company's exploration interest in Kyrgyzstan consisting of the Akdjol and Tokhtazan exploration licenses (the "Akdjol-Tokhtazan Project") before the deadline of December 31, 2015 and consequently, the Exclusivity Agreement had lapsed and that the Company and would continue discussions with the Potential Buyers, as well as other interested parties, on a non-exclusive basis.
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In January 2016, the Company announced that it received confirmation from the relevant Kyrgyz authorities that the licenses for its Akdjol-Tokhtazan Project had been extended until January 1, 2020.
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In February 2016, the Company announced that its UK registered office had changed to Berkeley Square House, Berkeley Square, London W1J 6BD, United Kingdom following the end of the Company's lease for its former offices at 1 Red Place, London on February 6, 2016.
POST QUARTER HIGHLIGHTS
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In April 2016, the Company announced that it entered into two separate agreements in respect of the Karchiga Transaction and the Kogodai Transaction for the sale of the Karchiga Project and Kogodai Project to Karasat subject to the successful completion of various conditions as set out in (as set out below in the MD&A).
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In May 2016, the Company announced that it had received $100,000 deposit from Karasat pursuant to the terms of the Karchiga Transaction.
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In May 2016, the Company announced that, effective from May 11, 2016, it shares were no longer admitted for trading on the London Alternative Investment Market ("AIM").
FINANCIAL RESULTS FOR Q1 2016
For Q1 2016 the Company reported a net comprehensive loss of $0.4 million, compared to a net loss of $0.8 million for the three months ended March 31, 2015.
In April, the Company announced the sale of both the Karchiga Project and the Kogodai Project and as a result re-classified the assets and liabilities in relation to both projects as at March 31, 2016 as well as the combined net losses of both projects for the three months ended March 31, 2016 and 2015 as "Assets held for sale".
As at March 31, 2016 the Company had net assets of $11.8 million ($12.2 million as at December 31, 2015) of which $4.1 million was held in cash and cash equivalents ($4.7 million as at December 31, 2015).
The net loss of $0.4 million for the three months ended March 31, 2016 consisted of: administrative costs of
$0.2 million, legal and professional costs of $0.1 million, and a net loss of $0.1 million in relation to the disposal group asset held for sale.
LIQUIDITY AND CAPITAL RESOURCES
As at March 31, 2016 the Company's main source of liquidity was unrestricted cash and cash equivalents of
$4.1 million, compared with $4.7 million as at December 31, 2015.
During the three months ended March 31, 2016 the net cash used by the Company's operating expenditures was $0.6 million, compared to $0.9 million for the three months ended March 31, 2015.
The minimum working capital the Company estimates for 2016 is set out below:
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Estimate for the full
year
$000
|
|
Estimated corporate and administrative expenditure (1)
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2,000
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Note:
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In estimating the forecast expenditures, the Company has applied an assumed average 2016 exchange rate of GBP£/ $ of 1.4882 for its UK corporate expenditures. The estimated expenditure excludes significant exploration expenditures at the Karchiga Project and Kogodai Project, but does include estimates of continuing administrative costs for those projects during the completion period.
Consolidated statements of net loss and comprehensive loss (Unaudited)
(Prepared in accordance with IFRS)
|
Three months ended March 31,
|
|
2016
$000
|
2015
$000
|
|
Operating expenses
|
|
Administration
|
(173)
|
(595)
|
|
Legal and professional
|
(102)
|
(38)
|
|
Foreign exchange losses
|
(29)
|
-
|
|
Loss from disposal group assets held for sale
|
(111)
|
(161)
|
|
(415)
|
(794)
|
|
Unrealized gain on share warrant liability
|
3
|
38
|
|
Net of finance income less finance expense
|
5
|
(8)
|
|
8
|
30
|
|
Net loss and comprehensive loss for the period from continuing operations
|
(407)
|
(764)
|
|
Loss from discontinued operation
|
(30)
|
(58)
|
|
Net loss and comprehensive loss for the period
|
(437)
|
(822)
|
|
Net loss attributable to owners of the parent:
|
|
Loss from continuing operations
|
(388)
|
(596)
|
|
Loss from discontinued operations
|
(30)
|
(58)
|
|
Loss and comprehensive loss for the period attributable to the parent
|
(418)
|
(654)
|
|
Net loss attributable to non-controlling interests:
|
|
Loss from continuing operations
|
(19)
|
(168)
|
|
Loss from discontinued operations
|
-
|
-
|
|
Loss and comprehensive loss for the period attributable to non-controlling interests
|
(19)
|
(168)
|
|
Loss per share (US dollar per share) from continuing operations:
|
|
Basic
|
$(0.00)
|
$(0.00)
|
|
Diluted
|
$(0.00)
|
$(0.00)
|
|
Loss per share (US dollar per share) from discontinued operation:
|
|
Basic
|
$(0.00)
|
$(0.00)
|
|
Diluted
|
$(0.00)
|
$(0.00)
|
|
Weighted average number of common shares (in thousands)
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182,696
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182,696
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