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Orsu Metals Corp: DEEP DIVE
OVERVIEW

Orsu Metals has the ambition, funding and geology to grow the Sergeevskoe resource

The miner is advancing the Sergeevskoe gold project in the Mogocha district of the Zabaikal’skiy region
The Tran-Siberian railway
OVERVIEW: OSU The Big Picture
The Tran-Siberian railways lies around 35km away
  • A positive maiden resource for its Sergeevskoe gold project in Russia with big potential to expand

  • Plans and funded (with US$1.5M in bank) to drill up to 3,500 meters to see if it can double the estimate  to 3M ounces

  • A preliminary economic assessment expected to be released by May or June this year


Orsu Metals Corporation (CVE:OSU) is focused on advancing its 90% owned Sergeevskoe gold project in the Mogocha district of the Zabaikal’skiy region of the Russian Federation. The licence covers an area of 7.6 sq km and lies around 40 km southwest of the town of Mogocha. The district hosts a large railway station on the Trans-Siberian Railway which runs within around 35km of the licence area.

Notably, Sergeevskoe's eastern boundary lies just 300 metres west of  past producing gold mine Klyuchevskoe, which has historically produced over 1.3 million ounces of gold from an open pit.

The Klyuchevskoe deposit has estimated mineral resources containing 47.8 tonnes of gold in Russian style A+B+C1 categories and 26.6 tonnes of gold in Russian style C2 category. In Addition, the Alexandrovskoe gold mine, owned by Zapadnaya Gold Mining, lies to the west of the license area and produced 38,000 ounces of the yellow metal in 2018.

How it's doing

A major milestone was reached in April this year, when a maiden resource was announced for the project from scratch and after US$4 million of investment in two years.The pit-constrained inferred resource was put at 25.09 million tonnes, at a grade of 1.47 g/t (grams per ton) gold, containing 1.19 Moz (million ounces) gold. The firm added there was strong potential to grow the resource further.

"Given that only less than one square kilometer of Orsu's 7.6 square kilometer property has been drilled so far, a maiden pit and license constrained resource makes an excellent start.

Our recent work has generated an abundance of additional targets to be tested in 2019," said the group's executive chairman Dr. Sergey V Kurzin.

Meanwhile, Sergei Stefanovich, managing director at Orsu, and who owns 20% of the firm, was quoted in a recent interview with The Northern Miner, as saying: "It’s a good number to start, and the plan, of course, would be to see if we can grow it to north of 2.5 million or 3 million oz. over the next two to three years, and uplift the quality, moving it from inferred to measured and indicated."

His comments were echoed by director of Exploration Dr Alexander Yakubchuk, who recently told Proactive Investors: "Our mission does not stop at 1.19 ounces." He added: "The system is open. Doubling (it) is not a difficult thing to do. Its realistically possible."

In particular, the firm wants to test the western continuation and also where it remains open to the north. The group is waiting for approval to expand its deforestation permit and expects to restart exploration drilling in June.

Yakubchuk reckons by late September or October following the latest drill program, Orsu should know whether 3 million ounces could be possible. It wants to do a preliminary feasibilty study within the first half of 2021.

The company also plans to do some bulk tests potentially, subject to negotiations and approvals, at a mill 5 km away that is part of the operating Alexandrovskoe gold mine.

Adding another dimension to the Orsu story is that Sun Gold is currently selling a 70% stake in the Klyuchevskoe project to China National Gold Group, one of the largest miners on the planet. The titan plans to restart the mine as a large-tonnage open pit, so acquiring the nearnby Sergeevskoe would make sense.

Inflection points

  • More drill results
  • Preliminary Economic Assessment result

What the managing director said

In an 'In the Pit' interview for The Independent Speculator, Sergei Stefanovich said: "I run the company very, very frugally. Our G&A is low. Essentially all the money goes into the project."

"We're spending money specifically on exploration. We are not in the business of raising cash from the shareholders and recycling this into salaries in the pockets of the management."
Fleshing out some numbers on the maiden resource, he noted that US$4million (the amount the firm has spent on exploration) divided by 1.2 million ounces "in the optimized pit" works out to be something like  US$3.5 per ounce. "That's like 50% of what the benchmark would be for an inferred ounce across the world."

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