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Orsu Metals steadily advancing its Sergeevskoe gold project in Russia

Snapshot

The licence covers an area of 7.6 sq km and lies around 40 km southwest of the town of Mogocha

Orsu Metals Corporation -

Quick facts: Orsu Metals Corporation

Price: 0.26 CAD

TSX-V:OSU
Market: TSX-V
Market Cap: $9.87 m
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  • Fast and low cost journey already to maiden resource

  • Only 1 sq km of the 7.6 sq km property has been drill tested

  • Just 300 metres west of past producing gold mine Klyuchevskoe

What Orsu Metals does:

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 square kilometres (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. It is also 8km from a motorway.

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 the 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.

Orsu bought the licence at a public auction for Sergeevskoe from the Russian government in 2013 and it is valid until 2031, which means once the firm gets all other necessary permits it can start mining.

How is it doing:

A major milestone was reached in April this year, when a maiden resource was announced for Sergeevskoe 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 grams per ton (g/t) gold, containing 1.19 million ounces (Moz) gold and the firm noted that there was strong potential to grow the resource further.

In July, Orsu kicked off the 2019 exploration season at Sergeevskoe with a 3,500 metre (m) drilling and 3,000m trenching program starting.  The firm is expanding activity into other parts of the 7.6 sq km Sergeevskoe license, which will include drill testing of the Sergeeva and Pridorozhnoe occurrences beyond the 1 sq km which was the focus in 2017-2018.

In early September, Orsu said it had made a discovery at an area known as Peak Klyuchi on the property, with new gold-mineralized zones found over a 400-metre strike length. More than 10 new gold-mineralized veins were found within a 475m by 300m area.

The company believes Peak Klyuchi may eventually merge into one mineral system with the Klyuchi West, Intermediate, and Kozie domains

One hole hit 1.7 g/t gold and 16.1 g/t silver over 6.1m and 0.7 g/t gold and 5.8 g/t silver over 6.5m. The company also confirmed that Zone 23 at the project was heading southwest, not west-east as previously thought, with one trench yielding 1.94 g/t of gold over 4m and 1.92 g/t  over 13m among other assays.

Orsu said it has now finished all the drilling as part its 2019 exploration program, with 3,555.45m sunk in 13 holes at Sergeevskoe.  Trenching is also finished but logging and sampling of four remaining trenches are ongoing and this is expected to be completed during October.

In March, 2019, the group had US$1.5 million in cash and in May this year. Financing would be needed for a further, bigger 9,000m drill program to upgrade the resource to measure and indicated category and for a preliminary feasibility study, according to Orsu's Director of Exploration, Dr Alexander Yakubchuk.

Another idea is that the firm embark on possible plans to potentially carry out bulk tests for some pilot mining, subject to negotiations and approvals, at a mill 5 km away that is part of the operating Alexandrovskoe gold mine, which would bring in cash it could use to expand the resource that way.

Inflection points:

  • Drilling results
  • Futher metallurgical work
  • Resource expansion

What the boss says:

Orsu's executive chairman Dr. Sergey V Kurzin has said: "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."

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