News that gold mining giant China National Gold is now moving to take over the Kluchi mine in Siberia, which lies right next to Orsu Metals Corp's (CVE:OSU) Sergeevskoe gold project augurs well for the mining junior.
It had been agreed two years ago that India's Sun Gold would sell a 70% stake in the Kluchevskoye gold deposit to China National Gold, but the deal hit the buffers for various reasons, including bureaucratic issues in Russia.
But now it's been ratified by the Russian Duma.
A pre-production investment of up to US$500 million is planned, the partners revealed last week, and an open pit mine is expected to be built at the Kluchevskoye deposit producing 6.5 tonnes of gold a year.
There is no date, as yet, for a first gold pour.
That a highly experienced mine developer is moving into the area underlines the excitement about exploiting this area - the Mogocha mineral district in south-eastern Siberia - and could mean the Chinese are keen to get in on the ground further and consolidate other assets.
Sergeevskoe lies just 300 metres west of the 5.5mln ounce-plus Kluchi gold mine and 5km east of the 2.2mln ounce-plus Aleksandrovskoe gold mine.
The Mogocha mineral district has thus far already accounted for more than 18mln ounces of gold production.
The mineralisation of the Kluchi mine comes right up to the licence edge of Sergeevskoe.
Maiden resource eyed
At Sergeevskoe, Orsu is aiming for a maiden resource by the fourth quarter this year and the target is for between 1.8mln and 2.5mln ounces gold in hypogene and oxide material, which is contained in between 30mln tonnes and 36mln tonnes grading between 1.5 and 2.0 g/t (grams per ton) gold.
Orsu’s director of exploration Dr Alexander Yakubchuk has said: “We plan to deliver a 2.5mln ounce resource. And if we get this it would mean our discovery costs would be in the region of US$2.00 per ounce.”
This is very low, not least because Sergeevskoe is a project that was previously explored.
Much work has been done there over the years, but the ground has been untouched since the 1960s.
Therefore any existing data for Sergeevskoe, once checked, can just be rolled into any updated Orsu model.
Orsu Metals shares are unchanged on Thursday at C$0.21 in Toronto.