Oxus Gold Plc Regulatory News (OXS)

OXUS GOLD PLC

AGF Operations Update

17 May 2010 - Oxus Gold plc ("Oxus" or the "Company") today announces that it has recommenced mining at its 50% owned Amantaytau Goldfields ("AGF") joint venture in Uzbekistan.

Mining of open pit oxides recommenced on 12 May 2010 at the Nukrakon (formerly Vysokovoltnoye) heap leach silver / gold mine.

Operations at Nukrakon had been suspended since March 2009 pending the refining of an accumulated stockpile of 18.2 tonnes of silver doré, which AGF had been unable to process through the Almalyk silver refinery on a timely basis. Agreement was reached with the refinery on further processing in July 2009, following which the entire stockpile has been refined, exported and sold. Further stacking and irrigation of the heap leach pads resumed in November 2009, utilising previously mined and stockpiled ore. By 31 December 2009 a total of 13,806 tonnes of ore containing a head grade of 1.01 grammes per tonne ("g/t") of gold and 76.7 g/t of silver had been stacked. By 30 April 2010 a further 86,596 tonnes of ore had been stacked, containing a head grade of 0.92 g/t gold and 78.2 g/t silver.

An extension to the mining contract with BCM International has now been signed and mining operations have restarted, in accordance with a business plan approved by the shareholders of AGF on 26 April 2010. Initial mining activity will focus on approximately 62,000 tonnes of ore which was blasted prior to the suspension of operations, containing an average grade of 1.2 g/t gold and 189 g/t silver. Subsequent mining is expected to proceed at a rate of 35,000 tonnes per month from the Nukrakon Orezone No 7 pits.

AGF has decided not to process the Sarybatyr open pit oxide ore through the carbon-in-pulp ("CIP") plant as originally planned since further metallurgical testwork and economic analysis demonstrates that this deposit will be more profitably processed by heap leaching. AGF therefore does not plan to operate the CIP plant until it is converted into a bio-oxidation plant to treat sulphide ore from the proposed underground mine at Amantaytau Severny and Centralny. An amended feasibility study in respect of heap leaching Sarybatyr has been resubmitted to the appropriate authorities in order to obtain the mining licence, and exploration work on the surrounding oxide deposits has also commenced.

Once the appropriate approvals have been obtained AGF plans to mine the Sarybatyr deposit, which has a Proven and Probable Oxide Reserve of 1.61 million tonnes at an average grade of 1.88 g/t gold, and then the balance of the Nukrakon deposit and a further six deposits in the immediate vicinity (Nukrakon Orezone No 4, Central Karasai, Western Karasai, Tumshuktau, Yasaul and Taskazgan). This one million tonne per annum heap leach operation is expected to produce a total of 340,000 ounces of gold equivalent over a twelve year period. Economic appraisals are being carried out to determine the optimum throughput of this operation, with the possibility of increasing the monthly throughput from 80,000 to 120,000 tonnes by the installation of additional crushing equipment.

In parallel to the Nukrakon operation, a second one million tonne per annum heap leach plant is being considered for commissioning at Asaukak during 2011. This operation could produce a further 250,000 ounces of gold over a ten year period from the existing stockpile of Asaukak ore (1.32 million tonnes at 0.64 g/t, containing 27,000 ounces of gold) and subsequent mining of surrounding deposits, to include Aksai, Northern Asaukak, Sredinny, North Eastern and Northern Daugystau.

Richard Shead, Executive Chairman, commented: "The restart of open pit mining, and the commencement of the substantial exploration programme that we recently announced is good news. Together with the development of the proposed underground mine, there is real potential to transform AGF, and therefore, Oxus into a significant gold producer and explorer. Our objective over the next 3 to 5 years is to increase gold production at AGF to 300,000 ounces per annum, and to increase AGF's gold reserves from the current 2.4 million ounces to over 7 million ounces, after allowing for mining depletion. We have submitted our draft foreign investment agreement in respect of the underground mine to the Uzbek Government and we look forward to concluding the appropriate negotiations as soon as possible and then to completing the proposed financing of up to $185 million from the CITIC Group consortium, as announced in January 2010."

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