Oxus Gold Plc Regulatory News (OXS)

20 Sep 2005 15:39

Oxus Gold PLC20 September 2005 news release For immediate release: 20 September 2005 Oxus Gold plc AGF Sulphides Project Feasibility Study Completed and Construction Starts LONDON: 20 September 2005 - Oxus Gold plc (OXS.L) ("Oxus" or "the Company")reports that the feasibility study by Wardell Armstrong of the Amantaytau Phase2 Sulphide project of Amantaytau Goldfields (AGF) in Uzbekistan is complete,following an external review of the mining plan. Initial construction work onthe sulphide mining project has commenced, including underground refurbishmentand development access. During the first 4 years the project is expected to produce in excess of 180,000ounces of gold annually, commencing Q1 2007, at a direct operating cost of $167per ounce, and an average of 151,000 ounces of gold annually over the estimated13 year life of mine, at a direct operating cost of $194 per ounce. 50% of thisis attributable to Oxus. Pre-production CAPEX is estimated at $88 million. At agold price of $450 per ounce and using a 10% discount rate, the feasibilitystudy gives a project NPV of $188.8 million (ungeared), and an IRR of 117.2%. The project is designed to mine the deeper sulphide extensions to the oxideore-bodies currently being mined by open-pit methods by AGF at Centralny and tomine the underground Severny ores. Combined they contain mineable reserves of9.72 million tonnes at an average grade of 7.75 grammes/tonne (g/t) containing2.42 million ounces of gold (at a cut-off of 3.5 g/t Au) within a total resourceof 17.73 million tonnes at an average grade of 6.84 g/t, and containing 3.90million ounces at zero cut-off grade. Underground mining will utilize modern trackless methods and truck haulage bothvia shaft access and twin ramps from surface to exploit the sulphide deposits.The existing production shaft has been refurbished to gain access to formerworkings and refurbishment of the primary underground level is underway toaccess the ore. Mine development and construction of the 750,000 tonne per annumsulphide bio-oxidation plant is expected to begin before the end of 2005. The reserves are held within two mineralised zones known as Centralny andSeverny. At Centralny there are six defined ore-bodies, with ore-body 8 showingconsistently high gold grades, up to several hundreds of g/t in places, over astrike length of 420 metres. At Severny there are eight mineralised zones withthe largest and longest being traced over a strike length from 400 metres to 700metres. The underground ore-bodies are open at depth and Oxus believes that there islarge potential to increase reserves. An earlier drilling programme by theformer Soviet operators intersected mineralisation 500 metres below the lowerlimit of the current resources (about 870 metres below surface) comprising aninterval of 8 metres thick at 51.6 g/t gold with grades of up to 72 g/t. Amajor underground and surface drilling programme will start imminently with therecent arrival of two new core drill rigs to site, to target deeper knownextensions of the deposits with the objective of substantially increasingresources and reserves. Bill Trew, CEO of Oxus, said "Oxus has always considered the underground projectto be a world class project and with over 2 million ounces in mineable reservesand cash costs of below $200 per ounce life of mine, this has now been confirmedby Wardell Armstrong". "As with AGF oxides we will look to progress the construction in the fastestpossible manner to bring this to early account for the benefit of all ourshareholders". Ends For further information, please contact: Bill Trew, CEO Oxus Gold, +44 (0)20 7907 2000 Richard Wilkins, Director and Secretary +44 (0)20 7907 2000 Keith Irons, Bankside Consultants +44 (0)20 7367 8873 / 07885 356 639 This information is provided by RNS The company news service from the London Stock Exchange