6 Nov 2008 07:00
Embargoed 7am 6/11/08 6 November 2008
OXUS GOLD PLC
Amantaytau Goldfields increases Bankable Feasibility Study gold reserves by 271,000 ounces
Highlights
Amantaytau Goldfields (50% owned) increases BFS gold reserves by 271,000 ounces to 2.01 million ounces
Ungeared, after tax NPV for the project has increased by US$57 million to US$386 million at a 7% discount rate per annum
IRR increases from 50% to 52%
Oxus Gold plc ("Oxus" or the "Company") announces an increase of 271,000 ounces of gold in the JORC classified Proven and Probable Ore Reserves in the Bankable Feasibility Study ("BFS") compiled by Wardell Armstrong International ("WAI") for its 50% owned Amantaytau Goldfields ("AGF") underground sulphide project in Uzbekistan (the "Project"), the results of which were previously announced on 23 June 2008. As a result of this increase, the ungeared, after tax NPV for the Project has increased by $57 million to $386 million at a 7% discount rate per annum. The IRR has increased to 52%.
Having reviewed the status of further metallurgical testwork on the Amantaytau Centralny sulphides, the Company's mining consultants WAI have now included the Amantaytau Centralny transitional material in AGF's Ore Reserve statement, with an estimated flotation recovery of 85%. This transitional material, together with some underlying primary sulphide ores, was previously excluded from the production schedule in the BFS completed in June 2008, pending this review of further metallurgical testwork. This transitional material amounts to an additional 1.78 million tonnes of Ore Reserve, at an average grade of 4.73 grammes per tonne ("g/t") containing 271,000 ounces of gold in the Probable Ore Reserve category.
Total JORC classified Proven and Probable Ore Reserves are 8.94 million tonnes at 6.99 g/t containing 2.01 million ounces of gold. These Ore Reserves have been estimated for stoping blocks above a 3.5 g/t cut-off at Amantaytau Severny and a 2.0 g/t cut-off at Amantaytau Centralny.
The above 2.01 million ounce reserve is contained within the JORC classified Measured and Indicated sulphide mineral resource base, totalling 13.5 million tonnes, at 6.89 g/t containing 2.99 million ounces of gold.
Following the review of the metallurgical testwork on the Amantaytau Centralny sulphides and the inclusion of the increase in reserves plus associated extraction costs, the financial analysis of the Project, as approved by WAI in the BFS, has been revised as follows:
IRR of 52%, from 50%
NPV = $631 million at 0% discount rate per annum
NPV = $444 million at 5% discount rate per annum
NPV = $386 million at 7% discount rate per annum
NPV = $314 million at 10% discount rate per annum.
Life of mine increased to 8 years from 7 years
With the exception of the inclusion of the additional reserves and associated extraction costs, all other assumptions underlying the financial analysis in the original BFS remain unchanged. The Company will continue to provide updates in the event of any further material revisions to the underlying assumptions of the BFS.
Ongoing mine design and optimisation is expected to result in further mineral resources being converted to reserves by early 2009.
Richard Wilkins, CEO of Oxus, commented: "This represents a significant increase in the value of AGF's underground sulphides project. This Project is economically robust and our priority now is to finalise the project financing to enable AGF to construct the sulphide mine during 2009 and achieve first underground production in early 2010."
Fifty percent of the AGF ore reserves and mineral resources are attributable to Oxus.
END
Notes to editors
Oxus Gold plc is a gold and silver mining company with primary operations in the Republic of Uzbekistan through a 50% stake in the Amantaytau Goldfields (AGF) Joint Venture. The company has produced over 500,000 ounces of gold since January 2004 and 1.25 million ounces of silver since June 2007.
AGF has rights to a 192 sq km licence area containing 58 explored gold deposits and occurrences, of which 25 have JORC classified mineral resource estimates and only 3 have been exploited to date. The most significant of these deposits are Amantaytau Severny and Amantaytau Centralny which were the focus of the recent Bankable Feasibility Study for development of a new underground mine. The AGF licence area is within the Navoi District of Uzbekistan, some 30 km south east of the town of Zarafshan and 25 km south west of the world renowned Muruntau gold mine, and located on the Tien Shan Gold Belt.
AGF currently produces approximately 70,000 gold equivalent ounces per annum from open pit oxide mines. The underground sulphide mine is expected to be in production in 2010 and will increase annual production to 300,000 ounces.
The aim of Oxus Gold Plc is to become a world class precious metals producer and Uzbekistan's flagship mining company on international markets.
For further information, please contact:
| Oxus Gold plc Richard Wilkins (CEO) | Tel: +44 (0) 207 907 2000 |
| www.oxusgold.co.uk Canaccord Adams Limited Nominated Adviser / Joint Broker Mike Jones | Tel +44 (0) 207 050 6500 |
| Fairfax I.S. PLC Joint Broker Ewan Leggat | Tel: +44 (0) 207 598 5368 |
| Conduit PR Ltd Jane Stacey/Fiona Hyland/Ed Portman | Tel: +44 (0) 207 429 6606/ Mob: +44 792 292 3306 |
Competent Persons:
The reserves and revised financial analysis stated in this RNS Announcement have been complied or Approved by the following Competent Persons:
Philip S Newall, BSc, ARSM, PhD, CEng, FIMM
Wardell Armstrong International Ltd
Wheal Jane, Baldhu, Truro, Cornwall, TR3 6EH
Tel: +44 1872 560738 Fax: +44 1872 561079
Web: //www.wardell-armstrong.com
Mr Newall is Senior Consulting Geologist and Director with WAI and has practiced his profession as a mine and exploration geologist for over twenty years for both base and precious metals.
William J Charter, BSc, CGeol, FGS, CEng, MIMM
Bill Charter has over 29 years' experience in mining and exploration industry. Having gained experience with Anglo American Corporation (in Fiji and South Africa) , he then worked in Central Asia and other locations worldwide. Bill started work with the Oxus Group in 1996.