Oxus Gold Plc Regulatory News (OXS)

2 Aug 2006 07:00

Eurogold Limited02 August 2006 RE-RELEASE OF 4TH QUARTER RESULTS The text of the announcement set out below is unchanged from that released on31st July, 2006. The announcement is being re-released for market clarity to facilitate a Related Company link to Oxus Gold PLC. EUROGOLD L I M I T E D (ACN 009 070 384) ASX ANNOUNCEMENT 31 July 2006 ASX/AIM Symbol "EUG" The period since our last quarterly report released on 30 April 2006 has been aneventful, if not an entirely productive one for your Company. Highlights •Further encouraging results from the recently completed underground drilling programme at Saulyak. •Eurogold has accepted Oxus Gold Plc's (Oxus) repudiation of the asset sale agreement and has commenced legal proceedings against Oxus and its subsidiary Oxus Holdings (Malta) Limited (OHML) seeking damages. •Successfully completed a placement to raise A$2,000,000 by issuing 40,000,000 fully paid ordinary shares each at $0.05, each with one free attaching option exercisable on or before 30 June 2009 at A$0.10 for each share subscribed. •Appointed Mr Simon Pepper as Eurogold's Chief Operating Officer. •Mr Chris Barker has resigned as a director. Ukraine - Saulyak Gold Project (Eurogold 99.72%) As reported on 11 July 2006 Eurogold's underground drilling programme at theSaulyak Project in the Ukraine has been the main focus of activities for thelast 6 months. This programme is being undertaken to: 1. confirm and improve the understanding of the mineralisation andgeological controls for the upper levels of the Saulyak deposit; 2. to help facilitate certification of Saulyak's existing C1 and C2category ore reserves (under the Soviet resource classification system) by therelevant Ukrainian authorities; and 3. to enable a JORC Code compliant Mineral Resource for the Saulyakdeposit to be estimated. Results from a total of 70 holes have now been received for a total of 1,671metres. Mineralised intersections from 52 drillholes (including those previouslyreported in Eurogold's December 2005 and March 2006 quarterly reports) are shownin the table below. The other 18 drillholes were targeted at providing valuablegeological structure information. The results have confirmed the tenor and width of the Saulyak mineralisation andare expected to enhance the results of the resource modelling exercise currentlybeing undertaken. Of particular interest are the encouraging results from thedeepest intersections (drillholes 884, 888, 893 and 894) into Orebody 2. +-----------+----------+----------+--------+---------+ | Drillhole | From | To |Interval| Gold | +-----------+----------+----------+--------+---------+ | # | (m) | (m) | (m) | g/t | +-----------+----------+----------+--------+---------+ | 581 | 9.40 | 11.00 | 1.60 | 4.20 | +-----------+----------+----------+--------+---------+ | 583 | 10.47 | 15.45 | 4.98 | 3.59 | +-----------+----------+----------+--------+---------+ | 583A | 7.22 | 14.30 | 7.08 | 5.58 | +-----------+----------+----------+--------+---------+ | 584 | 5.58 | 14.40 | 8.82 | 7.88 | +-----------+----------+----------+--------+---------+ | 585 | 13.60 | 15.85 | 2.25 | 3.54 | +-----------+----------+----------+--------+---------+ | 586 | 14.93 | 19.68 | 4.75 | 2.28 | +-----------+----------+----------+--------+---------+ | 592 | 0.50 | 4.76 | 4.26 | 10.17 | +-----------+----------+----------+--------+---------+ | 608 | 15.37 | 17.39 | 2.02 | 10.05 | +-----------+----------+----------+--------+---------+ | 612 | 4.45 | 10.70 | 6.25 | 4.20 | +-----------+----------+----------+--------+---------+ | 613 | 4.51 | 5.26 | 0.75 | 1.06 | +-----------+----------+----------+--------+---------+ | 615 | 0.00 | 5.19 | 5.19 | 1.28 | +-----------+----------+----------+--------+---------+ | 616 | 4.77 | 7.26 | 2.49 | 4.01 | +-----------+----------+----------+--------+---------+ | 619 | 4.57 | 5.14 | 0.57 | 3.83 | +-----------+----------+----------+--------+---------+ | 734 | 5.62 | 7.40 | 1.78 | 1.92 | +-----------+----------+----------+--------+---------+ | 736 | 2.58 | 4.65 | 2.07 | 5.71 | +-----------+----------+----------+--------+---------+ | 738 | 5.25 | 6.87 | 1.62 | 6.59 | +-----------+----------+----------+--------+---------+ | 767 | 4.21 | 13.26 | 9.05 | 4.80 | +-----------+----------+----------+--------+---------+ | 847 | 8.43 | 11.52 | 3.09 | 2.23 | +-----------+----------+----------+--------+---------+ | 848 | 23.93 | 26.00 | 2.07 | 2.85 | +-----------+----------+----------+--------+---------+ | 849 | 11.05 | 15.15 | 4.10 | 3.22 | +-----------+----------+----------+--------+---------+ | 850 | 9.61 | 11.65 | 2.04 | 3.34 | +-----------+----------+----------+--------+---------+ | 851 | 5.66 | 12.33 | 6.67 | 5.05 | +-----------+----------+----------+--------+---------+ | 852 | 3.81 | 6.36 | 2.55 | 1.43 | +-----------+----------+----------+--------+---------+ | 853 | 14.50 | 16.11 | 1.61 | 2.11 | +-----------+----------+----------+--------+---------+ | 854 | 2.32 | 3.27 | 0.95 | 2.10 | +-----------+----------+----------+--------+---------+ | 855 | 7.30 | 11.56 | 4.26 | 10.92 | +-----------+----------+----------+--------+---------+ | 857 | 6.75 | 8.95 | 2.20 | 6.82 | +-----------+----------+----------+--------+---------+ | 858 | 7.36 | 9.61 | 2.25 | 3.77 | +-----------+----------+----------+--------+---------+ | 859 | 24.25 | 25.80 | 1.55 | 0.89 | +-----------+----------+----------+--------+---------+ | 860 | 20.16 | 25.54 | 5.38 | 2.97 | +-----------+----------+----------+--------+---------+ | 861 | 19.50 | 23.62 | 4.12 | 53.28 | +-----------+----------+----------+--------+---------+ | 862 | 6.76 | 11.10 | 4.34 | 29.04 | +-----------+----------+----------+--------+---------+ | 881 | 6.65 | 8.16 | 1.51 | 1.01 | +-----------+----------+----------+--------+---------+ | 883 | 0.96 | 2.93 | 1.97 | 1.81 | +-----------+----------+----------+--------+---------+ | 884 | 12.37 | 18.53 | 6.16 | 6.03 | +-----------+----------+----------+--------+---------+ | 888 | 0.97 | 3.94 | 2.97 | 8.04 | +-----------+----------+----------+--------+---------+ | 889 | 6.12 | 9.88 | 3.76 | 5.09 | +-----------+----------+----------+--------+---------+ | 890 | 8.73 | 9.41 | 0.68 | 2.84 | +-----------+----------+----------+--------+---------+ | 891 | 1.03 | 2.93 | 1.90 | 2.86 | +-----------+----------+----------+--------+---------+ | 892 | 9.28 | 10.55 | 1.27 | 6.53 | +-----------+----------+----------+--------+---------+ | 893 | 1.50 | 8.83 | 7.33 | 18.80 | +-----------+----------+----------+--------+---------+ | 894 | 0.36 | 5.40 | 5.04 | 32.79 | +-----------+----------+----------+--------+---------+ | 922 | 21.49 | 26.09 | 4.60 | 13.77 | +-----------+----------+----------+--------+---------+ | 923 | 25.83 | 31.23 | 5.40 | 2.59 | +-----------+----------+----------+--------+---------+ | 924 | 16.09 | 19.16 | 3.07 | 10.29 | +-----------+----------+----------+--------+---------+ | 925 | 1.62 | 4.10 | 2.48 | 4.93 | +-----------+----------+----------+--------+---------+ | 926 | 0.00 | 4.88 | 4.88 | 2.78 | +-----------+----------+----------+--------+---------+ | 927 | 1.85 | 3.27 | 1.42 | 8.90 | +-----------+----------+----------+--------+---------+ | 928 | 3.87 | 8.00 | 4.13 | 1.78 | +-----------+----------+----------+--------+---------+ | 930 | 0.00 | 6.38 | 6.38 | 7.39 | +-----------+----------+----------+--------+---------+ | 931 | 0.92 | 5.12 | 4.20 | 3.12 | +-----------+----------+----------+--------+---------+ | 934 | 9.35 | 13.35 | 4.00 | 4.95 | +-----------+----------+----------+--------+---------+ Asset Sale Agreement with Oxus •On 30 April 2006 we referred to, amongst other things, that "Eurogold has agreed subject to shareholder approval, to sell its Ukrainian gold mining assets and its Romanian exploration assets to Oxus Gold Plc (OXS) for approximately £11 million (AUD$26m). Part of the consideration will be satisfied by the cancellation of Oxus's 17% shareholding in Eurogold (15.44% on a fully diluted basis) and the balance (approximately A$23m) in cash." We also released results from our drilling programme that were available at thatpoint in time which we described as "consistent with expectations and confirmedthe presence of robust economic mineralisation in No 1 Orebody" on the SaulyakGold Project. We also referred to the fact that "An audit of operations by the Ukrainian StateGeological Commission concluded that the project is on track for approval of C1and C2 category ore reserves within the required licence time frame." •On 9 June 2006 Oxus advanced US$416,000 to Eurogold (against the proceeds of the Asset Sale Agreement) to fund the Saulyak Gold Project. •On 16 June 2006 we reported that shareholders had approved the Oxus transaction and Oxus had voted in favour of authorising Eurogold to cancel the Oxus shareholding as part of the consideration for the Oxus transaction. •On 3 July 2006 we reported that "On 29 June 2006 by notice Oxus terminated the sale on the basis that there had been a material adverse change in the financial position and assets of Eurogold group since 30 April 2006 being the date of execution of the Asset Sale Agreement. The notice of termination refers to, amongst other things, the standing of the Saulyak licence in the Ukraine. Eurogold disputes that Oxus was entitled to terminate the sale and has reserved all of its rights against Oxus. Eurogold and Oxus have commenced discussions on a "without prejudice" basis todetermine if they can agree to stagger (not change) the consideration until suchtime as this disputed issue is resolved. There can be no assurance that Eurogoldand Oxus will be able to resolve all disputed issues. If Eurogold and Oxus can agree then Eurogold will again need to get shareholderapproval. If Eurogold and Oxus cannot agree then Eurogold will be forced to raise capitalof up to A$2m to fund working capital, pursue its rights against Oxus andprotect its position generally." •On 11 July 2006 we informed the market that the Company had not been able to reach agreement with Oxus and gave an update on the Saulyak Gold Project describing the additional results as encouraging and likely to enhance the Saulyak resource. The release went on to explain the reasons Oxus gave for terminating the AssetSale Agreement and our response. •On 26 July 2006 Oxus wrote to Eurogold seeking repayment of the US$416,000 plus interest. Eurogold has responded saying that Oxus has no entitlement to payment or alternatively that it may set off the amount against Eurogold's claim for damages (see below). •Oxus' claim to have terminated the Asset Sale Agreement has entitled Eurogold to terminate the Asset Sale Agreement itself. Eurogold has terminated the Asset Sale Agreement. Termination of the Asset Sale Agreement will require Eurogold to negotiate with the Ukrainian authorities to come to an agreement concerning a revised expenditure programme. Eurogold will keep the market informed of any developments in this regard. Legal proceedings commenced against Oxus •Eurogold and its subsidiary Eurogold Holdings (Bermuda) Limited have today commenced legal proceedings against Oxus and OHML arising from Oxus' and OHML's claim to terminate, and refusal to complete, the Sale Agreement. Eurogold will quantify its damages after expert evidence. Transgold S.A. (Eurogold 50%) As reported in our last quarterly report, Transgold has been placed intoliquidation and the status of Transgold remains the same. Placement •On 11 July 2006 we announced a placement to raise up to A$2,000,000 by issuing up to 40,000,000 fully paid ordinary shares each at $0.05, each with one free attaching option exercisable on or before 30 June 2009 at A$0.10 for each share subscribed. The purpose of the placement was to provide short term working capital whilst it considers its position and to enable it to continue its work program in the Ukraine. The issue of options was subject to shareholder approval and lodgement of a prospectus with the Australian Securities and Investments Commission. •The placement has now been fully completed, subject to shareholder's approving the participation by Mr Peter Gunzburg, a director of the Company, for A$250,000. •Eurogold has also informed Oxus that, without prejudice to its contention that it is entitled to set off (see above) Eurogold will seek shareholder approval for the placement of shares to raise funds "for the purpose of repaying the funds and interest (advanced)". If shareholder approval is given, and Eurogold is successful in raising funds for that purpose, it will set them aside, to await determination of Eurogold's claim for damages for breach of the Agreement, and/or the determination of the question whether Eurogold is entitled to set off. A date is yet to be set for the shareholder meeting. Board and Management Changes •Mr Charlie Karelse has resigned as Eurogold's Chief Operating Officer based in the Ukraine and has been replaced by Mr Simon Pepper. Mr Simon Pepper has been involved in the Saulyak Project since 2004. Mr Pepper has considerable experience in the mining industry and holds a MSc Mining Geology from Camborne School of Mines and is a member of the Institute of Materials, Minerals and Mining in the United Kingdom. •Mr Christopher Barker has resigned from the Board of Eurogold. The information in this report that relates to Exploration Results, MineralResources or Ore Reserves (as those terms are defined in the 2004 edition of the"Australasian Code for Reporting of Exploration Results, Mineral Resources andOre Reserves" - the "JORC Code") is based on information compiled by Mr SimonPepper. Mr Pepper holds a MSc Mining Geology from Camborne School of Mines, is amember of the Institute of Materials, Minerals and Mining in the United Kingdomand has at least five years experience which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity whichhe is undertaking. Mr Pepper, who is a consultant to Eurogold Ltd, has reviewedthis report and consents to the inclusion in this report of the matters based onhis information in the form and context in which it appears. The Saulyak deposit is located in Ukraine and most of the previous work wasconducted by Soviet state organisations. As such, this report includesreferences to resources and reserves estimated in accordance with the Sovietclassification system. As discussed in this report, Eurogold is currentlyworking towards the conversion of these into a JORC Code compliant MineralResource estimate. Yours sincerely PETER GUNZBURG Executive Director Rule 5.3 Appendix 5B Mining Exploration Entity Quarterly Report Origin: Appendix 8Name of EntityEUROGOLD LIMITED ("EUG") ABN Quarter Ended ("Current Quarter")009 070 384 -002 30 June 2006 Consolidated Statement of Cash Flows Cash Flows Related to Operating Activities Current Quarter Year to Date $A'000 (9 months) $A'000 1.1 Receipts from product sales and related 0 121 debtors 1.2 Payments for (a) exploration and evaluation (351) (1,860) (b) development (55) (301) (c) production 0 0 (d) administration (454) (2,930) 1.3 Dividends received 0 0 1.4 Interest and other items of a similar 6 48 nature received 1.5 Interest and other costs of finance paid 0 (1) 1.6 Income taxes paid (61) (235) 1.7 Other - (Tax/VAT) 26 26 Net Operating Cash Flows (889) (5,132) Cash Flows Related to Investing Activities 1.8 Payment for purchases of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets (12) (176) 1.9 Proceeds from sale of: (a) prospects 0 0 (b) equity investments 0 0 (c) other fixed assets 0 01.10 Loans to other entities (404) (1,167)1.11 Loans repaid by other entities 0 01.12 Other- 0 0 Net Investing Cash Flows (416) (1,343)1.13 Total operating and investing cash flows (1,305) (6,475) (carried forward) 1.13 Total operating and investing cash flows (1,306) (6,476) (brought forward) Cash Flows Related to Financing Activities1.14 Proceeds from issues of shares, options, 0 3,098 etc.1.15 Proceeds from sale of forfeited shares 0 01.16 Proceeds from borrowings 706 7061.17 Repayment of borrowings 0 01.18 Dividends paid 0 01.19 Other (Capital Raising Costs) 0 (45) Net Financing Cash Flows 706 3,759 Net Increase (Decrease) in Cash Held (599) (2,716)1.20 Cash at beginning of quarter/year to date 784 2,9281.21 Exchange rate adjustments to 1.20 (61) (88)1.22 Cash at End of Quarter 124 124 Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the relatedentities Current quarter $A'0001.23 Aggregate amount of payments to the parties included in item 84 1.21.24 Aggregate amount of loans to the parties included in item 404 1.10 1.25 Explanation necessary for an understanding of the transactions ------------------------------------------------ Salaries, superannuation contributions, consulting and directors fees paid to Directors. ------------------------------------------------ Non-Cash Financing and Investing Activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows ------------------------------------------------- none ------------------------------------------------- 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest ------------------------------------------------- none ------------------------------------------------- Financing Facilities Available Add notes as necessary for an understanding of the position. Amount Available Amount Used $A'000 $A'0003.1 Loan facilities 0 03.2 Credit standby arrangements 0 0 Estimated Cash Outflows for Next Quarter $A'0004.1 Exploration and evaluation 2004.2 Development 50 Total 250 Reconciliation of Cash Reconciliation of cash at the end of the Current Quarter Previous Quarterquarter (as shown in the consolidatedstatement of cash flows) to the related itemsin the accounts is as follows. $A'000 $A'0005.1 Cash on hand and at bank 124 7845.2 Deposits at call 0 05.3 Bank overdraft 0 05.4 Other 0 0 Total: Cash at End of Quarter (item 124 784 1.22) Changes in Interests in Mining Tenements Tenement Nature of Interest at Interest at Reference Interest Beginning of End of Quarter Quarter (note (2))6.1 Interests in mining Berehove Gold 6.33 nil tenements Project Ukraine relinquished, reduced or lapsed6.2 Interests in mining No changes in - - tenements acquired or increased Interests Issued and Quoted Securities at End of Current Quarter Description includes rate of interest and any redemption or conversion rightstogether with prices and dates. Number Issued Number Quoted Issue Price Per Amount Paid Up Security Per Security (cents) (cents) 7.1 Preference Nil Nil N/Applicable N/Applicable +securities (description) 7.2 Issued during - Nil N/Applicable N/Applicable quarter 7.3 +Ordinary 279,679,494 279,679,494 N/Applicable N/Applicable Securities 7.4 Issued during 30,000,000 30,000,000 N/Applicable N/Applicable quarter 7.5 +Convertible Nil Nil N/Applicable N/Applicable Debt Securities (description) 7.6 Issued during Nil Nil N/Applicable N/Applicable quarter 7.7 Options 2,000,000 Nil Exercise Price Exercise Date (description) (unquoted $0.30 31 March 2007 Facilitator options) 7.8 Issued during Nil Nil Nil Nil quarter 7.9 Exercised Nil Nil Nil Nil during quarter7.10 Expired Nil Nil N/Applicable N/Applicable during quarter7.11 Debentures Nil Nil (totals only)7.12 Unsecured Nil Nil Notes (totals only) Compliance Statement 1 This statement has been prepared under accounting policies which comply withaccounting standards as defined in the Corporations Law or other standardsacceptable to ASX (see note 4). 2 This statement does /does not* (delete one) give a true and fair view of thematters disclosed. P L GUNZBURG Date: 31 July 2006 Executive Chairman Notes 1 The quarterly report provides a basis for informing the market how theentity's activities have been financed for the past quarter and the effect onits cash position. An entity wanting to disclose additional information isencouraged to do so, in a note or notes attached to this report. 2 The "Nature of Interest" (items 6.1 and 6.2) includes options in respect ofinterests in mining tenements acquired, exercised or lapsed during the reportingperiod. If the entity is involved in a joint venture agreement and there areconditions precedent which will change its percentage interest in a miningtenement, it should disclose the change of percentage interest and conditionsprecedent in the list required for items 6.1 and 6.2. 3 Issued and Quoted Securities. The issue price and amount paid up is notrequired in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for ExtractiveIndustries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of InternationalAccounting Standards for foreign entities. If the standards used do not addressa topic, the Australian standard on that topic (if any) must be complied with. = = = = = This information is provided by RNS The company news service from the London Stock Exchange