Acquisition

24 Nov 2006 07:00

Oxus Gold PLC24 November 2006 news release For immediate release - Friday, 24 November 2006 OXUS GOLD PLC Oxus Gold and KazakhGold in successful joint venture bid for Romanian gold plant and exploration properties LONDON: 24 November 2006 - Oxus Gold plc ("Oxus" or the "Company") announcesthat, together with KazakhGold Group Limited ("KazakhGold"), it has formed a new50:50 joint venture, Romaltyn, which has successfully bid in open auction toacquire the assets of a gold project in Romania that were placed in liquidationin April, 2005. Oxus and KazakhGold jointly bid US$6.99 million, including US$1.12m VAT, for theassets which include a 2.5m tpa gold treatment plant, formerly operated byTransgold, a 50:50 joint venture company between Eurogold Limited of Australiaand Remin, the Romanian state mining company. The plant, which ceased operatingin 2005, is located on the outskirts of the town of Baia Mare. Other assetsacquired are the 8.5m tonnes Central Tailings dump located 7.8km from the plant,together with stockpiled gold-bearing pyrite resources and two explorationtenements, Sophia and June 11, over which 12-month exploration licences will bere-instated. Once the plant is recommissioned by Romaltyn, in approximately six months time,the project offers the potential to generate rapid payback on investment andprovides an opportunity for exploration and development of additional resourcesin the area. In a second auction, the two companies paid US$300,000 for Explorer SA, acompany in voluntary liquidation which holds three further exploration tenementsin the area, the largest of which, Rascau South East, has a three-yearexploration licence. The Transgold plant was designed and built by Lycopodium for US$28m and has anestimated replacement cost of around US$40m. The JV estimates that it can bebrought back into production after expenditure of approximately US$5.25m onclean-up, minor repairs and the replacement of some equipment. Thus the totalfinancial commitment by the joint venture is estimated to be US$12.54m. Once recommissioned, the plant would treat approximately 2m tonnes of tailingsin the first year, producing approximately 30,000 ounces of gold at an averagerecoverable gold grade of 0.48g/t. The auction process on behalf of the joint bidders was led by John Cutler, chiefexecutive of MAED Ltd, the international engineering group specialising in thedesign, construction and operation of process plants for a broad spectrum ofmetals. MAED will be leading the rehabilitation and recommissioning of theTransgold plant before stepping back and handing over the project to the jointventure management team Oxus has long been interested in acquiring the Baia Mare plant and decided tobid for the Transgold assets in a joint venture with KazakhGold as part of adeveloping strategy to operate in eastern Europe and central Asia with jointventures in order to spread risk and share the funding requirements. Oxusbelieves that adopting this strategy will provide greater opportunities fordevelopment within the region. END Further enquiries: Oxus Gold plc Tel: + 44 (0)20 7907 2000Richard Wilkins, Company Secretary BanksideKeith Irons Tel: + 44 (0)20 7367 8873Oliver Winters Tel: +44 (0)20 7367 8874 This information is provided by RNS The company news service from the London Stock Exchange