Acquisition of assets

3 May 2006 07:01

Oxus Gold PLC03 May 2006 news release 3 May 2006 Oxus Gold plc Acquisition of assets from Eurogold Limited ("Eurogold") LONDON: 3 May 2006 - Oxus Gold plc ("Oxus" or "the Company"), (OXS.L), announcesthat it has entered into a conditional asset purchase agreement (the"Agreement") with Eurogold Limited ("Eurogold"), a company listed on theAustralian Stock Exchange and AIM, to acquire certain assets owned by Eurogold.Completion of the acquisition is conditional on, amongst other things, theapproval of Eurogold's shareholders in accordance with the Listing Rules of theAustralian Stock Exchange. Completion is expected to occur by the end of June2006. Under the Agreement Oxus Holdings (Malta) Limited, a wholly owned subsidiary ofOxus, will acquire all the shares in EurogoldBermuda Limited ("EBL"), a whollyowned subsidiary of Eurogold Holdings (Bermuda) Limited, which in turn is whollyowned by Eurogold, EBL owns 98.59% of SC Explorer SA, which owns certain mining exploration rightsin Romania and also, through an intermediate holding company, EBL owns 99.72% ofSaulyak Limited Liability Company, a Ukrainian mining company holdingexploration and development rights in the Saulyak gold project in the Ukraine. Under the Agreement debts owed to Eurogold by members of the Eurogold group willbe assigned to Oxus, which will then be entitled to the repayment of such loansfrom such relevant former members. EBL and each of its subsidiaries are exploration companies which to date havenot earned income. Oxus is paying Eurogold £9,159,656 in cash consideration and has agreed to thecancellation of the shares it holds in Eurogold. Oxus owns 15.44% of the equityin Eurogold, valued currently at approximately £1.727 million. A further payment of £300,000 will be made by Oxus to Eurogold on theacquisition of further specified interests in Ukrainian mining projects. The Soviet classified reserves of the Saulyak deposit as approved by theUkrainian Government in 2003 and subsequently independently audited, along withthe Soviet classified P1 exploration potential are tabulated below: Class Mt g/t (Au) T (Au) Oz (Au) C1 0.74 8.0 5.9 189,000 C2 1.40 8.6 12.1 389,000 C1+C2 2.14 8.4 18.0 578,000 P1 9.96 7.6 75.7 2,433,809 Eurogold has recently reported on its current drilling programme. A total of 43drillholes totalling 1,145 metres has now been completed out of a plannedprogramme of 94 holes totalling 4,800 metres. According to Eurogold 30 holeswere assayed and 27 drillhole intersections are tabulated below, the results ofwhich are consistent with expectations and confirm the presence of robust"economic" mineralization in No. 1 Orebody. Drillhole From To Interval Gold Grade Core No. (m) (m) (m) (g/t) Recovery % 583 10.47 15.45 4.98 3.59 92 583A 7.22 14.30 7.08 5.58 90 584 5.58 14.40 8.82 7.88 85 585 13.60 15.85 2.25 3.54 96 608 15.37 17.39 2.02 10.05 88 586 14.93 19.68 4.75 2.28 65 738 5.25 6.87 1.62 6.59 81 736 2.58 4.65 2.07 5.71 88 734 5.62 7.40 1.78 1.92 74 922 21.49 26.09 4.60 13.77 76 922 21.49 29.40 7.91 8.69 67 823 25.83 31.23 5.40 2.59 96 853 14.50 16.11 1.61 2.11 84 924 16.09 19.16 3.07 10.29 59 852 3.81 6.36 2.55 1.43 87 848 10.26 13.32 3.06 1.75 76 848 23.93 26.00 2.07 2.85 89 847 8.43 11.52 3.09 2.23 82 926 0.00 4.88 4.88 2.78 69 767 4.21 13.26 9.05 4.80 95 850 9.61 11.65 2.04 3.34 66 592 0.50 4.76 4.26 10.17 98 592 0.50 11.62 11.12 5.40 97 851 5.66 12.33 6.67 5.05 99 925 1.62 4.10 2.48 4.93 100 927 1.85 3.27 1.42 8.90 69 931 0.92 5.12 4.20 3.12 81 Significant potential exists both down dip and along strike of the existing mineand it is the intention of Oxus to fully evaluate the potential of the areaswhich host much of the P1 category mineralisation. In addition, Oxus willconvert the existing resources and reserves from the "Soviet" classification tothat of JORC. An exploration licence covering 276km2 covering the regionsurrounding Saulyak has been applied for. Bill Trew, CEO of Oxus, stated "We are delighted that we have finally reachedagreement on the acquisition of certain of Eurogold's assets. These assetscomplement our portfolio in Central Asia and represent a further significantstep in our overall development strategy." All of the mineral resources or ore reserves in this report are based oninformation complied by Mr Simon Pepper who is a recognised mining professionalon the basis that he holds a MSc Mining Geology from Camborne School of Mines,has at least five years experience in the estimation, assessment and evaluationof the type of mineral resources or ore reserves in this report and is a memberof the Institute of Materials, Minerals and Mining in the United Kingdom. For further information, please contact: Oxus Gold plcRichard Wilkins, Company Secretary Tel: + 44 (0) 20 7907 2000 Bankside Consultants Ltd.Keith Irons/Oliver Winters Tel: + 44 (0) 20 7367 8873 This information is provided by RNS The company news service from the London Stock Exchange