AGF Update

10 May 2007 15:58

Oxus Gold PLC10 May 2007 news release For immediate release: 10 May 2007 OXUS GOLD PLC Amantaytau Goldfields granted tax deferral program LONDON: 10 May 2007 - Oxus Gold plc ("Oxus" or the "Company") (OXS.L) is pleasedto announce that the Government of Uzbekistan has granted tax deferrals to theAmantaytau Goldfields ("AGF") Phase I Oxides Project. As announced, in June 2006 the Uzbek Government introduced decrees that removedthe tax privileges previously granted to AGF and other companies. Simultaneouslya special committee was established by the Government to review the impact ofthese measures on a project by project basis. As a result of this review, for aperiod of 18 months with effect from 1 May 2007, AGF has been granted a deferralof payment of property tax and withholding tax, as well as customs duties onimported goods and equipment. The deferred taxes and duties will become payablein 6 monthly instalments starting from 1 November 2008. This liability will befinanced as part of the capital cost of the Phase II Sulphides Project. The estimated cash saving to AGF during this 18 month period will beapproximately US$970,000 per month, or just over US$17 million. AGF is also in the process of agreeing a new mechanism for recovering VAT paid,including an offset against various taxes currently payable. As a result,restrictions previously imposed on AGF's bank accounts have been largelyreduced, and are expected to be removed altogether as these discussions arefinalised. Bill Trew, CEO of Oxus, commented "The deferral of these taxes will have asignificant impact on AGF's current oxide operations, and we now have everyincentive to move the sulphides project forward as quickly as possible. Wecontinue to assess the viability of a sulphide open pit as an extension to theexisting Centralny oxide pit with a view to accelerating production from thesulphides and reducing initial capital costs. We are also extremely encouragedby the recent metallurgical testwork which has shown 95% recoveries from ultrafine grinding and flotation as an alternative to biological oxidation, and weshall be following this up as a priority. The Uzbek Government has given usclear instructions to speed up the sulphides project and, all going well, wewould hope to have first production from a sulphide open pit by the end of nextyear." The sulphides project is designed to mine the deeper sulphide extensions to theoxide ore bodies currently being mined by open pit methods at Centralny and alsoto mine the underground Severny ores. Combined they contain ore reserves of 9.71million tonnes at an average grade of 7.71 grammes per tonne (g/t) containing2.41 million ounces of gold, within a mineral resource of 12.4 million tonnes atan average grade of 8.7 g/t and containing 3.5 million ounces of gold at acut-off grade of 3.5 g/t gold. The total mineral resource is 17.73 milliontonnes at an average grade of 6.84 g/t containing 3.9 million ounces of gold atzero cut-off grade. The resource is open at depth and Soviet drilling 500 metresbelow the currently explored ore bodies encountered 51.6 g/t gold over 8 metres. END Contacts: Oxus Gold plcRichard Wilkins Tel: +44 (0)20 7907 2000website: www.Oxusgold.co.uk Canaccord Adams Limited Mike Jones Tel: +44 (0) 7050 6755Erin Needra Bankside Consultants Ltd. Keith Irons Tel: +44 (0)20 7367 8873Oliver Winters This information is provided by RNS The company news service from the London Stock Exchange