Eurogold Settlement

19 Feb 2008 07:01

Oxus Gold PLC19 February 2008 OXUS GOLD PLC Eurogold Settlement LONDON: 19 February 2008 - Oxus Gold plc ("Oxus" or the "Company") announcesthat further to its announcement on 24 August 2006, it has reached agreementwith Eurogold Limited ("Eurogold") and its wholly owned subsidiary EurogoldHoldings ("Bermuda") Limited ("EHBL") to settle the proceedings commenced in2006 by Eurogold and EHBL. The proceedings were commenced following Oxus' decision to terminate itspurchase agreement with Eurogold for its Ukrainian gold assets. As previouslydisclosed, Oxus believed, at termination, that a material adverse change hadoccurred to the business and assets of EHBL from what it understood the positionto be when it entered into the agreement. Richard Wilkins, Chief Executive of Oxus Gold, commented: "Without accepting anyliability, Oxus believes it is in the best interest of shareholders to settlethe dispute at this time. This will enable the Company to focus all of itsresources on its core assets and capitalise on recent encouraging progress madeby the Company, as demonstrated by the receipt of formal approval by theGovernment of Uzbekistan to proceed with the AGF phase 2 underground sulphideproject, as previously announced on 6 December 2007, and which is expected toincrease AGF's total production to over 300,000 ounces per annum within threeyears. Weighed against the potential time, costs and disruptions of contesting a courtcase in Australia, coupled with the likelihood of limited recovery ofsignificant costs in the event of a favourable court decision, Oxus firmlybelieves management time should be focussed on utilising its experience andexpertise to enable the Company to bring the sulphides project into productionas soon as possible." Under the terms of the settlement , Oxus has agreed to pay Eurogold A$7.95m ofwhich approximately A$6.78m will be cash and the balance of approximatelyA$1.17m will be met through the issue of 1,904,297 Oxus shares, delivered toEurogold on or before 21 May 2008. The cash component consists of A$5.06mpayable on or before 31 March 2008 and A$1.72m pursuant to the sale of theCompany's entire shareholding in Eurogold of 43,188,100 shares. Oxus confirmsthat on 18 February 2008, it sold these shares at a price of A$0.04 per share,realising approximately A$1.72m, which will be paid to Eurogold on or before 6May 2008. Oxus confirms US$6.474m will be provided in the Interim Accounts to 31 December2007 in respect of this settlement. Contacts: Oxus Gold plcRichard Wilkins Tel: +44 (0)20 7907 2000Jonathan Kipps Canaccord Adams LimitedMike JonesRobin Birchall Tel: +44 (0)20 7050 6500 Bankside Consultants LimitedKeith Irons Tel: +44 (0)20 7367 8873Oliver Winters This information is provided by RNS The company news service from the London Stock Exchange