Further re Sale Agreement

3 Jul 2006 07:00

Eurogold Limited03 July 2006 EUROGOLD L I M I T E D (ACN 009 070 384) ASX ANNOUNCEMENT 3 July 2006 ASX & AIM Symbol "EUG" Termination of Sale Agreement with Oxus Gold plc On 1 May 2006 the Eurogold Limited (the "Company") announced that it had soldits Saulyak project in the Ukraine and exploration licences in Romania to OxusGold plc ("Oxus"). The sale was subject to shareholder approval, which wasobtained on 15 June 2006. Settlement, which involved consideration of approximately A$22,000,000 was dueto take place on Friday 30 June 2006. On 29 June 2006 by notice Oxus terminated the sale on the basis that there hadbeen a material adverse change in the financial position and assets of Eurogoldgroup since 30 April 2006 being the date of execution of the Asset SaleAgreement. The notice of termination refers to, amongst other things, thestanding of the Saulyak licence in the Ukraine. Eurogold disputes that Oxus wasentitled 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. Peter GunzburgExecutive ChairmanEurogold Limited This information is provided by RNS The company news service from the London Stock Exchange