Regional Court Ruling

27 Oct 2006 08:56

Oxus Gold PLC27 October 2006 Regional Court Ruling LONDON: 27 October 2006 - Oxus Gold plc ("Oxus" or the "Company") (OXS.L)announces that the Regional Economic Court of the Navoi province in Uzbekistanissued a ruling against Amantaytau Goldfields ("AGF"), Oxus' subsidiary inUzbekistan, on 26 October 2006 claiming taxes of $15.3 million relating to theperiod of 1 January 2003 to 31 December 2005, plus related fines and penaltiesequivalent to $4.9 million. This amount includes $7.1 million of recoverableVAT. AGF is 50% owned by Oxus Gold and 50% by the Uzbek State. In addition, the ruling also claims $203.6 million in respect of allegedtransgressions during the same period relating to the operation of AGF'soverseas foreign currency bank account. The ruling becomes effective after 30days unless overturned. AGF is appealing the majority of this ruling. AGF hasbeen led to believe that any liabilities resulting from the rulings will bepayable pursuant to a reasonable payment schedule. AGF believes it was exempt from the majority of taxes claimed under the ruling.AGF also maintains that it was authorised by decree of the Cabinet of Ministersto operate an overseas bank account and that such operations were conductedlegitimately and with the full knowledge of the relevant Uzbek authorities,including the Ministry of Finance and the Central Bank, to which AGF regularlysubmitted the required reports. On 10 October 2006 the Company announced that AGF has provided for $2.6 millionin taxes and was negotiating in respect of a further $7 million of withholdingtaxes on subcontracting invoices and custom duties, plus various fines andpenalties. Notwithstanding the above, AGF continues to operate and senior officials of AGFand Oxus continue discussions with the Uzbek Government to resolve these issues. Shareholders will be kept informed of all developments on a timely basis. Further enquiries: Oxus Gold plc Tel: + 44 (0)20 7907 2000Richard Wilkins, Company Secretary Bankside Tel: + 44 (0)20 7367 8873Keith IronsOliver Winters This information is provided by RNS The company news service from the London Stock Exchange