Oxus Gold Plc

Oxus Gold Plc

Oxus Gold plc (OXS) - announces Positive Bankable Feasibility Study for Amantaytau Goldfields Underground Sulphide Project in Uzbekistan

Oxus Gold plc, the Uzbekistan gold and silver producer, today announces the results of a Bankable Feasibility Study compiled by Wardell Armstrong International on its Underground Sulphide Project at its 50% owned Amantaytau Goldfields Joint Venture.

Highlights
• Development of a 1.2mtpa underground gold mine and process plant based on the current reserves at the Severny and Centralny ore deposits is technically and commercially feasible
• The Project will exploit a reserve of 1.74Moz within a resource of 2.99Moz, over an initial 7 year life at the Sulphide Project, producing up to 270,000 oz gold per annum
• Significant upside potential for extended life and increased reserves as the deposit is open-ended at depth with indications of occurrence of high grade mineralisation
• Further geotechnical work is planned prior to underground development in order to investigate the use of lower cost mining methods than the currently planned cut and fill stoping
• Total costs are an average of US$ 402 per oz gold  produced over the initial 7 year life of mine, including operating taxes, royalties and management fees: the Project is in the midrange on the cost curve of gold producers and is regarded as very robust with potential for further improvement
• Ungeared after tax NPV for the Project is US$ 329 million at 7% discount rate per annum, the IRR is 50% and the payback is 24 months from start of production, anticipated in Q3 2009
• The Project is an extension and expansion of the existing and ongoing oxide production of approximately 70,000 oz gold equivalent per annum and therefore benefits from the existing infrastructure, existing skilled labour force and management’s experience of operating in the area
• The Royal Bank of Scotland plc (RBS) has been appointed as lead arranger for a limited recourse senior debt facility.  Oxus anticipates 100% debt funding for the Project, thereby eliminating shareholder dilution: RBS has received the BFS and is reviewing it as part of its due diligence ahead of loan documentation

Speaking today, Chief Executive Officer Mr Richard Wilkins said,
“In light of these robust financial indicators, Amantaytau Goldfields is proceeding with the Project implementation including the commencement of purchasing long-lead items, and start-up of initial site works. Commissioning of the plant is expected by Q3 2009 with a production level of 750,000tpa, increasing to 1.2mtpa by mid 2010.  200,000oz of gold will be produced in 2010 and 270,000oz in 2011. Since receiving Cabinet of Ministers approval to proceed with the Project last December I am delighted with the progress that we have subsequently made including the completion of this Bankable Feasibility Study.  With first sulphide production forecast for Q3 2009, Oxus is poised to quadruple its production over the next 3 years and transform itself from a junior mining company into a mid-tier producer.”

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