LONDON: Thursday, 05 January 2006 – Oxus Gold plc (“Oxus” or “the Company”) is aware of various conflicting press articles that have appeared recently, mainly in the Russian press.

The general political situation in the Kyrgyz Republic is still in a transitional phase as the new Government and President attempt to establish their new policies and to seek the appropriate endorsement from Parliament for such policies. The Jerooy project is currently the focus of considerable discussion within Government, the President’s Office and Parliament.

The Company is aware of a Kyrgyz Government Order dated 28 December 2005 and published on 4 January 2006 “On Accelerating Development of the Jerooy Gold Deposit”. This order instructs various state bodies to review the work of Talas Gold Mining Company (“TGMC”) to date and to consider proposals apparently received from other potential investors. The Company is confident that the conclusion of this review will be to reinstate the licence to TGMC, given that the processing plant is already at an advanced stage of completion, the mining fleet is already on site, and only TGMC is in a position to commence gold production at Jerooy during the first half of this year.

The Company believes that there is a clear majority in favour of reinstatement of the Jerooy licence to TGMC, although the Company is also aware that there are certain factions that appear not to be in support of reinstatement. TGMC also has the overwhelming support of the local Talas community. The Company confirms that constructive dialogue regarding the Jerooy licence continues with the Government and its representatives, and considers the recent press articles to be a combination of negotiating tactics and the efforts of those who may be linked to other potential investors and thereby stand to gain from the licence not being reinstated.

The Company also notes that on 28 December 2005 a Kyrgyz Parliamentary Committee concluded that failure to reinstate the Jerooy licence to TGMC would represent an act of unlawful expropriation, a view shared by the Company’s international legal counsel. It is stated in the Committee’s decision that failure to reinstate would violate the Law of the Kyrgyz Republic “On Investment in Kyrgyzstan”, and the bi-lateral intergovernmental Agreement between the United Kingdom of Great Britain and Northern Ireland and the Kyrgyz Republic on the protection and encouragement of investments, and also norms of International Law.

Oxus confirms that construction is continuing on site, as requested by the President, that approximately $46 million has been spent on the project to date, that TGMC has not been asked at any time to stop construction, and the Company looks forward to the licence reinstatement being satisfactorily resolved in due course to ensure that the accelerated development of the project may continue. The Company notes that revenue from the Jerooy project has been included in the Government’s economic forecasts for 2006 and, it is understood, agreed with the International Monetary Fund and other international lending bodies. Without constructive co-operation with TGMC, this revenue is likely to be delayed for a number of years.

END

Contacts:

Oxus Gold plc

Tel: + 44 (0)20 7907 2000
Richard Wilkins, Company Secretary
Joanna Solino, Investor Relations Officer

Bankside Consultants Ltd.

Tel: + 44 (0)20 7367 8873
Keith Irons