The following statement has been released by Oxus Gold and is issued in London by Bankside Consultants on behalf of the Company.

 

"Favourable economics" for new mine
Independent audit completed and new drilling underway

 

LONDON: 29 August, 2001- Oxus Gold plc, ("Oxus" or "the Company") (OXS.L) the British mining group with interests in Central Asia, is making good progress towards bringing its first gold mine into production.

 

Barclays Capital commissioned leading geological and mining consultants, SRK Consulting Engineers ("SRK"), to carry out a detailed audit of the bankable feasibility study on the Amantaytau Goldfields ("AGF") project as part of its mandate to advise Oxus in securing the project finance. The one million tonne-a-year open pit heap leach operation is ready for construction subject to project finance.

 

SRK has completed its audit and has confirmed the published reserves and resources for the open pit heap leach gold mine and indicates that there is considerable potential for additional resources. SRK also confirm that a production rate of one million tonnes of ore a year for this first mine is achievable and that gold and silver production over the nine-year mine life should total 637,500oz and 6,624,000oz respectively. SRK estimates the initial capital cost to be US$35.8 million and state that the ten-month construction schedule is reasonable and achievable. Cash operating costs are estimated at $113 an ounce and on an all equity basis and at a gold price of US$260 per ounce, the project has a payback period of 1.6 years with a 42.8% internal rate of return. SRK have concluded: "For a new gold project in the current price environment, these are very favourable economics".

 

Production start-up is planned for late next year with first full year production expected to be around 170,000 ounces of gold.

 

The second phase of the Amantaytau project is the development of an underground gold mine. The preliminary feasibility study on this mine has been completed and has been designed to produce an average 190,000 ounces of gold a year over a 10-year mine life at an average cash cost of $115 an ounce. Total output from the combined open pit and underground operations is expected to be 2.6 million ounces of gold and 6.6 million ounces of silver over the 14-year mine life based on the existing mineable reserves.

 

SRK has now been appointed to carry out new calculations on these underground and other open pit resources within the AGF property. Oxus has started a major new drilling programme to upgrade existing, and investigate potential new, gold and silver resources and reserves within the 192 square kilometre AGF licence area in which there are a total of 18 known gold and silver deposits.

 

Following its debut on London's Alternative Investment Market (AIM) in June, Oxus acquired exploration rights over two other prospective gold licences in the Kyzylkum Region of Uzbekistan close to its AGF properties, which have gold resources of a further 650,000 ounces. A drilling programme is scheduled on this property following an audit of the existing resources currently in progress by CSMA Consultants Limited.

 

Exploration on these areas will be carried out with the intention of increasing the existing heap-leaching mineable reserves and increasing the reserves for the second stage underground mine development.

 

Excluding these new areas Oxus has attributable resources of 6.5 million ounces of gold and 81 million ounces of silver in AGF. AGF currently has total mineable reserves of 3.0 million ounces of gold and 9.2 million ounces of silver and Oxus has a 50% interest in the company and management control of its projects.

 

Note:

 

Trading in the shares of Oxus Gold began on the London Stock Exchange's Alternative Investment Market (AIM) on July 4 2001 when the Company raised £8 million through a placing of 26.6 million shares at 30p per share to institutional and other investors. Following the placing, significant shareholders include Normandy Mining (20.56%), Capital International Group (7.32%), Lonmin plc (6.14%), Invesco Asset Management (5.36%), Equitable Life (4.36%) and CIBC World Markets (2.6%). Directors, management and employees own a further 14%.

 

The Oxus Group is led by Chief Executive Roger Turner, who has more than 35 years of mining experience, and Richard Wilkins (Commercial Director), an accountant with extensive experience in Central Asia. Other directors are Charles Cooper (None-executive Chairman), Michael de Villiers (Finance Director), Guido Pas, Anthony Warrender and Mark Wellesley-Wood (non-executive directors). The Group has a team of qualified geologists, mining, metallurgical and civil engineers based in Uzbekistan and Kyrgyzstan who are supported by regional offices in Tashkent and Bishkek.

 

END

 

Contacts:

 

Oxus Gold
Roger Turner, CEO
Tel: +44 (0)1483 714 411 / +44 (0)7768 291 546

 

Oxus Gold
Richard Wilkins, Executive Director
Tel: +44 (0)1483 714 411 / +44 (0)7979 854 950

 

Oxus Gold
Michael de Villiers, Finance Director
Tel: +44 (0)1483 714 411 / +44 (0)7899 917 096

 

Old Mutual Securities, London
Rod Venables
Tel: +44 (0)20 7002 4614 / 4620

 

Old Mutual Securities, London
Gareth Hughes
Tel: +44 (0)20 7002 4610 / 4601

 

Bankside Consultants Ltd, London
Keith Irons
Tel: +44 (0)20 7220 7477 / +44 (0)7885 356 639

 

Website: www.oxusminingplc.com