Oxus Mining plc (“Oxus” or “the Company”) (OXS.L) announces that on 5 August 2002, the Kyrgyz Government adopted a resolution “On Measures for the Acceleration of the Development of the Jerooy Gold Deposit” and instructed the State Committee for State Property and Direct Investment to search for an investor capable of quick development of the Jerooy deposit and to make proposals for the development of the Jerooy deposit for consideration by the Kyrgyz Government. This follows the publication, in June 2002, by the Government of an annulment of the mining licence issued to Talas Gold, citing delays in completion of the feasibility study and site development. Talas Gold is 67% owned by Oxus’ 93% owned subsidiary, Norox Mining Company Limited (“Norox”), and 33% owned by Kyrgyzaltyn, the State owned mining company. As previously announced, Norox has disputed the annulment on the following grounds:

-The completion of the feasibility study was dependent upon the introduction of various tax privileges, which have not been forthcoming;

-This, combined with the historically low gold prices, resulted in the delayed development;

-Under such circumstances, the Joint Venture Agreement signed between Norox and Kyrgyzaltyn in September 1998, and which created Talas Gold, provided that Norox as under no obligation to complete the feasibility study.

Norox was, however, working to complete a feasibility study by 30 September 2002, in accordance with a work programme agreed by the shareholders of Talas Gold at a general meeting in May 2002. Pursuant to this programme, the Audited Mining and Development Report had been completed by Wardell Armstrong, as reported on 9 July. This report confirmed a mineable reserve for the open pit of 1.3 million ounces and an underground resource of 0.68 million ounces of gold. The report proposed an open pit followed by an underground mine. Wardell Armstrong has also finalised the open pit and underground mine design, optimised the production rate and mine production schedules, finalized the process plant design, completed paste test work and design and evaluated various tailings disposal options. The financial aspects of the study, including the capital and operating costs, remain to be completed.

Under the circumstances, however, Norox has ceased any further work on the Jerooy project until these issues are resolved, and in a letter dated 15 August 2002, has informed the Kyrgyz authorities that the feasibility study, due for completion in September, will not be delivered to Kyrgyzaltyn nor to the Government. Norox continues to seek an amicable resolution to this matter by way of good faith negotiations in accordance with the terms of the Joint Venture Agreement. Kyrgyzaltyn has confirmed its willingness to participate in such negotiations, and the parties have agreed a deadline of 19 October 2002 to conclude such negotiations. If a mutually acceptable agreement is not reached by 19 October, then Norox will commence proceedings to seek a resolution under international arbitration.

The Board of Oxus would like to remind investors that these developments in no way impact its Amantaytau gold project in Uzbekistan. Oxus remains fully focussed on Amantaytau, where it aims to draw down on the committed loan facilities to Amantaytau and Oxus and commence construction of the Phase I open pit heap leach operation in early September.

Roger Turner, Chief Executive of Oxus, said today: “We are most disappointed with the approach taken by the Kyrgyz authorities; however, we continue to negotiate in good faith to seek an amicable solution. We still believe that Jerooy is a first class gold deposit.”

END

About Oxus Mining
Oxus Mining is an exploration and development company operating principally in Uzbekistan. The Company’s focus is on the Tien Shan Gold Belt and, in particular, in the Amantaytau region where its licence areas encompass 882 square kilometres just 30 kilometres from Muruntau, one of the world’s largest open pit gold mines, currently producing 1.8 million ounces of gold per annum.

In total, Oxus’ projects at Amantaytau have gold reserves of 3.03 million ounces, resources of 6.74 million ounces and further exploration results of 12.5 million ounces. Oxus has a 50% interest in these projects.

The most advanced project is Amantaytau Phase 1, a 1 million ounce gold open pit heap leach project. Oxus expects to commence construction of the $41.35 million project during Q3 2002, with a view to pouring first gold in mid 2003. The first year’s production is estimated to be 175,000 ounces at a cash cost of under $100/oz gold. The project’s life of mine cash operating costs are estimated at $118/oz with ungeared total costs of $208/oz.

On 16 August 2002, Oxus received an underwritten subordinated insured loan offer of $23 million from Société Générale which completed the financing requirement for the construction of Phase 1. This followed on from the project finance facility obtained, also from Société Générale, on 17 July 2002.

The Tien Shan Gold Belt represents the second largest gold province in the world after South Africa’s Witwatersrand Basin, containing over 400 million ounces of gold in reserves and historic production. Oxus has exploration rights to a further 2,000 square kilometres on the Belt.

Contacts:

Oxus Mining
Tel: +44 (0) 1483 714 411
Roger Tuner, CEO
Sacha Borthwick, VP Corporate Development

Brown Shipley Corporate Finance
Tel: +44 (0) 20 7606 9833
Bill Staple

College Hill
Tel: +44 (0) 20 7457 2020
Archie Berens

Website: www.oxusminingplc.com
Email: oxus@oxus.demon.co.uk