KazakhGold to Acquire Oxus Gold Assets


The Jerooy gold mine process plant, shown
here during construction in mid-2006, is part
of a stock and cash deal by KazakhGold
Group to acquire certain Oxus Gold assets
in Kyrgyzstan and elsewhere.
U.K-based Oxus Gold and KazakhGold Group Ltd. announced an agreement by which KazakhGold will acquire certain of Oxus’ assets, subject to contract. These assets include the entire issued share capital of Norox Mining Co. Ltd. which, via its 66.67% holding in the Talas Gold Mining Co., owns the substantially completed gold processing plant at the site of the Jerooy gold project in Talas, Kyrgyzstan; the remaining 50% of the issued share capital of Romaltyn Ltd., which KazakhGold acquired jointly with Oxus in November 2006; and certain exploration assets in Turkey, currently owned by Oxus’ 86%- owned subsidiary, Marakand Minerals Ltd., subject to board approval from Marakand. The proposed acquisition is subject to a number of conditions, including completion of satisfactory due diligence, the receipt of independent valuations of the assets which is satisfactory to the board of KazakhGold, the receipt of all necessary regulatory ap-provals and consents and subject to completion of a legally binding agreement. In consideration for these assets, KazakhGold proposes to issue, upon completion, up to a maximum of 3,541,666 new shares to Oxus, representing approximately 7% of the enlarged share capital of KazakhGold following the issue of the consideration shares. The number of shares issued as consideration will be subject to adjustment if any of the assets above are not transferred to KazakhGold. The consideration, i.e. number of shares, will not be subject to adjustment to reflect fluctuations in the KazakhGold share price Additionally, KazakhGold has agreed in principle to pay Oxus up to a further $80 million in cash in installments, if it is awarded the license at Jerooy and commences development and production at the deposit. The payment is conditional on Oxus ceasing its ongoing litigation regarding the Jerooy license.