Oxus Gold hopes to use proceeds from the sale of equity to a Chinese consortium to help develop a new underground mining operation at the AGF project in Uzbekistan.
In early 2010 Oxus signed a conditional agreement with a consortium of Chinese investors comprising of Baiyin Non-Ferrous Group Co, CITIC Construction Co, and Chang Xin Yuan Su (Tianjin) Equity Investment Fund Management LP to invest and arrange financing.
The agreement involved sale of equity for around $85 million which would then allow Oxus to unlock $100 million of agreed loan finance for the Uzbekistan project, however the agreement was conditional on the signing of a Foreign Investment Agreement (FIA) with the Uzbekistan Government by June 30, 2010, receipt of the customary approvals from the Government of the People's Republic of China and admission of the new Ordinary Shares to trading on AIM by December 31, 2010.
In 8 June an amendment to the agreement was signed which has removed the signing of the FIA as a condition to the financing. Accordingly, upon receipt of the relevant Chinese Government approvals, the consortium will make the initial investment of about $85 million by way of the issue of new ordinary shares and convertible loan notes in the company.
The $100 million of loans will not be taken until the Uzbekistan Government agrees to the inward investment of these funds in the AGF joint venture in which the Uzbek government is a part.
Oxus says these developments are a major step forward in its progress and development strategy.
The funds may also be used by the Oxus team to invest in other gold projects in the wider region, which could lead to the expansion and development of a number of additional projects where management may apply their expertise and skills from the company’s newly formed partnership with the Baiyin CITIC consortium.
www.oxusgold.co.uk

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