Oxus buoyed by Uzbek operations

Despite difficulties at its Kyrgyz development project, London-based Oxus Gold (oxusf-o, oxs-l) has been buoyed by operating success at its Amantaytau gold operations in Uzbekistan.

Oxus reported earnings of US$3.8 million on revenues of US$6.9 million (US$1.31 per share) in the six months ended Dec. 31. That compared with a US$3-million profit on revenues of US$5.5 million in the second half of 2004. (The company’s financial year-end is June 30.)

Amantaytau Goldfields, the joint venture with the Uzbek government in which Oxus holds a 50% interest, booked an operating profit of US$9 million in the 6-month period. Oxus accounts for its share of that profit — US$4.5 million — as revenue. In the last half of 2004, Amantaytau made US$4.2 million, and for the whole of 2005, Amantaytau cleared US$13.3 million.

In 2005 Amantaytau mined 1.6 million tonnes and processed 1.5 million, grading 4.3 grams gold per tonne, to produce 161,615 oz. gold. Production was higher than in 2004, when Amantaytau produced 148,511 oz. gold from 1 million tonnes of ore grading 5.8 grams per tonne.

The higher production came entirely from the greater throughput; both head grade and recoveries declined in 2005, the latter to 77% from 83% the year before.

Oxus has also brought a second orebody into development at Amantaytau, the Vysokovoltnoye deposit. Vysokovoltnoye is an open-pit and heap-leach operation with reserves of 1.7 million tonnes grading 127 grams silver and 1.1 grams gold per tonne.

So far, Vysokovoltnoye has produced only from test pads, but the main leach pads are now being stacked and leaching and gold recovery was scheduled to start in March.

Test mining on the underground orebody at Amantaytau was also scheduled to start in March, for detailed metallurgical test work. Oxus is having a plant designed for the sulphide project, and arranging permitting with the Uzbek government.

The sulphide project exploits two zones, Central and North, which have combined reserves of 9.7 million tonnes grading 7.8 grams gold per tonne (based on a 3.5-gram cutoff grade). There is a total mineral resource, including the reserve, of 17.8 million tonnes grading 6.8 grams per tonne.

About 10 km southwest of Amantaytau, three deposits — Asaukak, Aksai, and Northern Asaukak — were drilled in late 2005. At Asaukak, a new resource calculation is under way. Drilling there intersected 10.4 grams gold per tonne over 5 metres and 5.3 grams over 20 metres, all near surface.

Further drilling is planned on the other two prospects, where drilling encountered grades similar to Soviet-era resource estimates, around 4 grams per tonne. Aksai shows a mineralized strike length of 350 metres and Northern Asaukak, 500 metres.

Oxus has US$18.5 million in cash and receivables, against current liabilities of US$9.1 million.

Oxus has had no further news on the status of the Jerooy project in Kyrgyzstan, where the government revoked its development licence at the end of 2005. Some reports from Kyrgyzstan say the company and state agency Kyrgyzaltyn are in negotiations, possibly for a larger share for Kyrgyzaltyn. Jerooy workers, off work since the project was suspended early in the year, protested the lack of progress in front of the President’s offices in Bishkek in late March.

There have also been no further announcements from Central Asia Gold (cga-t, cgxaf-o) on its dispute with Kyrgyzaltyn over a joint-venture agreement on the Taldy Bulak gold deposit. Kyrgyzaltyn had served notice it was withdrawing from the joint venture, on the grounds that Central Asia Gold had not met the timetable for development of the project. Central Asia countered that Kyrgyzaltyn had already agreed to the variations to the schedule in an October 2004 agreement.

A report from the Kyrgyz news agency AKI said that Kyrgyzaltyn had signed a new agreement with a Kazakh company, Summer Gold, on Taldy Bulak. Central Asia says the joint-venture agreement can be taken to an international arbitration panel if the dispute cannot be resolved.