Oxus Gold divests Kyrgyz project (March 12, 2007)

Oxus Gold (OXS-L) has sold its interest in the operating company that had developed the Jerooy gold deposit in Kyrgyzstan, as part of a transaction with another London-listed junior, KazakhGold Group (KZG-L).

Oxus sells its interest in Talas Gold Mining, which had held the Jerooy project until the Kyrgyz government lifted Oxus’s development licence in late 2005. It also transfers Oxus’s half of a Romanian joint venture with KazakhGold, and several Turkish properties owned by a public subsidiary, Marakand Minerals (MKD-L). The Marakand transaction requires the approval of Marakand’s board of directors.

In exchange, Oxus gets 3.5 million shares of KazakhGold, worth about US$72 million at market prices; the shareholding represents about 7% of KazakhGold. If KazakhGold can recover development rights to Jerooy, Oxus receives payments of up to US$80 million in later installments.

Oxus said it would distribute “all or a large portion” of the KazakhGold shares to its shareholders.