Tashkent time is - 
08 January 2010
08:31 -
Oxus Gold secures US$185 mln financing from Chinese consortium for gold project in Uzbekistan
Oxus Gold (AIM: OXS) has entered into conditional agreements with a consortium of Chinese investors to invest and arrange financing of a total aggregate amount of US$185 million to help develop the company's gold project in Uzbekistan and increase production to 0.3 Moz (million ounces) of gold annually after 2011.
Under the terms of the financing, members of the concert party will make an investment in Oxus of US$85 million through an issue of new ordinary shares and convertible loan notes and will be granted warrants to subscribe for new shares in the company for US$20 million in return for an undertaking to arrange a further minimum of US$80 million in project finance.
The planned programme on the company’s 50% owned Amantaytau Goldfields joint venture (JV) in Uzbekistan will include the expansion of its existing open pit heap leach mining operations, the development of one of more underground mines and accelerated exploration. The Uzbek government controls the remaining 50 percent.
The proceeds are expected to allow AGF to target first production at the project for the middle of 2011 and an increase in annual production to 0.3 Moz.
The concert party consists of Baiyin Non-Ferrous Group Co Ltd, CITIC Construction Co Ltd and Chang Xin Yuan Su Equity Investment Fund Management LP. Baiyin and CITIC are ultimately owned and controlled by the government of the People's Republic of China. Chang Xin is a private equity fund registered in the People's Republic of China and managed by Long March Investment Consulting.
The members of the party will subscribe to 573 million shares in Oxus at 6 pence each, which will represent a 59.7% shareholding in the company.
“Oxus will also be able to draw on the concert party's extensive technical expertise and we very much look forward to working with them. All parties will now focus on obtaining the relevant governmental agreements and approvals as soon as possible, and we continue to target 2011 for first gold production from the underground mine at AGF,” said Oxus chairman Richard Shead.
Oxus has also obtained agreement from its convertible loan note holders to amend the terms of the existing US$18.5 million 8% unsecured loan notes, due May 2010 and convertible at 37 pence per share, to include an extension to the final repayment date to May 2013, a new interest rate of 3% above six month LIBOR (London Interbank Offered Rate), and new conversion terms which allow the existing convertible loan notes to be converted at 12p per share into 96.35 million new shares.
Oxus Gold has an unofficial in-house estimate of 24 million ounces of gold and almost 500 million ounces of silver for the total Amantaytau resource.
The mine plan for the project envisages gold production of 100,000 ounces per annum over 12 years. Total cash costs are expected to be approximately US$377 per ounce of gold produced, including royalties and operating taxes. Ungeared NPV for the project is US$103.7 million at a 7% discount rate per annum, the IRR is 34.8% and the payback is 30 months from the start of production. The ore will be processed using bio-oxidation technology provided by GoldFields. // Proactive Investors UK
Under the terms of the financing, members of the concert party will make an investment in Oxus of US$85 million through an issue of new ordinary shares and convertible loan notes and will be granted warrants to subscribe for new shares in the company for US$20 million in return for an undertaking to arrange a further minimum of US$80 million in project finance.
The planned programme on the company’s 50% owned Amantaytau Goldfields joint venture (JV) in Uzbekistan will include the expansion of its existing open pit heap leach mining operations, the development of one of more underground mines and accelerated exploration. The Uzbek government controls the remaining 50 percent.
The proceeds are expected to allow AGF to target first production at the project for the middle of 2011 and an increase in annual production to 0.3 Moz.
The concert party consists of Baiyin Non-Ferrous Group Co Ltd, CITIC Construction Co Ltd and Chang Xin Yuan Su Equity Investment Fund Management LP. Baiyin and CITIC are ultimately owned and controlled by the government of the People's Republic of China. Chang Xin is a private equity fund registered in the People's Republic of China and managed by Long March Investment Consulting.
The members of the party will subscribe to 573 million shares in Oxus at 6 pence each, which will represent a 59.7% shareholding in the company.
“Oxus will also be able to draw on the concert party's extensive technical expertise and we very much look forward to working with them. All parties will now focus on obtaining the relevant governmental agreements and approvals as soon as possible, and we continue to target 2011 for first gold production from the underground mine at AGF,” said Oxus chairman Richard Shead.
Oxus has also obtained agreement from its convertible loan note holders to amend the terms of the existing US$18.5 million 8% unsecured loan notes, due May 2010 and convertible at 37 pence per share, to include an extension to the final repayment date to May 2013, a new interest rate of 3% above six month LIBOR (London Interbank Offered Rate), and new conversion terms which allow the existing convertible loan notes to be converted at 12p per share into 96.35 million new shares.
Oxus Gold has an unofficial in-house estimate of 24 million ounces of gold and almost 500 million ounces of silver for the total Amantaytau resource.
The mine plan for the project envisages gold production of 100,000 ounces per annum over 12 years. Total cash costs are expected to be approximately US$377 per ounce of gold produced, including royalties and operating taxes. Ungeared NPV for the project is US$103.7 million at a 7% discount rate per annum, the IRR is 34.8% and the payback is 30 months from the start of production. The ore will be processed using bio-oxidation technology provided by GoldFields. // Proactive Investors UK
