OXUS GOLD PLC 
By Oxus Gold PLC
14 November 2012
UNCITRAL Arbitration Proceedings and Update on Amantaytau Goldfields A.O.
Oxus Gold ("Oxus" or the "Company") refers to the Uzbek-registered joint venture company Amantaytau Goldfields A.O. ("AGF" or the "Joint Venture") formed with the State Committee for Geology and Mineral Resources and Navoi Mining and Metallurgical Combinat, as well as to the ongoing UNCITRAL arbitration between Oxus and the Government of Uzbekistan ("Uzbekistan"), in relation to the expropriation of the Company's Khandiza and AGF investments.
Update on the Arbitration Proceedings
The Company provides the following update on arbitration proceedings which complies with the Order of the Arbitral Tribunal dated March 19, 2012 on the confidentiality of the arbitral proceedings.
The Arbitral Tribunal has held that Oxus has standing under the bilateral investment treaty between the United Kingdom and Uzbekistan dated November 24, 1993 (the "BIT") to bring its claims for expropriation as direct and indirect shareholder of the non-UK subsidiaries that have made the investment in Uzbekistan.
The losses to Oxus caused by this expropriation have been calculated by Ernst & Young according to alternative legal and quantification theories. On the basis of a discounted cash flow ("DCF") quantification, the loss in respect of the Khandiza investment ranges from a high of USD 588.7 million to a low of USD 72.1 million, and as a very last alternative, on a restitution basis (i.e. upon the restoration of the Company's Khandiza investment), USD 9 million. The Company's losses in respect of its AGF investment have been quantified by Ernst & Young together with Wardell Armstrong International on the basis of a DCF quantification as ranging as high as USD 661.8 million and not lower than USD 480.3 million.
Uzbekistan has denied the totality of the Company's expropriation claims and raises various counterclaims against the Company, which will be quantified in due course.
It is presently anticipated that the Arbitral Tribunal will render its award in 2014.
Amantaytau Gold A.O. insolvency proceeding
On October 24, 2012, the British Embassy in Uzbekistan received a notice dated October 2, 2012 from a Court Appointed Manager informing of the initiation of a Court Supervision process in respect of the Joint Venture, following a decision by the Navoi Regional Economic Court dated September 21, 2012. The notice, which was transferred to Oxus as soon as received by the British Embassy, further explained that the Court Appointed Manager had been appointed on behalf of AGF, and that a first meeting of the Joint Venture's creditors would take place in Uzbekistan on November 1, 2012, followed by a court hearing on November 7, 2012.
In response to this notice, Oxus wrote to the Court Appointed Manager on October 31, 2011, to complain that the notice did not afford the Company, AGF's largest creditor, sufficient time to prepare for the meeting of creditors or the hearing, nor to retain counsel. Nor had Oxus been afforded an opportunity to participate in or comment on the appointment of the Court Appointed Manager or the decision of the Navoi Regional Economic Court. In its letter, Oxus recalled that it had declared force majeure in respect of the AGF project because of the acts and omissions of Uzbekistan, and that it was pursuing its claims against Uzbekistan in arbitration. Moreover, Oxus called for AGF's other creditors and assignees to be made aware of the outstanding balance of USD 44.2 million owed by AGF to the Oxus Group, as well as of the misappropriation by AGF of a USD 2.5 million drill rig loaned to AGF by Oxus in April 2010, and which has still not been returned.
The outcome of the insolvency proceedings is not expected to negatively impact the arbitration.
Richard Shead, Chairman commented:
"We remain confident that Oxus will be awarded fair compensation for its investments in Uzbekistan and we will continue to take whatever steps are required to maximise such compensation for the benefit of all Oxus stakeholders.
We shall continue to keep investors updated with any material developments".
Contact details:
For further information, please contact:
Oxus Gold PLC Richard Shead | Tel: +44 (0) 20 797 2000 |
SP Angel Corporate Finance LLP Ewan Leggat / Laura Littley | Tel: +44 (0) 20 3463 2260 |
This information is provided by RNS
RNS news service provided by Hemscott Group Limited.
|
distributed by
|
