Uzbek-British JV may receive funds by late 2010
Uzbekistan, Tashkent, Nov. 18 / Trend D.Azizov /
The British Oxus Gold plc, owning 50 percent of the shares in the Uzbek-British JV Amantaytau Goldfields, expects to receive financing from a consortium of Chinese investors by late 2010, the company reported today. The JV extracts gold in Central Kyzylkum.
Oxus Gold plc signed an agreement with the consortium in January to participate in financing the enterprise on the basis of "investments in exchange for shares."
During 2010-2016, a consortium of Chinese companies will invest $185 million to develop the Uzbek-British JV Amantaytau Goldfields.
The consortium includes Baiyin Non-Ferrous Group Co Ltd. and CITIC Construction Co Ltd., which are controlled by the Chinese government, as well as the private Chang Xin Yuan Su investment fund.
In accordance with the terms of the agreement, during the first phase this year, the consortium will invest $85 million to construct the second stage of a gold extraction plant in exchange for shares in Oxus Gold. Oxus Gold will emit the new shares in May.
The consortium also signed a five-year warrant to purchase shares at $20 million with a commitment to invest $80 million in business development and increase gold production.
As a result, the consortium will own 59.7 percent of the shares in Oxus Gold.
According to the company, the issued shares will trade on the London Stock Exchange's alternative investment market by late December.
It was previously reported that JV Amantaytau Goldfields had reduced the cost of building the second stage of the gold extraction plant from $168 to $74 million due to the financial crisis.
The JV plans to put into operation the second stage to process 400,000 tons of oxide ore and produce 100,000 ounces of gold per year over 12 years in the first quarter of 2011.
The project was planned to be financed owing to the JV's own funds, Oxus shareholders, and the Royal Bank Scotland (RBS).
In early 2009, RBS announced significant losses in 2008, and revised its investment strategy, which forced Oxus Gold to begin searching for new sources of financing the project.