Half Yearly Report

OXUS GOLD plc

("Oxus" or the "Company" or the "Group")

Interim Results for the six months ended 30 June 2011

The Group reports its unaudited results for the six month period ended 30 June 2011 (the "Period"). Comparative information is for the six month period ended 30 June 2010.

For the year ended 31 December 2010 the Group has accounted for its joint venture, Amantaytau Goldfields ("AGF"), using equity accounting, rather than proportionate consolidation which was used for the year ended 31 December 2009 and the six month period ended 30 June 2010. Comparative information for the six months ended 30 June 2010 have been restated to reflect this change in accounting policy, as required by revised International Accounting Standard 1 Presentation of Financial Statements.

The decision to revert back to equity accounting was based on the fact that the Group is currently in dispute with the Government of Uzbekistan, and is seeking appropriate compensation for its 50% share in AGF via a negotiated settlement or international arbitration. The Company has commenced international arbitration proceedings against the Uzbek Government and has included the loss of the Khandiza base metals project in 2006 within the proceedings. Compensation sought from the proceedings exceeds the book value of the AGF and Khandiza assets. Accordingly no provision has been made in the financial statements against the carrying value of the AGF assets. In addition, the carrying value of Khandiza, which was fully provided against in 2008, has been reinstated.

In January 2011 the Uzbek shareholders in AGF agreed in principle to acquire the Group's 50% shareholding in AGF. In February 2011 the Group submitted a detailed offer to the Uzbek shareholders of AGF. To date no reply has been received to the offer and instead AGF was subjected to an extensive audit of its financial and economic activities by an audit commission appointed by the Uzbek Government. This resulted in the Group becoming unable to manage the operational affairs of AGF and a declaration of force majeure in March 2011. During the Period the Group notified the Uzbek Government that it would revert to international arbitration if the dispute could not be settled amicably and on 31 August 2011 the Group commenced international arbitration proceedings against the Uzbek Government in order to seek appropriate compensation. The Group has also included the loss of the Khandiza base metals project in 2006 within the proceedings.

Since March 2011 the Group's access to the accounting records, financial information and production data of AGF has been severely restricted and this has in turn disrupted the Group's ability to complete consolidated accounts for the Period and the year ended 31 December 2010. Due to these restrictions which have also impaired the Group's ability to manage AGF operations, the Group no longer has joint control over AGF. As a result, the investment which the Group retains in the AGF and Khandiza mining properties is measured in accordance with IFRS 9 Financial Instruments and since March 2011 has been classified as Available for Sale Investments.

The Group reports a profit for the Period of $25.03 million (earnings of 6.02 cents per share) against a loss of $2.72 million (loss of 0.70 cents per share) for the six months ended 30 June 2010. The profit for the Period is after crediting $28.46 million (2009: $nil) in respect of the reversal of the impairment of the Khandiza project, which was provided against in 2008.

Total Group assets increased to $79.30 million (31 December 2010: $56.79 million), including cash and cash equivalents of $4.14 million (31 December 2010: $6.69 million).

Corporate Activities

During the Period the Company issued 4,395,647 new ordinary shares, representing capitalised fees and salaries of Directors and senior management. As at 11 November 2011 the total number of shares in issue was 418,816,103.

The Ministry of Finance of the Republic of Uzbekistan is claiming $10.84 million from the Company in respect of the AGF Phase 2 Project Development Fund (the "Fund") and has obtained a judgment in its favour in the Uzbek courts, which it is seeking to enforce in the English courts. The Company is vigorously defending the claim. The circumstances surrounding the creation of the Fund also form part of the Group's claim in arbitration against the Uzbek Government.

In May 2008 the Company issued convertible loan notes in the principal amount of $18.5 million. In January 2010 the notes were restructured such that they are convertible at 12p per share, earn interest at UK LIBOR + 3% per annum, and are repayable, if not converted, in May 2013. In November 2010 $3 million in principal amount of notes were converted. If all the remaining notes are converted the maximum number of new ordinary shares that would be issued is 80,729,166.

At 31 December 2010 the Company owed Nedbank $2.5 million against a $20 million corporate loan facility. During the Period this amount has been repaid in full.

The Directors continue to undertake appropriate measures in order to preserve cash until such time as the Group's operations are fully funded and the dispute with the Uzbek Government has been resolved. At 10 November 2011, the Group's cash resources stood at approximately $2.9 million.

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CONSOLIDATEDFINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2011

Condensed consolidated Income Statement

All amounts relate to continuing operations.

Condensed consolidated balance sheet

Condensed consolidated statement of cash flows

SELECTED NOTES TO THE INTERIM CONDENCED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2011

1. Corporate information

Oxus Gold plc ("the Company") is a company incorporated in England.

2. Basis of preparation

These condensed interim financial statements of the Company and its subsidiaries ("the Group") for the six months ended 30 June 2011 (the Period) have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs). The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 31 December 2010. These condensed interim financial statements have not been audited, do not include all of the information required for full annual financial statements, and should be read in conjunction with the Group's consolidated annual financial statements for the year ended 31 December 2010. The auditors' opinion on these Statutory Accounts was modified and contained an emphasis of matter in respect of the Group's ability to continue as a going concern. While the financial figures included within this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as set out in International Accounting Standard 34 Interim Financial Reporting.

Prior to the year ended 31 December 2010, the Group used proportionate consolidation to account for its interest in the AGF joint venture. Given the current state of affairs at AGF, the Directors considered that proportionate consolidation of 50% of AGF's income, expenditure, assets and liabilities was no longer appropriate. In the board's view, the equity accounting method provided a reliable and more relevant presentation of the Group's results and its operating activity for the year ended 31 December 2010. Therefore, the Group decided to make a voluntary change in the accounting policy and the new accounting policy was applied retrospectively.

Comparative information for the six month period ended 30 June 2010 have been restated to reflect this change in accounting policy.

Due to the restrictions which impaired the Group's ability to manage AGF's operations, the Group, with effect from March 2011, no longer has had joint control over AGF. The Group therefore discontinued the use of the equity accounting method from the date that it ceased to have joint control, or significant influence, over the operations of AGF. The investment which the Group retains in the AGF and Khandiza mining properties is measured in accordance with IFRS 9 and since March 2011 has been classified as Available for Sale Investments.

3. Total Comprehensive income

There are no additional items of income and expense which are not included within the profit and loss for the Period.

4. Reversal of impairment provision related to Khandiza mining properties

On 31 August 2011 the Group commenced international arbitration proceedings against the Uzbek Government in order to seek appropriate compensation if a satisfactory settlement cannot otherwise be reached. The Group has also included the loss of the Khandiza base metals project in 2006 within the proceedings. Accordingly the carrying value of Khandiza, which was fully provided against in 2008, has been reinstated and forms part of Available for Sale Investments (see note 7).

The arbitration requests that damages be awarded in favour of the Group in an amount to be proven and quantified in the proceedings and currently estimated as no less than US$400 million. Therefore, management believes that the carrying amounts of the Group's and Company's investments in and receivables from both AGF and Khandiza are fully recoverable.

5. Legal costs and settlement of claims

Legal costs associated with the international arbitration against the Uzbek Government in order to seek appropriate compensation for the Group's investments in the AGF and Khandiza mining properties constituted US$0.67 million for the Period.

During the year ended 31 December 2010 the Company incurred legal and settlement costs of $1.11 million in respect of a claim brought against the Company by a former director. There is no further dispute between the parties.

6. Earnings per share

The calculation of the basic earnings per share for the six month period ended 30 June 2011 is based on the following data:

Impact of change in accounting policy

The change in the Group's accounting policy during the Period is described in detail in note 1. The change in accounting policy had no impact on the reported net profit.

7. Available for sale investments

8. Loans and borrowings

Nedbank corporate loan facility

As at 31 December 2010, $2.5 million remained outstanding against a $20 million corporate loan facility with Nedbank Limited. The loan earned interest at 2.75% above 3 month US LIBOR. The loan has been repaid in full since the year-end.

Convertible loan notes

In May 2008 the Company completed a placement of 8.0% unsecured convertible loan notes in units of $250,000 each at par, due May 2010 (the "Notes"), for gross proceeds of $18.5 million. The Notes were convertible into a maximum of 26,315,789 new ordinary shares of the Company at a price of £0.37 per share. In January 2010, the Company completed a restructuring of the Notes such that they are now convertible at £0.12 per share, earn interest at UK LIBOR plus 3% per annum, and the repayment date has been extended to May 2013.

In November 2010, $3.0 million of the Notes were converted into 15,625,000 new ordinary shares of the Company at £0.12 per share. If all the Notes outstanding at 30 June 2011 are converted, a total of 80,729,166 new ordinary shares in the Company would be issued.

Obligations under finance lease

In April 2010, the Group entered into a credit agreement with Atlas Copco Craelius AB under the terms of which the Group leased certain of its exploration equipment under finance lease. The lease term is 3 years. The ownership title for the leased assets will be transferred to the Group at the end of the lease term for no charge. The Group's obligations under finance leases are secured by the lessors' title to the leased assets. Interest rates underlying all obligations under the finance lease were fixed at the contract date at 8.7% per annum. The exploration equipment was in turn leased by the Group to AGF; this agreement has now been terminated. The Group has requested AGF to return the equipment, which, to date, has not occurred. The Group, as a co-insured, has therefore filed and is persuing a claim for physical loss.

9. AGF Phase 2 Project Development Fund

Since 2004 the Company has accrued the AGF Phase 2 Project Development Fund in respect of an amount to be paid to the Uzbek Government.The Fund has now been reclassified as a contingent liability the enforcement and recognition of which is subject to the outcome of the litigation in the UK and the arbitration against the Uzbek Government.

10. Approval of interim group financial statements

These interim group condensed financial statements for the six months to 30 June 2011 were approved by the Directors on 11 November 2011.