12th Mar 2007 07:03
KazakhGold Group Ltd12 March 2007 12 March 2007 KAZAKHGOLD ANNOUNCES AGREEMENT IN PRINCIPLE TO ACQUIRE CERTAIN OXUS ASSETS, BOARD REORGANISATION AND SENIOR MANAGEMENT APPOINTMENTS KazakhGold Group Limited (LSE: KZG) is pleased to announce that it has todayagreed in principle with Oxus Gold PLC (LSE: OXS) to acquire certain of Oxus'assets, subject to contract. These assets include: • The entire issued share capital of Norox Mining Company Limitedwhich, via its 66.67% holding in the Talas Gold Mining Company, owns thesubstantially completed gold processing plant at the site of the Jerooy goldproject in Talas, Kyrgyzstan. • The remaining 50% of the issued share capital of Romaltyn Limited,which KazakhGold acquired jointly with Oxus in November 2006. • Certain exploration assets in Turkey, currently owned by Oxus' 86%owned subsidiary, Marakand Minerals Limited (LSE: MKD), subject to boardapproval from Marakand. The proposed acquisition is subject to a number of conditions, includingcompletion of satisfactory due diligence, the receipt of independent valuationsof the assets which is satisfactory to the Board of KazakhGold, the receipt ofall necessary regulatory approvals and consents and subject to completion of alegally binding agreement. In consideration for these assets, KazakhGoldproposes to issue, upon completion, up to a maximum of 3,541,666 new shares toOxus, representing approximately 7% of the enlarged share capital of KazakhGoldfollowing the issue of the consideration shares. The number of shares issued asconsideration will be subject to adjustment if any of the assets above are nottransferred to KazakhGold. The consideration, i.e. number of shares, will not besubject to adjustment to reflect fluctuations in the KazakhGold share price Additionally, KazakhGold has agreed in principle that it will pay Oxus up to afurther US$80 million in cash, payable in instalments, if it is awarded thelicence at Jerooy and commences development and production at the deposit. Anysuch payment is conditional, inter alia, on Oxus ceasing its ongoing litigationregarding the Jerooy license. KazakhGold also announces the following changes to its board structure andstrengthening of its management team: • Kanat Assaubayev, currently the Chief Executive Officer, isappointed Executive Chairman of KazakhGold. • Peter Daresbury has stepped down from his position as Non-executiveChairman. He will continue to act as a Non-executive Director and member of theRemuneration and Audit Committees. • Darryl Norton has agreed to join the Board as an Executive Directorand Joint Managing Director. He will assume responsibility for production atKazakhGold's principal mining operations, as well as heading the Company'sInvestor Relations team. Mr Norton has over 24 years' experience in theengineering and mining industry, gained most recently as Executive Director atOxus. Prior to joining Oxus, Mr Norton spent 14 years at MAED Limited asProjects Director, where he led major projects for gold mining companies such asDurban Roodeport Deep, Anglogold and Oxus, for whom he led the construction andcommissioning of their Amantaytau Goldfields oxide project in Uzbekistan. Priorto joining MAED, Mr Norton worked on capital projects for Fluor, TWP, Batemanand Gencor, including both surface and underground mining projects. • Steve Westhead (BSc, MSc, PhD, CGeol, FGS, MIMM) joins KazakhGoldfrom Oxus as Chief Geologist and Project Manager. Prior to joining, Mr Westheadacted as Group Chief Geologist & General Director of Oxus' Talas and AmantaytauGold projects • Geoff McLoughlin joins the company as Chief Metallurgist. MrMcLoughlin was formerly Group Chief Metallurgist at Oxus Gold. • KazakhGold has resolved to appoint a further Non-Executive Director,who it is intended will also act as Senior Independent Director. • The Company continues its search for a suitably qualifiedEnglish-speaking CFO, to be based in Stepnogorsk. Speaking of the latest developments, outgoing Non-executive Chairman PeterDaresbury said: "Since KazakhGold's IPO in 2005 it has become clear to the Board that the roleof Chairman involves substantial day-to-day executive duties. These includeoperational oversight of mining activities and ongoing negotiations withgovernment authorities. These functions necessarily require a full-timepresence at the company's headquarters in Stepnogorsk, in the Akmola oblast ofKazakhstan. The Board believes that a full-time Executive Chairman will be ablemore effectively to represent the interests of KazakhGold shareholders in thiscontext." Newly appointed Executive Chairman, Kanat Assaubayev, commented on theannouncement: "Firstly, I would like to thank Peter Daresbury for his tireless contribution toKazakhGold in his role as Non-executive Chairman. His leadership, support andguidance have proved invaluable during the Company's development in the periodfollowing our IPO in November 2005 and we are delighted that he has decided tooffer his continued support to the company in his capacity as a Non-executiveDirector. The Board is taking steps to strengthen further the corporate governance atKazakhGold by resolving to appoint an additional non-executive director as soonas practicable. Furthermore, the Board believes that the appointment of DarrylNorton to the Board is a significant step forward in promoting greatertransparency and international management practices at KazakhGold. The presenceof a full-time Executive Director, with substantial international miningexperience, working alongside me in Stepnogorsk, will, the Directors believe,substantially enhance the day-to-day accountability and transparency of theCompany. Additionally, with Mr Norton taking responsibility for our InvestorRelations function, we expect to see this area strengthen also. Thesecapabilities will be reinforced further by the recruitment to our managementteam of Steve Westhead and Geoff McLoughlin. We are very excited about the potential acquisition of assets from Oxus Gold.We believe that these will contribute to achieving our stated ambition ofbecoming the leading gold producer in Central Asia." Conference Call: Mr Aidar Assaubayev, Deputy Chief Executive of KazakhGold, will discuss thecompany's latest developments and answer questions via a conference callfacility arranged for 10.00am London time on 12 March. Those wishing to participate should telephone: 00 +44 (0) 20 7162 0025 Password: KazakhGold A remote replay facility will be available from March 13 to midnight March 16 Please call: 00+44 (0) 20 7031 4064 Access Code: 742307 The company will also be making itself available for one-on-one meetings, pleasecontact your ING equity sales contact to discuss availability. Further Information: Mark Martin ING Tel: 00 +44 (0) 20 7767 6437 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Oxus Gold Plc