Preliminary Results

Oxus Gold Plc

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

Preliminary Results

CHAIRMAN'S STATEMENT

Most of last year was spent by directors and management in progressing the arbitration claim for the misappropriation by the Uzbek Government of both the Company's Khandiza and Amantaytau Goldfields mining assets in Uzbekistan, which resulted in a substantial destruction of shareholder value of your company.

In order to ensure that your company remains adequately funded to pursue its claims through international arbitration, it successfully put in place both a litigation funding agreement, which ensures that the legal costs of the claim will be funded through to its conclusion, and an equity funding agreement to ensure that your company's ongoing operational costs, which have as in the previous year been again reduced wherever possible, will remain funded during this most difficult period in the life of your company. Details of both these funding arrangements have been fully disclosed in various RNSs issued during the past twelve months.

It gives me great confidence that two professional companies well versed in litigation funding and value creation have, after reviewing Oxus' claims, taken the decision to provide the Company with the financial support necessary to progress these claims to what I confidently believe will be a successful conclusion for all stakeholders.

With respect to the abuses suffered by certain of our former employees, I wish I was able to provide more positive news.

Mr Said Ashurov, AGF's former Chief Metallurgist, remains in prison in Uzbekistan on what the company considers to be an unjust and improper conviction for seeking to remove classified information from the country, despite high-level approaches made to the Uzbek authorities through diplomatic and other formal lines of communication. We continue to remain hopeful that Uzbekistan will on humanitarian grounds release Mr Said Ashurov, who I understand is critically ill, into the care of his family.

A number of other former employees have also had arrest warrants issued against them on what we consider are fabricated charges. It is regrettable that the arrest and / or imprisonment of employees is a standard tactic adopted by the Uzbek Government in its various disputes with foreign investors in the expectation that the investor will capitulate and not progress its claim for compensation.

Despite these pressures, your company remains willing to consider offers from the Uzbek Government to settle our claims on a fair and equitable basis taking into account the independent valuations of the assets misappropriated. If no such offer is received, your company will continue with its claims which are currently scheduled to be heard before the arbitral tribunal in early 2014.

In conclusion I would like to thank my fellow director, management, staff and professional advisors for all their hard work and support during the past twelve months, which will hopefully lead to the enhancement of shareholder value in the forseeable future.

Richard Shead

Executive Chairman

16 May 2013

FINANCIAL REVIEW

During the year ended 31 December 2012 management has continued to pursue the arbitration proceedings seeking compensation for the Group in respect of the Amantaytau Goldfields ("AGF") and Khandiza mining assets in Uzbekistan. There are no other operating activities currently being undertaken by the Group. The Company's ability to continue with the arbitration process has been significantly strengthened through the further reorganisation of the Group's liabilities through entering into a litigation funding agreement and equity financing agreement.

For the years ended 31 December 2012 and 2011 the Group has accounted for the investment in AGF as an available-for-sale financial asset under IAS 39 Financial Instruments: Recognition and Management, recognising the loss of joint control of the investment. Although the outcome of the arbitration proceedings is uncertain, compensation sought from the proceedings exceeds the book value of the AGF and Khandiza assets. Accordingly no provision is considered necessary against the carrying value of the AGF investment. The carrying value of Khandiza, which was fully provided against in 2008, was reinstated during the year ended 31 December 2011.

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. No response 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. On 31 August 2011 the Group commenced international UNCITRAL 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. The Arbitral Tribunal has held that Oxus has standing under the Bilateral Investment Treaty between the United Kingdom and Uzbekistan to bring its claims for expropriation as a direct and indirect shareholder of the non-UK subsidiaries that have made the investments in Uzbekistan.

On 17 September 2012 the Group submitted its detailed Statement of Claim to the Arbitral Tribunal.

The Statement of Claim is accompanied by an independent quantum report prepared by the international accounting firm, Ernst & Young, and an expert opinion on valuation by international mineral consultants, Wardell Armstrong International, quantifying the losses to Oxus as a result of various breaches of the BIT by the Uzbek Government. The loss in respect of the Khandiza investment is quantified as ranging from $72.1 million to $588.7 million, and in respect of AGF from $480.3 million to $661.8 million.

The Ministry of Finance of the Republic of Uzbekistan brought a claim of $10.8 million against the Company in respect of the AGF Phase 2 Project Development Fund and obtained a judgment in its favour in the Uzbek courts, which it sought to enforce in the English courts. The parties have now agreed that all proceedings in respect of this court action will be stayed until after the Arbitral Tribunal has rendered its final award in the arbitration proceedings, or the arbitration is finally discontinued or disposed of.

Since March 2011 the Group's access to the accounting records, financial information and production data of AGF has been severely restricted. In September 2012 insolvency proceedings were commenced against AGF following a decision by the Navoi Regional Economic Court of Uzbekistan. The Group, despite being AGF's largest creditor, was not appropriately consulted during these insolvency proceedings and in February 2013 AGF was declared bankrupt by the Navoi Regional Economic Court. The declaration of bankruptcy is not expected to negatively impact the arbitration proceedings.

RESULTS FOR THE YEAR

The Group reports a loss for the year of $6.84 million (1.61 cents per share loss) against a profit of $22.60 million (5.41 cents per share) for the year ended 31 December 2011. The loss is after deducting arbitration expenses of $3.11 million (2011: $1.96 million) and financial expenses of $1.75 million (2011: $1.62 million). The profit for the year ended 31 December 2011 arose after crediting $28.46 million in respect of the reversal of the impairment of the Khandiza project, and does not include the Group's 50% share of AGF's profit or loss prior to the declaration of force majeure in March 2011 as the necessary financial records for this period were not made available by AGF.

Total Group assets decreased to $75.82 million (2011: $76.70 million), including cash and cash equivalents of $1.04 million (2011: $1.70 million).

CORPORATE ACTIVITIES

During the year the Company issued 23,072,892 new ordinary shares, representing 906,226 shares in respect of capitalised fees and salaries of directors, senior management and advisers, 5,000,000 shares in respect of exercised options, and 17,166,666 shares issued in respect of the Equity Finance Facility (see below). At 31 December 2012 the total number of shares in issue was 441,888,995. Since the year-end a further 8,863,146 new ordinary shares have been issued, representing 457,474 shares in respect of capitalised fees and salaries of directors, senior management and advisers, and 8,405,672 shares in respect of the Equity Finance Facility. As at 8 May 2013 the total number of shares in issue was 450,752,141.

In May 2008 the Company issued convertible loan notes (the "Notes") in the principal amount of $18.5 million which were repayable, if not converted, in May 2010. 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 were repayable, if not converted, in May 2013. In November 2010 $3.0 million in principal amount of the Notes were converted. In July 2012 the Notes were further restructured such that the repayment date has been amended to the earlier of 14 December 2015, or the date on which the proceeds of an award, settlement or other realisation for value of the rights in the arbitral proceedings are received by the Company, or 60 calendar days from the date on which the proceedings conclude or terminate or a settlement is reached, in each case where no payment is receivable by the Company. The loan note holders have also agreed that interest payable under the Notes and falling due on or after 6 July 2012 shall accrue but remain unpaid, and be convertible at the option of the loan note holder at the average closing middle market price of the Company's ordinary shares for each separate 6 month interest period to which that portion of interest relates. If all the remaining Notes are converted the maximum number of new ordinary shares that would be issued is 80,729,166. If all the interest accrued to date is converted, a further 5,708,104 new ordinary shares would be issued. The Notes are disclosed as a non-current liability.

On 29 February 2012 the Company announced that it had entered into a litigation funding arrangement by which the funder has agreed to pay the Group's legal costs on a non-recourse basis in relation to the international arbitration proceedings against the Uzbek Government and the action brought by the Ministry of Finance in the English courts. The Company continues to have complete control over the conduct of the proceedings, and continues to have the right to negotiate a settlement, discontinue proceedings, pursue the proceedings to trial and take any action considered appropriate to enforce judgment. The Company has given certain warranties and covenants to the funder and has agreed to pay to the funder a material portion of any final settlement of the arbitration claim. Such payment will only be payable upon a final settlement of the claim and the amount of payment is dependent upon a number of variables including the value of any settlement and the length of time taken to reach a settlement. The funder and the Company both retain the right, under certain circumstances, to discontinue the funding arrangements. At 31 December 2012 the Company had received $3.3 million of funding under this arrangement.

On 20 August 2012 the Company entered into a £3 million Equity Financing Facility ("EFF") with Darwin Strategic Limited ("Darwin"), a majority owned subsidiary of Henderson Global Investors' Alphagen Volantis fund. Under the terms of the EFF, the Company may make drawdowns up to an aggregate of £3 million by way of Darwin subscribing for new ordinary shares in the Company during the period of 36 months commencing on 20 August 2012. Net proceeds of £406,917 were drawn down under this arrangement. On 13 March 2013 the terms of the EFF were amended to allow Darwin to provide the Company with a minimum amount of £100,000 per month over the period of 18 months commencing on 13 March 2013, up to a maximum amount of £3.6 million over the period. The proceeds will be used to fund the Company's working capital requirements. As at 8 May 2013 proceeds totalling £200,000 had been drawn down under the amended terms of the EFF.

Since the year end the Company has settled a dispute relating to two drill rigs in Romania owned by a subsidiary of the Company. The Company was paid €228,000 in full and final settlement of the dispute.

At 8 May 2013 the Group's cash resources stood at approximately $1.1 million.

NOMINATED ADVISER AND BROKER

On 29 October 2012 the Company announced that it had appointed S P Angel Corporate Finance LLP as its nominated adviser and broker, in place of Fairfax I.S.PLC.

AUDITOR

On 24 January 2013 the Company appointed Crowe Clark Whitehill LLP as its auditor, in place of Deloitte LLP.

ANNUAL GENERAL MEETING

The Company's thirteenth Annual General Meeting will be held at The Washington Mayfair Hotel, 5 Curzon Street, London W1J 5HE on 17 June 2013 at 11.00 a.m.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012

All amounts related to continued operations.

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2012

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012

Share capital is the amount subscribed for shares at nominal value.

Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses.

Capital reserve represents the credit to equity in respect of share-based payments adjusted for foreign exchange movements together with reserves arising from the acquisition of minority interests, the capital proportion of convertible loans and historic adjustments arising from corporate reconstructions prior to the adoption of international accounting standards.

The merger reserve comprises gains arising from a Group corporate reconstruction in 2001.

Retained deficit represents the cumulative loss of the Group attributable to equity shareholders.

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012

1. Basis of preparation

The financial information set out in this announcement does not constitute the Group's statutory accounts for the years to 31 December 2012 or 31 December 2011 but is derived from the Group's Annual Reports for the same years.

The audit report for the year ended 31 December 2012 contains a 'disclaimer of opinion' arising from the inability of the Group to access management and other relevant financial information at Amantaytau Goldfield. A similar disclaimer arose for the year ended 31 December 2011.

Below is an extract form the Independent auditors' report for the year ended 31 December 2012.

Basis for disclaimer of audit opinion on financial statements

The audit evidence available to us was limited due to restrictions placed on the scope of our work as a result of the on-going legal dispute between the Uzbekistan Government and Oxus Gold Plc.

As a result we did not have access to the financial records and management of Amantaytau Goldfields ("AGF"), the joint venture through which the Group has conducted its operations in Uzbekistan, and have been unable to obtain sufficient appropriate audit evidence in the Group financial statements concerning:

·; the carrying value of the $42.2 million AGF available-for-sale investments as at 31 December 2012; and

·; the Group's share of any profit or loss generated in 2011 by AGF prior to the date joint control was lost in March 2011, noting that the financial statements include a figure of $nil for this period as the Group did not have access to the necessary financial records.

·; the existence of the Group's drill rig held in the possession of AGF, which has a carrying value of $1.8 million;

In addition, as shown in notes to the financial statements, the company's AGF investment has been shown net of a liability previously imposed against the Group, and upheld in the Uzbekistan courts in 2010, in respect of the AGF Phase II development fund. The carrying value of this liability at 31 December 2012 was $10.8 million and is disclosed as a contingent liability in the financial statements The Uzbekistan Government has brought this case before the United Kingdom (UK) courts to enforce the ruling obtained in Uzbekistan but the action has been stayed pending the outcome of the international arbitration. The directors are unable to provide evidence as to whether the Group has been formally released from this liability. We have been unable to obtain sufficient appropriate audit evidence as to whether the Company has been released from liability and accordingly whether the accounting treatment adopted by the Company as outlined above is in accordance with IFRS.

In addition, as disclosed in the notes, in 2011 the Group has reversed a previous impairment provision of $28.5 million, relating to its investment in the Khandiza base metals project ("Khandiza"), as the related costs are included in the arbitration proceedings referred to above. The directors are unable to provide evidence of any indication that the conditions that triggered this impairment loss no longer exist and accordingly we believe that it should not have been reversed. This would result in a loss in the prior year of $5.9 million and would reduce net assets by $28.5 million.

As a result of the above, we are unable to form an opinion on the carrying value of the investment in subsidiaries and loans due from AGF included within the Company balance sheet. The carrying value of these assets at 31 December 2012 was £75.7 million and £4.9 million respectively. 

The Annual Report, which will contain the financial statements for the year ended to 31 December 2012 and the notice of Annual General Meeting, will be posted to shareholders shortly and will also be available on the Company's website www.servicedofficegroup.com.

In preparing the financial information in this announcement the Group has applied accounting policies in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial statements are prepared on the historical cost convention, as modified by the revaluation of investment property and the fair valuation of financial instruments.

Going concern

The Group has declared force majeure with regard to AGF and is seeking appropriate compensation through international arbitration. The Group has also 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. However, the recoverability of the carrying value of the assets remains dependent on the outcome of the proceedings, which is uncertain.

The Ministry of Finance of the Republic of Uzbekistan brought a claim of $10.84 million against the Company in respect of the AGF Phase 2 Project Development Fund (the "Fund") and obtained a judgment in its favour in the Uzbek courts, which it sought to enforce in the English courts. The parties have now agreed that all proceedings in this UK court action will be stayed until after the Arbitral Tribunal has rendered its final award in the arbitral proceedings, or the arbitration is finally discontinued or disposed of. The Fund is disclosed as a contingent liability within the financial statements.

In May 2008 the Company issued convertible loan notes (the "Notes") in the principal amount of $18.5 million which were repayable, if not converted, in May 2010. 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 were repayable, if not converted, in May 2013. In November 2010 $3.0 million in principal amount of Notes were converted. In July 2012 the Notes were further restructured such that the repayment date has been amended to the earlier of 14 December 2015, or the date on which the proceeds of an award, settlement or other realisation for value of the rights in the arbitral proceedings are received by the Company, or 60 calendar days from the date on which the proceedings conclude or terminate or a settlement is reached, in each case where no payment is receivable by the Company. The loan note holders have also agreed that interest payable under the Notes and falling due on or after 6 July 2012 shall accrue but remain unpaid, and be convertible at the option of the loan note holder at the average closing middle market price of the Company's ordinary shares for each separate 6 month interest period to which that portion of interest relates. The Notes are disclosed as a non-current liability.

The directors continue to undertake appropriate measures to preserve cash until such time as the Group's operations are fully funded and the dispute with the Uzbek Government has been resolved. On 29 February 2012 the Company announced that it had entered into a litigation funding arrangement by which the funder has agreed to pay the Group's legal costs on a non-recourse basis in relation to the international arbitration proceedings against the Uzbek Government and the action brought by the Ministry of Finance in the English courts. The Company continues to have complete control over the conduct of the proceedings, and continues to have the right to negotiate a settlement, discontinue proceedings, pursue the proceedings to trial and take any action considered appropriate to enforce judgment. The Company has given certain warranties and covenants to the funder and has agreed to pay to the funder a material portion of any final settlement of the arbitration claim. Such payment will only be payable upon a final settlement of the claim and the amount of payment is dependent upon a number of variables including the value of any settlement and the length of time taken to reach a settlement. The funder and the Company both retain the right, under certain circumstances, to discontinue the funding arrangements.

On 20 August 2012 the Company entered into a £3 million Equity Financing Facility ("EFF") with Darwin Strategic Limited ("Darwin"), a majority owned subsidiary of Henderson Global Investors' Alphagen Volantis fund. Under the terms of the EFF, the Company may make drawdowns up to an aggregate of £3 million by way of Darwin subscribing for new ordinary shares in the Company during the period of 36 months commencing on 20 August 2012. Net proceeds of £406,917 were drawn down under this arrangement. On 13 March 2013 the terms of the EFF were amended to allow Darwin to provide the Company with a minimum amount of £100,000 per month over the period of 18 months commencing on 13 March 2013, up to a maximum amount of £3.6 million over the period. The proceeds will be used to fund the Company's working capital requirements. As at 8 May 2013 proceeds totalling £200,000 had been drawn down under the amended terms of the EFF.

Since the year end the Company has settled a dispute relating to two drill rigs in Romania owned by a subsidiary of the Company. The Company was paid €228,000 in full and final settlement of the dispute.

At 8 May 2013, the Group's cash resources stood at approximately $1.1 million.

The future of the Group and its principal activities remain materially uncertain depending on the outcome of the dispute with the Uzbek Government. Therefore a material uncertainty exists which may cast significant doubt on the Company and the Group's ability to continue as a going concern and, therefore, to realise its assets and discharge its liabilities in the normal course of the business. Once the outcome is known, it is currently the intention of the directors to consult the Company's shareholders as to the future direction of the Group's activities. Nevertheless after making enquiries and considering the uncertainties described above, and noting that litigation funding and an equity financing facility have been obtained, the directors have an expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.

2. Basis of accounting

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with IFRSs adopted by the European Union.

The financial statements have been prepared on the historical cost basis, except for the revaluation of certain assets and financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies adopted are set out below.

3. Accounting estimates and judgements

Certain of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to previous experience but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimation is contained in the accounting policies and/or the notes to the financial statements and the key areas are summarised below.

The key judgements in respect of the 2012 financial statements are the application of the going concern basis of accounting and the extent to which the Group's Uzbek mining properties, property, plant and equipment and AGF available-for-sale investment are recoverable, following the declaration of force majeure in March 2011 and resulting international arbitration.

In addition, the directors' conclusion that there is no reliable measure available to determine the fair value of the Group's investment in AGF at the date joint control was lost.

4. Arbitration expenses

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 $3.11 million (2011: $1.96 million). Since the year-end a further $0.26 million has been expended, which was paid by the litigation funder (see also the Financial Review.

5. Earnings per share

The calculation of the basic earnings/(loss) per share is based on the following data:

The diluted loss per share disclosed for 2012 is the same as the basic loss per share as the effect of the loss for the period on earnings per share is anti-dilutive. The calculation of diluted earnings per share for 2011 relates to the convertible loan notes. The earnings figure used therefore added back the related interest charge for 2011 of $1,.37 million and the weighted average number of ordinary shares includes an additional figure of 80,729,166.

6. Mining properties

The additions to the Amantaytau project (Uzbekistan) in 2011 of $78,000 related to the period 1 January 2011 to 31 March 2011 before control was lost.

The Group tests intangible and tangible assets for impairment annually, or more frequently, if there are indications that assets might be impaired.

The Group made a full provision against the carrying value of its investment in the Khandiza project during the year ended 31 December 2008 as, at that time, it was uncertain whether the Group would be invited to participate in the future development of this asset or would as an alternative commence international arbitration proceedings with regards to it. On 31 August 2011 the Group included the loss of the Khandiza project within the international arbitration proceedings commenced against the Uzbek Government in respect of AGF. Accordingly the carrying value of Khandiza has been reinstated.

7. Property, plant and equipment

Included in the net book value is a drill rig carried at $1.76 million (2011: $1.99 million). In April 2010 AGF entered into an operating agreement with Oxus Resources Corporation ("ORC") whereby AGF leased a drilling rig from ORC. As a condition of this agreement AGF arranged insurance against Physical Loss of, or Damage to, the drill rig and its spares for a policy period of 12 months commencing 2 August 2010 with a sum insured of $2.37 million and ORC was a named co-insurer. On 10 May 2011 ORC wrote to AGF terminating the agreement in accordance with its provisions. AGF has not responded to this.

At the same time and within the policy period ORC filed a claim for physical loss of the drill rig seeking $2.37 million from the insurer, Uzbekinvest National Export-Import Insurance Company. AGF arranged the insurance of the drill rig using EOS Risq, an Uzbek insurance brokerage firm. The claim was filed via EOS Risq but to date Uzbekinvest National Export-Import Insurance Company has not responded to them. The return of the drill rig, or compensation for its physical loss, also forms part of the international arbitration proceedings.

8. Available-for-sale financial assets

The amount stated represents the net investment of the Group in AGF up to the time that joint control was lost in March 2011 following the declaration of force majeure. In the view of the directors, due to the uncertainties surrounding the arbitration with the Uzbek government, there is no reliable measure available to determine the fair-value of AGF in March 2011 and they have accordingly valued their interest in AGF at that date at its historical carrying value.

9. Trade and other receivables

The trade and other receivable balances are categorised as loans and receivables. At the balance sheet date, with the exception of the amounts due from AGF, none of the trade and other receivable balances is past due but not impaired. The recoverability of the AGF receivable is dependent on successful completion of the arbitration proceedings.

10. Interest-bearing loans and borrowings

The fair-value of the income-earning financial assets and the interest-bearing financial liabilities is not materially different from the values attributed to these items in the financial statements.

11. Convertible loan notes

In May 2008 the Company issued convertible loan notes (the "Notes") in the principal amount of $18.5 million which were repayable, if not converted, in May 2010. 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 were repayable, if not converted, in May 2013. In November 2010 $3.0 million in principal amount of Notes were converted. In July 2012 the Notes were further restructured such that the repayment date has been amended to the earlier of 14 December 2015, or the date on which the proceeds of an award, settlement or other realisation for value of the rights in the arbitral proceedings are received by the Company, or 60 calendar days from the date on which the proceedings conclude or terminate or a settlement is reached, in each case where no payment is receivable by the Company. The loan note holders have also agreed that interest payable under the Notes and falling due on or after 6 July 2012 shall accrue but remain unpaid, and be convertible at the option of the loan note holder at the average closing middle market price of the Company's ordinary shares for each separate 6 month interest period to which that portion of interest relates. If all the remaining Notes are converted the maximum number of new ordinary shares that would be issued is 80,729,166. If all the interest accrued to date is converted, a further 5,708,104 new ordinary shares would be issued. The Notes are disclosed as a non-current liability.

The Notes contain two components: liability and equity elements. The equity element is presented in equity under the heading of "Capital Reserve". The effective interest rate of the liability element on initial recognition subsequent to substantial modification in January 2010 is 9.8% per annum. On 6 July 2012 the note-holders agreed to defer interest and capital repayments until the earlier of the settlement of the proceedings against the Uzbek Government or 14 December 2015. On the same date the note-holders were granted an option to convert accrued interest to ordinary shares of the Company.

12. Trade and other payables

The directors consider that there is no material difference between the fair values and book values of Trade and other creditors and are not past due.

13. Capital commitments

The Group and the Company had no capital commitments for mining property or property, plant and equipment outstanding at 31 December 2012 (2011: nil).

Contingent asset

In May 2007 the Group disposed of its interests in Kyrgyzstan (the Jerooy project), Turkey and Romania to KazakhGold Group Limited. KazakhGold is contracted to pay additional consideration of up to $80 million conditional upon KazakhGold or a nominee acquiring a licence to mine, or acquiring a Company or entity that has the benefit of a license to mine, the Jerooy deposit and commencing development or production at this site.

No amounts have been recognised in these financial statements for this contingent asset. There have been no changes to this position known to the Company.

14. Contingent liability

AGF Phase 2 Project Development Fund

Since 2004 the Company has accrued the AGF Phase 2 Project Development Fund (the "Fund") in respect of an amount to be paid to the Uzbek Government. Given the current dispute with the Uzbek Government, and the fact that the AGF Phase 2 Project is unlikely to be developed by the Group, the Fund has now been reclassified as a contingent liability of approximately $10.8 million the enforcement and recognition of which is subject to the outcome of the litigation in the English courts and the international arbitration against the Uzbek Government.

15. Post-balance sheet events

Dispute with the Uzbek Government

The dispute with the Uzbek Government is ongoing and the Company continues to seek an amicable settlement to the dispute.

Equity Finance Facility

Since the year end the Company has amended the terms of the Equity Finance Agreement with Darwin.

Settlement of dispute

Since the year end the Company has settled a dispute relating to two drill rigs in Romania.

Atlas Copco lease payments

Since the year end the Company has further amended the terms of its finance lease with Atlas Copco Customer Finance AB in respect of a drill rig situated at AGF.

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