No. of Recommendations: 0
Regional Court Ruling

LONDON: 27 October 2006 - Oxus Gold plc ('Oxus' or the 'Company') (OXS.L) announces that the Regional Economic Court of the Navoi province in Uzbekistan issued a ruling against Amantaytau Goldfields ('AGF'), Oxus' subsidiary in Uzbekistan, on 26 October 2006 claiming taxes of $15.3 million relating to the period of 1 January 2003 to 31 December 2005, plus related fines and penalties equivalent to $4.9 million. This amount includes $7.1 million of recoverable VAT. AGF is 50% owned by Oxus Gold and 50% by the Uzbek State.

In addition, the ruling also claims $203.6 million in respect of alleged transgressions during the same period relating to the operation of AGF's overseas foreign currency bank account. The ruling becomes effective after 30 days unless overturned. AGF is appealing the majority of this ruling. AGF has been led to believe that any liabilities resulting from the rulings will be payable pursuant to a reasonable payment schedule.

AGF believes it was exempt from the majority of taxes claimed under the ruling.
AGF also maintains that it was authorised by decree of the Cabinet of Ministers to operate an overseas bank account and that such operations were conducted legitimately and with the full knowledge of the relevant Uzbek authorities, including the Ministry of Finance and the Central Bank, to which AGF regularly submitted the required reports.

On 10 October 2006 the Company announced that AGF has provided for $2.6 million in taxes and was negotiating in respect of a further $7 million of withholding taxes on subcontracting invoices and custom duties, plus various fines and penalties.

Notwithstanding the above, AGF continues to operate and senior officials of AGF and Oxus continue discussions with the Uzbek Government to resolve these issues.

Shareholders will be kept informed of all developments on a timely basis.
Print the post