[Blockierte Grafik: http://www.oxusgold.co.uk/images/oxus_logo.jpg]
Minews Story
Date: March 16, 2006
Oxus May Be Bringing Marakand In From The Cold
By Jack Hammer
Is it hubris or unbridled optimism that leads Oxus on in its dealings with the Kyrgyz government? Oxus states in its interim results, released recently, that Jerooy has now been 80 per cent completed “pending reinstatement”. This project has been “pending reinstatement” ever since it was suspended the first time back in 2004. The company has been confident ever since that Jerooy would be reinstated - getting on for two years later Oxus’ chief executive Bill Trew says: “Everybody’s accepted it’s an important issue that needs to be resolved. Both parties seem to be negotiating in good faith”. Executive director Richard Wilkins is out in Bishkek now, conducting the negotiations, although these haven’t been helped by an article which appeared on Oxus’s website falsely stating that the Kyrgyz prime minister had been convicted of stealing gold. [Blockierte Grafik: http://www.smiliemania.de/smilie132/00000285.gif] “It doesn’t help. I don’t think he’s forgiven me,” says Mr Trew, “But we’re still very hopeful of a solution at Jerooy.”
Oxus has plenty of other irons in the fire – it’s on the hunt for deals, profits are up, it’s building new mines, it has closed its hedge book, but Jerooy remains the litmus test. Analyst comment on the recent interims was muted – the only Oxus watcher who even bothered putting pen to paper was Charles Kernot at Seymour Pierce and all he wrote was a one-line remark noting that the results were “broadly in line with expectations”. In conversation he’s unequivocal, though: “The key, of course, is Jerooy”, he says. “The company might end up writing off the US$47million it’s spent, and that would materially affect my valuations”. Mr Kernot’s former protégé, Jonathan Guy at Seymour Pierce, thinks similarly: “The real issue with Oxus is, and will continue to be, Jerooy”. But both are supporters of Oxus. “From the headlines I’m quite relaxed”, says Mr Kernot. “The company should be on track to hit my US$11million forecast.”
With all that out in the open it’s interesting to contemplate what Bill Trew will do next. “We’re constantly trying to grow,” he says, and he means several things by that. More tonnes are going through at Amantaytau than ever before, although the number of ounces produced in the six months to December fell from last year’s 88,822 to 84,119 as grades and recoveries both dipped. But the company is now looking to mine down to the sulphides and has also just started mining silver and gold from the neighbouring Vysokovoltnoye project. That counts as three mines, and puts Mr Trew on track to meet his eye-catching 2004 target of building five mines in five years.
He’s moved on from there though. “That’s an old target,” he says, “and we’re very comfortable with it. But the new target is seven mines in seven years”. He highlights the recent appointment of former Anglo geologist Gordon Wylie whose purpose in Oxus is to get the company’s mineable reserve up to 10 million ounces. That goal will be more easily achieved if Mr Trew succeeds in his plans to bring in new assets. “We’re going to make a number of forays. We’ll be very, very aggressive on acquisitions over the next few months,” he says, although this time round it won’t be RAB’s Philip Richards pulling the strings. “Philip hasn’t got anything of interest to me at the moment,” he says, “but in the last couple of months we’ve been in discussions with 8 different companies”.
The recent stakebuilding in Marakand points one way forward. The plan there is to acquire a new asset and pair it up with Marakand’s Khandiza. “It wasn’t a mistake to spin out Marakand at the time,” Mr Trew reminisces, “I thought it was a good idea. But then I changed my mind. The market has no idea what it’s got there – there’s US$5billion worth of metals in the ground. But polymetallics are just not that sexy”. So it looks as though Marakand is coming back in from the cold.
