Oxus consultant shot in Kyrgyzstan

A consultant for British gold developer Oxus Gold (OXUSF-O, OXS-L) was shot and wounded in the Kyrgyz capital of Bishkek on Friday, sustaining injuries to his liver and kidney.

Sean Daley, who had been leading negotiations for Oxus in its dispute with the Kyrgyz government over development of the Jerooy gold deposit, had surgery to remove a kidney and was at the National Surgical Centre in Bishkek in critical condition. Police said his bodyguard had witnessed an ambush by “several people.”

Daley’s mother-in-law, Elena Bayalinova, was quoted in Central Asian news reports as having said he had received death threats.

Oxus, in a prepared statement, said it thought the shooting would not affect negotiations with the government, which revoked Oxus’s development licence late last year. The government said Oxus had not met the agreed development schedule for Jerooy, and released the state mining agency, Kyrgyzaltyn, to find another partner for the project. Oxus claims the government was ignoring a variation agreement made in 2004 that extended the schedule for developing the project.

Oxus had held 67% of Jerooy and the government’s gold-mining agency, Kyrgyzaltyn, the other 33%. The project, about 190 km southwest of Bishkek near Talas, was scheduled to be developed as a 180,000-oz.-per-year mine exploiting a reserve of 9.9 million tonnes grading 7.5 grams gold per tonne. Measured and indicated resources there are estimated at 17.3 million tonnes grading 3.4 grams gold per tonne, with another 8 million tonnes averaging 5.2 grams per tonne inferred.

Oxus had spent about US$46 million on the project before shutting it down.

Although talks between the government and Oxus continue, Oxus issued formal notice late in June that it would bring the dispute to arbitration under the Bilateral Investment Treaty between Britain and Kyrgyzstan.

Oxus says that Kyrgyz courts have enjoined the government not to transfer the Jerooy development rights to another party — said in some reports to be an Austrian-based company named Global Gold — and that the national parliament had resolved that the government should annul an agreement that would have brought in a different partner for Kyrgyzaltyn.

While neither the company nor the Kyrgyz authorities named a motive for the shooting, the implication that Daley was shot owing to his role in the dispute is not farfetched. The negotiations over the licence have been politically charged, and political violence has increased in the country in the last 18 months, since the “Tulip Revolution” protesting flawed elections toppled president Askar Akayev.

Four members of the Kyrgyz parliament have been killed in shootings since then, including Tynychbek Akmatbayev, older brother of suspected heroin-trade boss Rysbek Akmatbayev. At least two of the other politicians killed in the incidents were suspected of organized-crime connections.

The younger Akmatbayev was promptly elected to parliament; opposition politician Edil Baisalov, who had organized demonstrations against a court decision that legitimized Akmatbayev’s candidacy, was whacked and hospitalized three days after the election.