Jerooy in new hands (February 05, 2007)

The Kyrgyz government has issued a licence for development of the Jerooy gold deposit to a joint venture of state mining agency Kyrgyzaltyn and Austrian-domiciled company Global Gold Holding, further frustrating the ambitions of London-listed Oxus Gold (OXUSF-O, OXS-L).

Global owns 60% and Kyrgyzatlyn 40% of the new joint-venture company, Jerooy Altyn (Jerooy Gold).

Oxus, which had been a 67% partner in another joint venture with Kyrgyzaltyn, Talas Gold Mining, has been frozen out of the Jerooy property since late 2005 when the Kyrgyz government lifted Talas’s licence. The government cited a dispute with Kyrgyzaltyn over the development schedule for Jerooy. Oxus sought arbitration and entered further negotiations with Kyrgyzaltyn and the government, but had no success.

The affair turned bloody in July when Sean Daley, a British national acting as a negotiator for Oxus, was shot outside his apartment in Bishkek during negotiations over the licence. In September, the Kyrgyz government seized buildings on the Jerooy property.