London-based developer Oxus Gold (OXUSF-O, OXS-L) says it is “reviewing its legal options” after the announcement from Kyrgyzstan that the state mining agency Kyrgyzaltyn had engaged a new joint-venture partner to develop the Jerooy gold deposit.
The joint-venture company, Jerooyaltyn, was reported to have released a statement that it had been awarded a development licence for Jerooy. Oxus said in an announcement to the market that it had heard nothing from the Kyrgyz government on the new licence.
Oxus, which had a 67% interest in a joint venture with Kyrgyzaltyn, had its development licence pulled in late 2005 when Kyrgyzaltyn claimed Oxus was not sticking to the development schedule for Jerooy. Subsequently, a court ruling enjoined Kyrgyzaltyn from transferring the Jerooy agreement to a third party, and a resolution of the Kyrgyz parliament instructed the government to annul an agreement Kyrgyzaltyn had made with Global Gold, an Austrian-based company that has now been named as the other shareholder in Jerooyaltyn.
Oxus had taken the dispute to arbitration under the provisions of an investment treaty between Kyrgyzstan and the United Kingdom.
Oxus now says it has presented a proposal to dilute its own interest in the joint venture to 50%, but to retain management control, to increase its contribution to a regional development fund, and to bring the project into production in six months.
The project has caused considerable controversy in Kyrgyzstan, and possibly violence. Sean Daley, a British national resident in Kyrgyzstan who had been conducting negotiations for Oxus, was shot and critically injured July 7 outside his home in Bishkek, in an evident hit job.
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