Oxus Gold unveils profit despite Uzbek dispute

Small cap miner Oxus Gold (OXS) swung back into the black during the first half of this year with a profit of over $25 million (£15.7 million).

The company, currently embroiled in a dispute with the Uzbek government, reported a profit of $25.03 million and earnings of 6.02 cents per share for the six months ended 30 June, compared to a loss of $2.72 million and loss of 0.70 cents per share for same period of 2010.

The profit for the period is after crediting $28.46 million in respect of the reversal of the impairment of the Khandiza project, the company said.

It added that total group assets increased to $79.30 million from $56.79 million at the end of December.

"The directors continue to undertake appropriate measures in order to preserve cash until such time as the group's operations are fully funded and the dispute with the Uzbek government has been resolved," Oxus said in a statement.

The company is embroiled in a dispute with the government and is seeking appropriate compensation for its 50% share in Amantaytau Goldfields (AGF) via either a negotiated settlement or international arbitration.

In January of this year, the Uzbek shareholders in AGF agreed in principle to acquire Oxus's 50% shareholding in AGF and in February, a detailed offer to the Uzbek shareholders was submitted. To date, no reply has been received and instead, AGF was subjected to an extensive financial audit by an audit commission appointed by the Uzbek government, Oxus said.

This prompted the company to declare force majeure in March after it became unable to manage the operational affairs of AGF.

In August, Oxus commenced international arbitration proceedings against the Uzbek government in order to seek appropriate compensation.

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