Companies: OXS   

Aim-listed Oxus Mining claims to have finally clinched the last piece of financing for its Amantaytau gold project in the central Asian republic of Uzbekistan with a $23 million (£15.3 million) loan from Société Generale. Robert Tyerman reports.

Chief executive Roger Turner says the latest Soc Gen loan will provide Oxus with funds to pay for its share of the $41.3 million estimated cost of bringing Amantaytau into production. The firm, which says 3 million oz of minable gold reserves have been established, is advancing the money to its 50 per cent-owned operating subsidiary, Amantaytau Goldfields.

A syndicate of banks led by Soc Gen recently agreed to provide $31 million of project finance to Amantaytau Goldfields. This comes in the form of a $26 million term loan and a $5 million cost overrun facility.

Oxus must pay $2.5 million (£1.7 million) upfront to cover three years of pre-paid interest on the $23 million Soc Gen loan announced today, and four years of political and country risk insurance premiums to guarantee it. The insurance comes from an unnamed 'AA-rated guarantor'.

Turner says the Amantaytau project was planned with an assumed gold price of $260 an oz – $50 or more below the current market price – with cash costs of less than $100 an oz. Construction contracts have been signed and the company says it should start full production, at a predicted rate of 175,000 oz a year, in 12 months.

According to Turner, Oxus reckons Amantaytau could have a gold resource of 6 million oz on the basis of drilling so far. He argues that more drilling should increase that. Turner points to estimates from the days when Uzbekistan was part of the Soviet Union that suggested a resource of 15 million oz.

Oxus shares were hit when a previous £8 million funding at 30p was seen to be inadequate. And the firm has had problems elsewhere, especially with the licence for its Jerooy project in Kyrgyzstan. This morning the loan news sent the price up 0.25p to 11p.