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Oxus Gold secures £3m equity facility with Darwin Strategic Limited

Published: 10:57 20 Aug 2012 BST

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Oxus Gold (LON:OXS) has secured a £3 million equity financing facility with Darwin Strategic Limited, a majority owned subsidiary of Henderson Global Investors' Alphagen Volantis fund, to cover its working capital requirements.

The facility, which can be drawn down within 36 months of August 20, will complement the company's litigation funding agreed with Calunius in March this year and provide it with a "long-term flexible source of funding".

Oxus is currently in the midst of a US$400 million battle with the Uzbekistan government over the sale of its 50 per cent stake in the Amantaytau Goldfields (AGF) mining operation in that country.

The deal was with two state backed mining companies, which already owned the other 50 per cent stake in the AGF venture.

The transaction value was not agreed at that time. And subsequently the state-backed buyers initiated an audit to determine a value for the deal.

However Oxus later declared ‘force majeure’ over the assets.

Oxus says the audit was not evaluating the assets of AGF in good faith and instead it appeared to be using the process to find reasons to justify putting AGF into liquidation.

In August 2011, the company commenced international arbitration proceedings, requesting that damages be proven and quantified through the proceedings.

Calunius, a specialist investment company agreed to pay the costs related to its international arbitration proceedings against the Uzbek government.

This arrangement is on a non-recourse basis - which essentially means it is a ‘no win, no fee’ deal.

Under its terms, Calunius will receive a material portion of any settlement of the arbitration claim.

“We are very pleased that Darwin has agreed to provide an equity finance facility to the company,” said chairman of Oxus Gold Richard Shead.

“This funding arrangement provides Oxus Gold with a long-term flexible source of funding, which can be accessed at the company's discretion and will complement the litigation funding arrangements which we put in place with Calunius.”

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