Interfax
October 10

Uzbekistan may hand the license to develop the Khandiza polymetals deposit in the Surkhandarya region to Britain's Oxus Mining Plc.

A senior official from the Uzbek Committee for Geology and Mineral Resources told Interfax that a cabinet resolution on this had been drafted and would be signed shortly.

Then, Oxus would start to draft a bankable feasibility study for the Khandiza project, the source said. The deposit will be developed either under a concession agreement or under a production-sharing agreement. This will be decided after the feasibility study has been finished.

In 2000, the Uzbek government and Oxus signed a preliminary concession agreement, however an agreement proper has not been signed.

Oxus has been exploring the Khandiza site for several years and has drafted a pre-feasibility study.

By preliminary counts, Khandiza contains 10 million tonnes of ore with an average content of 9% for zinc, 3.6% for lead, 1% for copper and 161 g/t for silver.

Oxus is thinking about building a facility to obtain zinc, copper and lead concentrates from 1 million tonnes of ore per year. The concentrates would contain 45,000 tonnes Zn, 20,000 tonnes Pb, 6,000 tonnes Cu and 40 tonnes Ag. Capital costs are tentatively $140 million-$170 million, but these have to be finalized by the bankable feasibility study.

Oxus plans to have the zinc and copper concentrates processed at the Almalyk mining and metals plant in Uzbekistan's Tashkent region and lead concentrate at metallurgical plants in Kazakhstan.

Oxus Resources was set up early in 1996 for mining projects in Central Asia. Australia's Normandy Mining was one of its biggest shareholders. This year, Normandy sold 14.1% of the company to Newmont Mining of the United States.

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