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By John Helmer in Moscow

Another Xmas mystery at Oxus – CEO leaves, unlocks value.

The idea that Santa Claus brings presents to those who deserve them comes from the original St. Nicholas, a bishop of the Byzantine era. He was famous for his gifts to the poor, in particular presenting the three miserable daughters of a pious Christian in the diocese with dowries, so that they would not have to become prostitutes. Names and addresses aren’t given.

The deal also made Nicholas the patron saint of those who specialize in giving with one hand, and taking with the other – pawnbrokers.

The Christmas mysteries at Oxus Gold, the London-listed junior, have been chronicled by Mineweb as the share price collapsed in November on no news, and then hesitated with two announcements from hedge fund, RAB Capital Special Situations, that it was buying Oxus shares (November 26), then selling them (December 10). Accompanying RABcap’s moves, the management of Oxus has been assuring the market that all is stable.

Then, just before 11 o’clock on Friday, December 21, the company revealed that its chief executive officer, William Trew, was suddenly leaving, and would be replaced as soon as the holidays are over.

The Oxus announcement said: “With effect from 7 January 2008 Richard Wilkins will be appointed Chief Executive Officer and Jonathan Kipps will be appointed Company Secretary in addition to his current role as Finance Director. William Trew will be stepping down as Chief Executive Officer and resigning as a director of Oxus in order to pursue other business interests.”

“In addition, Miradil Djalalov, the managing director of Zeromax GmbH (‘Zeromax’), the Company’s strategic alliance partner in Uzbekistan, will join the board as a non-executive director.”

For the past year, since Zeromax warded off back-tax claims and other signs of takeover interest in Oxus’s mine properties in Uzbekistan, Zeromax has held a 16% stake in the company, but no seat on the board. Instead, the company vice president in charge of corporate development, Harry Eustace, appears to have been a Zeromax nominee. Since December 10, according to a buyout option agreed between Zeromax and RabCap, Zeromax is to acquire RABCap shares and become the controlling shareholder of the company, with 29%.

Apart from the customary thank-you, there has been no further explanation of Trew’s departure. Nor is there a report to shareholders of what he may have agreed with the board, or the principal shareholders, regarding the disposal of the shareholding Trew holds in Oxus. At last information, this appears to be 16.1 million shares, or 4.4%, with a current value of GBP6.3 million. Trew’s other business interests are not exactly unrelated to Oxus, for he is already working with KazakhGold. This is the Kazakhstan-based goldminer, which took over Oxus’s stake in the Jerooy project in Kyrgyzstan. According to Oxus reports, in June 2007, it traded its stake in the seized project rights for shares in KazakhGold worth $73 million, and potential deferred cash of up to $80 million, in the event KazakhGold manages to persuade the Kyrgyz government to restore the mining and operating rights at Jerooy.

As Mineweb has already reported, the share price charts for Oxus have been very peculiar for weeks; the effect of news of Trew’s departure has proved to be no exception.

On trading of about 5 million shares, the Oxus share price hit its 12-month bottom of 25.5 pence on November 29, three days after RABCap claimed it was lifting its stake in the company. It then climbed to 40 pence, on volume traded of about 11 million shares. The disclosure that Zeromax and RABCap had agreed on an option to double the share price to 80p then caused another dive in the price to December 18, when something, at a very low volume of trade, began to revive the price.

Although the unanticipated departures of chief executives are usually negative for market sentiment, the Trew exit added 5 pence to the share on Friday, and another fourpence on Monday, Christmas Eve, making 39.25p. Altogether, if the news is related to the share price movement, the departure of Trew has added almost 20%, or about 30 million pounds, to the value of Oxus.

A takeover of both the control shareholding, and of Oxus management by Zeromax, appears to be the Christmas box a sceptical market has been hoping will unlock Oxus value in Uzbekistan. Current proven and probable reserves listed by Oxus are 1.49 million oz of gold; 3.4 million oz of silver. For Zeromax, a share price of 80p indicates a valuation of the company at GBP292.3 million, or almost $600 million.

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