KazakhGold JV Wins Gold Plant

RNS Number:6444M
KazakhGold Group Ltd
24 November 2006

                                                               November 24, 2006



               KazakhGold-Oxus Joint Venture Successfully Bids For
                    Transgold Plant And Deposits In Romania

     
*    Plant And Related Assets Acquired For US$6.99 Million

*    New 50:50 Romaltyn JV Set Up To Manage Project

*    Low Cost High Return Cash Generative Gold Venture


KazakhGold Group Limited (London: KZG) announces that, together with AIM-listed
Oxus Gold, it has successfully bid US$6.99 million (inclusive of US$1.12m VAT)
in open auction for the assets of a gold project in Romania that were put into
in liquidation in April, 2005. The newly formed 50:50 joint venture, Romaltyn,
expects to recommission the project and bring it back into production in
approximately six months time.  The project offers the potential to generate
rapid payback on investment and provides an opportunity for exploration and
development of additional resources in the area.

The assets include a 2.5mt/yr gold treatment plant, formerly operated by
Transgold, a 50:50 joint venture company between Eurogold and Remin, the
Romanian state mining company.  The plant, located on the outskirts of the town
of Baia Mare, ceased operation in 2005 when the tailings line froze and
insufficient funds were available to rectify the problem.

Other assets acquired by the Romaltyn JV are the 8.5m tonnes Central Tailings
dump located 7.8km from the plant, together with stockpiled gold-bearing pyrite
resources and two exploration tenements, Sophia and June 11, over which 12-month
exploration licences will be re-instated.

In a second auction, the two JV companies paid US$300,000 for Explorer SA, a
company in voluntary liquidation which holds three further exploration tenements
in the area, the largest of which, Rascau South East, has a three-year
exploration licence.

The Transgold plant was designed and built by Lycopodium for US$28m and has an
estimated replacement cost of around US$40m.  The JV estimates that it can be
brought back into production after expenditure of approximately US$5.25m on
clean-up, minor repairs and the replacement of some equipment. Thus the total
financial commitment by the joint venture is estimated to be US$12.54m.








Once recommissioned, the plant would treat approximately 2m tonnes of tailings
in the first year.  The average recoverable gold grade of this material is
estimated at 0.48g/t gold which, at a gold price of US$620/oz, would generate
revenues of US$19m and a healthy operating margin.

The auction process on behalf of the joint bidders was led by John Cutler, chief
executive of MAED Ltd, the international engineering group specialising in the
design, construction and operation of process plants for a broad spectrum of
metals.  MAED will be leading the rehabilitation and recommissioning of the
Transgold plant before handing over the project to the joint venture management
team

Oxus Gold has been interested in acquiring the Baia Mare plant for some time and
has a thorough understanding of its capabilities.  KazakhGold visited the plant
in 2002 whilst investigating the possibility of establishing a working
relationship with Eurogold.

Commenting today, Dr Kanat Assaubayev, President of KazakhGold, said: "Although
the key focus for the KazakhGold management team is developing the mines at the
three main deposits, Aksu, Bestobet and Zholymbet in Kazakhstan, today's
announcement represents a small exciting joint venture opportunity which we are
confident will achieve high returns."



Further information:

Ron Marshman/John Greenhalgh
City of London PR Limited
Tel: 020-7628-5518



Conference Call

Mr Aidar Assaubayev, Deputy Chief Executive of KazakhGold, will be explaining
the rationale behind the bid and answering questions via a conference call
facility arranged for 11.00am London time today.

Those wishing to participate should telephone:  00 +44 7162 9962  PIN: 729331#


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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