Oxus in principle agreement

KazakhGold Group Ltd
12 March 2007



12 March 2007


  KAZAKHGOLD ANNOUNCES AGREEMENT IN PRINCIPLE TO ACQUIRE CERTAIN OXUS ASSETS,
            BOARD REORGANISATION AND SENIOR MANAGEMENT APPOINTMENTS


KazakhGold Group Limited (LSE: KZG) is pleased to announce that it has today
agreed in principle with Oxus Gold PLC (LSE: OXS) to acquire certain of Oxus'
assets, subject to contract. These assets include:


•         The entire issued share capital of Norox Mining Company Limited
which, via its 66.67% holding in the Talas Gold Mining Company, owns the
substantially completed gold processing plant at the site of the Jerooy gold
project in Talas, Kyrgyzstan.


•         The remaining 50% of the issued share capital of Romaltyn Limited,
which KazakhGold acquired jointly with Oxus in November 2006.


•         Certain exploration assets in Turkey, currently owned by Oxus' 86%
owned subsidiary, Marakand Minerals Limited (LSE: MKD), subject to board
approval from Marakand.


The proposed acquisition is subject to a number of conditions, including
completion of satisfactory due diligence, the receipt of independent valuations
of the assets which is satisfactory to the Board of KazakhGold, the receipt of
all necessary regulatory approvals and consents and subject to completion of a
legally binding agreement.  In consideration for these assets, KazakhGold
proposes to issue, upon completion, up to a maximum of 3,541,666 new shares to
Oxus, representing approximately 7% of the enlarged share capital of KazakhGold
following the issue of the consideration shares.  The number of shares issued as
consideration will be subject to adjustment if any of the assets above are not
transferred to KazakhGold. The consideration, i.e. number of shares, will not be
subject to adjustment to reflect fluctuations in the KazakhGold share price


Additionally, KazakhGold has agreed in principle that it will pay Oxus up to a
further US$80 million in cash, payable in instalments, if it is awarded the
licence at Jerooy and commences development and production at the deposit.  Any
such payment is conditional, inter alia, on Oxus ceasing its ongoing litigation
regarding the Jerooy license.


KazakhGold also announces the following changes to its board structure and
strengthening of its management team:


•         Kanat Assaubayev, currently the Chief Executive Officer, is
appointed Executive Chairman of KazakhGold.


•         Peter Daresbury has stepped down from his position as Non-executive
Chairman.  He will continue to act as a Non-executive Director and member of the
Remuneration and Audit Committees.


•         Darryl Norton has agreed to join the Board as an Executive Director
and Joint Managing Director.  He will assume responsibility for production at
KazakhGold's principal mining operations, as well as heading the Company's
Investor Relations team. Mr Norton has over 24 years' experience in the
engineering and mining industry, gained most recently as Executive Director at
Oxus.  Prior to joining Oxus, Mr Norton spent 14 years at MAED Limited as
Projects Director, where he led major projects for gold mining companies such as
Durban Roodeport Deep, Anglogold and Oxus, for whom he led the construction and
commissioning of their Amantaytau Goldfields oxide project in Uzbekistan.  Prior
to joining MAED, Mr Norton worked on capital projects for Fluor, TWP, Bateman
and Gencor, including both surface and underground mining projects.


•         Steve Westhead (BSc, MSc, PhD, CGeol, FGS, MIMM) joins KazakhGold
from Oxus as Chief Geologist and Project Manager.  Prior to joining, Mr Westhead
acted as Group Chief Geologist & General Director of Oxus' Talas and Amantaytau
Gold projects


•         Geoff McLoughlin joins the company as Chief Metallurgist. Mr
McLoughlin was formerly Group Chief Metallurgist at Oxus Gold.


•         KazakhGold has resolved to appoint a further Non-Executive Director,
who it is intended will also act as Senior Independent Director.


•         The Company continues its search for a suitably qualified
English-speaking CFO, to be based in Stepnogorsk.


Speaking of the latest developments, outgoing Non-executive Chairman Peter
Daresbury said:


'Since KazakhGold's IPO in 2005 it has become clear to the Board that the role
of Chairman involves substantial day-to-day executive duties.  These include
operational oversight of mining activities and ongoing negotiations with
government authorities.  These functions necessarily require a full-time
presence at the company's headquarters in Stepnogorsk, in the Akmola oblast of
Kazakhstan.  The Board believes that a full-time Executive Chairman will be able
more effectively to represent the interests of KazakhGold shareholders in this
context.'


Newly appointed Executive Chairman, Kanat Assaubayev, commented on the
announcement:


'Firstly, I would like to thank Peter Daresbury for his tireless contribution to
KazakhGold in his role as Non-executive Chairman. His leadership, support and
guidance have proved invaluable during the Company's development in the period
following our IPO in November 2005 and we are delighted that he has decided to
offer his continued support to the company in his capacity as a Non-executive
Director.


The Board is taking steps to strengthen further the corporate governance at
KazakhGold by resolving to appoint an additional non-executive director as soon
as practicable.  Furthermore, the Board believes that the appointment of Darryl
Norton to the Board is a significant step forward in promoting greater
transparency and international management practices at KazakhGold. The presence
of a full-time Executive Director, with substantial international mining
experience, working alongside me in Stepnogorsk, will, the Directors believe,
substantially enhance the day-to-day accountability and transparency of the
Company. Additionally, with Mr Norton taking responsibility for our Investor
Relations function, we expect to see this area strengthen also.  These
capabilities will be reinforced further by the recruitment to our management
team of Steve Westhead and Geoff McLoughlin.


We are very excited about the potential acquisition of assets from Oxus Gold.
We believe that these will contribute to achieving our stated ambition of
becoming the leading gold producer in Central Asia.'


Conference Call:


Mr Aidar Assaubayev, Deputy Chief Executive of KazakhGold, will discuss the
company's latest developments and answer questions via a conference call
facility arranged for 10.00am London time on 12 March.


Those wishing to participate should telephone: 00 [phone]

Password: KazakhGold


A remote replay facility will be available from March 13 to midnight March 16

Please call:  00+44 (0) 20 7031 4064    Access Code: 742307


The company will also be making itself available for one-on-one meetings, please
contact your ING equity sales contact to discuss availability.


Further Information:


Mark Martin

ING

Tel:  00 [phone]



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