Oxus Gold – The wait is very very nearly over.

Oxus gold has been involved in a long, multi-year arbitration battle with the Uzbek government concerning the alleged illegal forced removal of Oxus Gold from its major gold licenses.

The BOD of Oxus have to be congratulated for the way that they have behaved and acted during this process. After last year’s drawdown facility with Darwin, many feared constant dilution whilst the BOD received hefty wages as the expense of shareholder dilution.

The truth is that Oxus has used less than half of the allocated drawdown facility, always seeking to minimise dilution. Now there might be a selfish aspect to this in that the BOD’s own shareholdings would be diluted and so a win will mean less. But it nether the less indicates strongly that the BOD have both a high level of confidence and a high level of shareholder responsibility.

The final hearing of the OXUS v Uzbekistan arbitration was held in Paris earlier this spring and lasted several days. Average times for such arbitration cases to go from this final hearing stage for the 3 strong arbitration panel to come to its initial decision is approx. 2-3 months over the past year.

It is an indication that perhaps a decision is coming very very soon.

In conjunction with this, the Uzbek defence as presented by White & Case seems to be one of its a rogue outfit operating outside of the Uzbek legal framework, granting the licenses in the first place with bribery taking place for Oxus to get the licenses.  The defence of White & Case is one of denial that Oxus owned the licenses legally in the first place and that a mixture of ineptitude and incompetence has caused the current situation.

As well as the defence outlined above the Uzbek’s have a second fall back strategy of offering Oxus $150m which has been raised through the sale and confiscation of Gulnara’s assets. The President of Uzbekistan has laid all the blame on his Daughter for finding the Uzbek Government in its current predicament and she must pay the price according to the presidents tribal supporters. In a bid to further reduce any possible payment, the Uzbekistan Government has blamed the current detention of Said Ashurov on a dysfunctional regional government and promised to look into the matter of his detention, i.e if an offer is made to Oxus it will include Said’s freedom.

It is not yet clear whether the offer will be made prior to the announcement of the judgement or within a few weeks after the judgement, this approach seems to be the modus operandi of White & Case for the last 12 months.

Remember the likely timeline is final hearing,  judgement announcement, award announcement and costs announcement.