Oxus Gold PLC said its Amantaytau Goldfields project stands to make cash savings of some US$17 million after the Government of Uzbekistan granted tax deferrals to the Phase I Oxides development.

The deferred taxes and duties will become payable in 6 monthly instalments starting from 1 November 2008. This liability will be financed as part of the capital cost of the Phase II Sulphides Project, Oxus said.

It estimates the cash saving to Amantaytau Goldfields (AGF) during this 18 month period will be some US$970,000 per month.

AGF is also in the process of agreeing a new mechanism for recovering VAT paid, including an offset against various taxes currently payable. As a result, the group said restrictions previously imposed on AGF’s bank accounts have been largely reduced, and are expected to be removed altogether as these discussions are finalised.

Oxus CEO Bill Trew said the deferral of these taxes will have a significant impact on AGF’s current oxide operations, and the group now has every incentive to move the sulphides project forward as quickly as possible.

"We continue to assess the viability of a sulphide open pit as an extension to the existing Centralny oxide pit with a view to accelerating production from the sulphides and reducing initial capital costs," he added.

Trew said the Uzbek Government has given the group clear instructions to speed up the sulphides project and, all going well, it would hope to have first production from a sulphide open pit by the end of next year.