Goskomgeology and NMMC; and (2) notice dated 28 June 2011 from Goskomgeology(collectively the
).The purpose of this letter is to correct certain factual assertions contained in the Notices thatare patently erroneous and, indeed, appear calculated as a pretext for Goskomgeology and NMMC to avoid engaging in meaningful negotiations with Oxus. This letter focuses primarily on the most egregious of those errors, and any failure to address other erroneousinformation in the Notices should not be construed as an admission or acceptance of their substance. To the extent allegations in the Notices directed against Oxus are not specificallyaddressed below, such allegations are denied, and any liability on the part of Oxus isexpressly rejected.Further, we reject any notion that Goskomgeology and NMMC are somehow separate fromthe Uzbek government. Those entities have at all relevant times been controlled directly bythe Uzbek government, and they lack any semblance of independence. Accordingly, for purposes of this dispute, we consider Goskomgeology, NMMC and the Government of Uzbekistan to be inseparable and interchangeable.
Failure by Goskomgeology and NMMC to Negotiate in Good Faith
As you are probably aware, Oxus participated in a series of meetings in January 2011 withthe Uzbek shareholders of Amantaytau Goldfields A.O. (
), who repeatedly assuredOxus that Goskomgeology and NMMC would engage in
negotiations toward anamicable settlement. Further, on 27 January 2011, Mr Ilkhombai BekchanovichTuramuratov, Vice-Chairman of Goskomgeology, stated that he had been authorised by theMinistry of Finance to negotiate a “peaceful” settlement.In reliance on those assurances, Oxus made a written offer on 3 February 2011 for the sale of its stake in AGF. As a demonstration of good faith, Oxus based its offer upon valuesassigned by the Uzbek shareholders, rather than the substantially higher – albeit fully justifiable – market valuations for the company. Mr Turamuratov assured Oxus duringmeetings on 15 February 2011 that the Uzbek government was evaluating Oxus’ offer andwould respond in writing within two days, yet almost four months later, the Uzbek government has failed to respond.Instead, Goskomgeology and NMMC have focused inexorably upon involuntary liquidationfor AGF, against the best interest of the company, and contrary to the express wishes of Oxus and applicable legal criteria. Indeed, Oxus has proposed several options under whichthe company could operate viably in the future, including offers in December 2010 andFebruary 2011 to purchase or sell 50% of AGF, as an alternative to the current jointoperation of the company. In this context, repeated public allegations by various Uzbek officials that Oxus has not offered any genuine proposals of settlement clearly demonstratesthe Uzbek government’s antagonism toward
settlement discussions. Notwithstanding the Uzbek government’s recalcitrance, Oxus remains willing to engage inconstructive dialogue to discuss its written offer of 3 February 2011. We are confident thatyou understand – given the repeated threats made against Oxus’ staff and the continueddetention of one of its employees – why we have insisted that any such discussions take place outside of Uzbekistan and in the presence of legal counsel. Further, Oxus is not willingto discuss the liquidity of AGF or its potential liquidation separately from comprehensivesettlement discussions.
Investment by Oxus
Contrary to what the Notices suggest, Oxus has invested millions of dollars and committedsubstantial technical and scientific expertise over several years of operations in Uzbekistan.One of only a handful of western investors, Oxus substantially advanced the mining industryin Uzbekistan by introducing western technology and expertise to the country. Despitesuffering numerous unexpected setbacks – largely occasioned by the conduct of the Uzbek