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Gold/Mining/Energy : WWS.T World Wide Minerals -- Ignore unavailable to you. Want to Upgrade?

To: tango who wrote (606)	10/23/1998 2:47:00 PM
From: Alex Harrington	Read Replies (1) \| Respond to of 784

Perhaps of interest? Kazakstan Goldfields Re-commences US$64.8 Million Claim Against Kazakhstan Government Canadian Dealing Network Symbol: KGFC Common Shares Outstanding: 36,221,544 TORONTO, Oct. 23 /CNW/ - Kazakstan Goldfields Corporation (KGFC-CDN) announces that as a result of the complete lack of response by the Government of Kazakhstan to company efforts to continue negotiations to settle its dispute with the Government, management has decided to re-commence arbitration proceedings against the Government of Kazakhstan. The initial Claim for US$28.6 million was filed by its 75% owned Kazakhstani subsidiary, Gold Pool LLP, against the Government in November, 1997 in the International Bureau of the Permanent Court of Arbitration in The Hague and relates to the unilateral cancellation by the Government of the company's management contract to manage, with the option to purchase, the gold mining operations of the state owned company JSC Kazakhaltyn. The termination of the contract in August, 1997 came five months after the Company notified the Government of its intention to exercise its option to acquire the mines and assume full ownership. Under the terms of the Contract, the Company was to invest a minimum of US$15 million on the mining properties by April 10, 1997, and in fact invested a total of $18.6 million prior to giving formal notice of its intent to convert to ownership of the properties. The Contract specifically provides that the Government cannot terminate the Contract once it has received this notice from the Company. In addition, the Company also claimed for the return of gold in concentrates owned by it valued at US$1.1 million which were in process at the then State-owned Balkhash smelter when it was shut down, and which continue to be retained despite a change in ownership of this facility. The Claim will be adjusted to account for additional interest and penalty charges accruing (as permitted under the Kazakhstani law) since the initial filing until the end of October resulting in an amended Claim of US$64.8 million. The Claim will increase by approximately US$36 million per year until a settlement is obtained. At the request of the Government of Kazakhstan early this year, the company temporarily suspended further action on the arbitration Claim and commenced discussions with the Government for the purpose of reaching a negotiated out-of-court settlement. In June, the Government, at the direction of the Prime Minister, Mr. Balgimbaev, appointed a working group of officials to conduct negotiations with Gold Pool and another Canadian company specifically to settle their respective disputes. In July, 1998, Gold Pool was advised by the chairman of the working group that the group was reviewing the Claim and was re-assessing whether or not the Government wished to continue the negotiations and that the company would be advised within one week about the Government's decision regarding their willingness to continue discussions. However, the company has received no further official communication from the Government of Kazakhstan since July in spite of numerous written and oral requests by the company for a response. In addition, representations have been made to the Government of Kazakhstan by the Canadian Embassy in Kazakhstan on behalf of the company. Mr. Tom Griffis, Chairman of KGFC, stated, ''We are very disappointed to be forced into a position to take this route because we had sincerely hoped that initial progress in negotiations could be carried through to an acceptable conclusion for both parties without having to revert to litigation. This does not reflect well on Kazakhstan and unfortunately will be another blow for the investment climate of the country, especially in the mining sector. But we had no choice under the circumstances and the Government was given every opportunity to respond to the company during the past three months but failed to do so.'' Since the Government of Kazakhstan has given no indication that it still wishes to negotiate a settlement, it is the view of management that the interests of the shareholders of the company would best be served by re-commencing and following through with the Claim through the court process. -30- For further information: A. Thomas Griffis, Chairman of the Board or Dennis Dash, Director @ (416) 867-3979.