Martabe, North Sumatra, Indonesia

Following review of the recently completed Definitive Feasibility Study (DFS), Oxiana's Board approved development of the Martabe gold and silver project in December 2007. The Board approval is subject to the receipt of final permits from the Government of Indonesia, which are expected by April 2008.

The Martabe project is seen as one of the more promising undeveloped mineral deposits in Asia, containing extensive proven reserves of gold and silver.

The Martabe Contract of Work (CoW) covers a 2,500km² area, the most significant part of which is the Purnama deposit.

It is a sulphidation epithermal deposit, which was discovered in 1997 through regional stream sediment sampling by Normandy Anglo Asia Ltd. Since then other deposits have also been discovered and resources at Martabe now stand at 6 million ounces of gold and 60 million ounces of silver.

Oxiana became the owner of the Martabe project through the acquisition of Agincourt Resources Limited in early 2007.

The Martabe project is located close to existing infrastructure and facilities and is bisected by the Trans-Sumatra highway. Supplies of grid power and process water are available, and the port of Sibolga is approximately 30km from the site.

Subject to approvals the Martabe project will move into construction in 2008 and then into production at the end of 2009.

GEOLOGY AND RESERVES

Martabe's high sulphidation gold deposits exist within a sequence of tertiary volcanic and sedimentary rocks near a fault splay which is part of the Great Sumatran Fault complex. Episodic fault activity has been responsible for pulses of high-level magmatism and development of multi-stage phreatomagmatic breccias, flow dome complexes, hydrothermal alteration and gold mineralisation observed in the district. Gold mineralisation occurs in a number of deposits over a strike length of 7km.

The most significant and best defined of these is the Purnama deposit, where a resource of 66.7 million tonnes containing 1.74g/t Au and 21.5g/t Ag for a total of 3.7 million ounces of gold and 46 million ounces of silver has been defined by diamond drilling.

Two adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other virgin targets are expected to provide upside. Total resources are 6Moz of gold and 60Moz of silver. Reserves are 2.3Moz of gold and 30Moz of silver.

MINING

Mining of the Purnama deposit will be undertaken by conventional open-pit methods with a low average strip ratio of 0.7:1. The processing plant will be a large-scale ore processing plant. The plant and infrastructure will be designed to allow for future expansion.

ORE PROCESSING

Oxiana expects to be treating 4.5 million tonnes of ore per annum using proven SAG and ball milling, and carbon-in-leach (CIL) technology. Recoveries are expected to average 76% for gold and 55% for silver.

Production on average will be 250,000oz of gold and approximately 2Moz of silver per annum over an initial nine-year production life.

Martabe's development cost has been put at $310m and mining cash costs are estimated at $270/oz. First production is expected to start in December 2009.

THE FUTURE

The potential to discover mineralisation elsewhere in the CoW area is considered high and exploration is ongoing at a number of other prospects. Two adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other virgin targets are expected to provide upside.

A 5% interest is held in trust for local Indonesian stakeholders.