Resource definition drilling has confirmed the presence of a new oxide gold deposit at the Houay Yeng prospect, which is part of Oxiana’s Sepon Gold Project in Laos.

Step out drilling indicates mineralization remains open down dip, and along strike to the north. Initial metallurgical test work indicates high recoveries are expected.

Production at Sepon in 2007 exceeded forecasts with 102,390 ounces produced.

Mining was from Namkok East, Nalou and the Khanong ‘gold cap’. Rates increased in the last quarter of 2007 due to higher equipment utilization. The increased mining rate will continue in 2008 as mined head grades decline.

Milling also increased with favourable ore textures being processed and high availability of the plant with improved maintenance. Production in 2008 may decline marginally due to lower scheduled head grades but the target remains 90,000 to 100,000 ounces at a direct operating cash cost of US$450 to US$500 per ounce.

The current oxide gold reserves plus expected additions from existing and new resources such as Houay Yeng, and from transitional and stockpiled lower grade material, see oxide gold continuing potentially through 2010.

Drilling continues on the multiple gold targets at Sepon, both oxide and primary. The primary gold project is under review with further drilling targeting more ounces. The recent gold price increase has had a clear positive impact on project

economics and ideally the project can be scheduled to maximize the use of the existing gold production facilities and infrastructure.

At the Pha Vat prospect, resource drilling returned positive results in primary and oxide gold. Primary mineralization remains open to the east and south. Several holes also intersected supergene copper mineralization.

Recent drilling at Ban Mai indicates that the primary mineralization is discontinuous but has potential for higher grade zones.

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