Oxiana will develop the Martabe gold and silver project in the Indonesian Province of North Sumatra.

The decision was made after reviewing the recently completed Definitive Feasibility Study (DFS) but is subject to the receipt of final permits from the Government of Indonesia, which are expected by April.

Oxiana's decision allows the project to proceed on a fast-track time line leading to commissioning in December 2009. The capital cost of the project is estimated at US$310 million while average annual total cash costs of production are estimated at US$270 per ounce.

The Martabe DFS was based on the single Purnama deposit which has an initially identified mine life of nine years with annual production of 200,000 ounces of gold and 2 million ounces of silver. Two other adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other un-explored areas of Oxiana's tenement represent significant upside potential.

Martabe not only adds to Oxiana's production pipeline but establishes a significant presence for Oxiana in Indonesia, one of the world's most mineralized and highly prospective domains.

The Martabe project is on the western side of the island of Sumatra in the Province of North Sumatra, close to the town of Sibolga. The project is established under a sixth generation Contract of Work (CoW) signed in April 1997 which defines all of the terms, conditions and obligations of Oxiana and the Government of Indonesia for the life of the CoW.

The total resource base at Martabe is 5.8 million ounces of gold and 60 million ounces of silver, including 4.4 million ounces at the Purnama deposit and 1.4 million at the Baskara and Pelangi deposits. At Purnama, Probable Reserves of 2.3 million ounces of gold and 30.1 million ounces of silver have been estimated as part of the DFS.

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