The venture, Amantaytau Gold Fields (AGF), has been run as an equal venture by Oxus and the Uzbek government since 2003. Oxus has so far invested more than US$36 million in the factory in the Kyzylkum desert, Reuters reported.

The company, as it moves to Phase 2 of the project, said it had decided to modify the existing factory instead of building a new plant to process sulfide ore from an underground mine.

AGF currently extracts gold from an open pit mine, under Phase 1.

The revised project foresees increasing capital spending to US$139 million from an originally planned $88 million. Starting from mid-2009, gold production is expected to rise to 246,000 ounces a year from the initially planned 151,000 ounces.

"From mid 2010, combined gold production from the Phase 2 underground mine and the ongoing Phase 1 heap leach open pit mines is expected to exceed 300,000 ounces a year," the statement said.

AGF’s production fell sharply in the year between June 2006 and June 2007 to 59,373 ounces from 146,937 ounces in the previous period, after a local court hit the venture with back-tax claims for around US$224 million in October.

In February, Uzbek authorities dropped the charges after Oxus agreed to sell a 16 percent stake to Zeromax, a privately held Swiss-registered company actively