Central Asia Goldfields Corporation Raises $8 Million for Kazakstan Joint Venture.

TORONTO--(BUSINESS WIRE)--May 23, 1996--Central Asia Goldfields Corporation (ME: CGZ CGZ.PR.A ) announced today that it has assigned its 50 percent interest in the Gold Pool joint venture to a wholly owned private corporation and has raised $8 million in the subsidiary to meet the JV's financial obligations.

This financing was completed by the issuance of common shares to investors at $1.00 per common share, with Griffiths McBurney and Partners acting as agent under this offering. The Gold Pool JV, formed in December 1995, has been granted a Management Contract with an option to purchase the assets of the state-owned enterprise, Kazakhaltyn, and an exploration license consisting of two separate concessions - Vasilkovskoye and Taskara, which jointly cover approximately 13,000 sq. km. of prospective exploration ground near existing properties controlled by CGZ.

Following completion of the financing, Central Asia's interest in the subsidiary was reduced to 50 percent.

The Vasilkovskoye concession adjoins the Company's Kokshetau concession to the east and extends eastward to within 3 km. of the major Vasilkovskoye gold deposit (estimated resource - 13 million ounces). Preliminary information indicates the concession hosts at least 10 gold occurrences, two of which will be priority drill targets this summer. The Taskara concession is situated 15 km. northeast of the Company's Balkash concession in east-central Kazakstan. Both the Taskara and Balkash concessions will be drill- evaluated this summer.

After completing a preliminary due diligence review of the assets of Kazakhaltyn in March of this year, Central Asia elected to proceed with the Management Contract in order to direct control of the Kazakhaltyn assets. These consist of ten gold properties, including three mines which produced approximately 100,000 ounces in 1995 and are on a standby basis pending a review of operations. Analysis of the available technical data indicates that gold reserves of Kazakhaltyn approximate 4.6 million ounces, most of which are in the proven/probable category.

The Company is also pleased to announce that it has reached an agreement with its 50/50 Gold Pool JV partner, BSB, for an option to purchase one-half of BSB's 50 percent interest in the JV for 926,000 shares of Central Asia as consideration. This option agreement is subject to additional due diligence and regulatory approval.

Upon the conclusion of the two transactions outlined above, Central Asia's interest in the Gold Pool JV would remain at 50 percent accounted for by its 50 percent ownership in the subsidiary, which owns a 50 percent working interest in the JV, and the 25 percent carried interest optioned from BSB. Dr. John Hansuld, President of Central Asia, has stated that in his opinion "These two transactions offer shareholders of the Company the best of both worlds. We retain a direct and indirect interest in Gold Pool equal to 50 percent while the financial obligations of Central Asia as called for in the JV agreements are essentially covered".

Central Asia is a gold exploration company in Kazakstan, with interests varying from 50 percent-70 percent in over 11 million acres of exploration licenses held in three joint ventures. Preliminary field work and data compilation on the COT and Goldland JV's is nearing completion and several previously defined targets will be the subject of a major drill program commencing later this month. As of this date, the Company and its subsidiary have approximately $18 million in working capital.

CONTACT: Central Asia Goldfields Corporation

Ken Webb, 416/867-2936