Business
Sale of gold mine interest
Sale of gold mine interest.
About this update from Cerillion Plc
[{"type":"text","content":"\n Celtic Resources Holdings PLC\n03 February 2006\n\n\n Celtic Resources Holdings Plc\n \n Sale of interest in Nezhdaninskoye raises US$80 million\n \n Future plans outlined\n \nCeltic Resources Holdings Plc (\"Celtic\" or \"the Company\") today announces that \nit has agreed to sell 20% of The South Verkhoyansk Mining Company (\"SVMC\") for \nUS$80 million cash. SVMC is the holder of the license for the Nezhdaninskoye \ngold mine in Yakutia, Russia (\"Nezhdaninskoye\").\n\nThe Company has had productive discussions on the future of Nezhdaninskoye with\nInterros Group, one of Russia's largest private investment companies and a\ncontrolling shareholder in Norilsk Nickel and Polyus. As a result of these\ndiscussions, KM Technologies (Overseas) Limited, an investment vehicle for the\nInterros Group, has made the cash offer. The transaction is conditional on\nCeltic withdrawing all legal actions concerning the disputed ownership in\nNezhdaninskoye. In addition to the cash consideration, Celtic expects to receive\nthe repayment of the principal component of the debts owed by SVMC to Celtic\ntotalling approximately US$10 million.\n\nFollowing discussions with the Company's advisers, the board of Celtic has\nunanimously decided that its acceptance of the cash offer is in the best\ninterests of Celtic and its shareholders. The US$80 million will be held in\nescrow and released to the Company conditional upon the withdrawal of all legal\nactions by Celtic in relation to the ownership of Nezhdaninskoye, which is\nexpected to occur by 31st March 2006.\n\nWhilst its goal of developing Nezhdaninskoye has not been met, the Company\nrecognises that a cash return of this magnitude in the current business climate\nin Russia is exceptional and very much in the best interests of shareholders.\nCeltic's total investment in Nezhdaninskoye to date has been approximately US$30\nmillion.\n\nCeltic has always maintained, and continues to do so, that it owns 50% of SVMC,\nbut third parties laid claim to 60% of this interest. Full details of these\ndisputes were provided by the Company on 6th October and 24th November 2005. For\nalmost three years, Celtic has been in negotiations with various parties,\nprincipally IG Alrosa, relating to the future of the Nezhdaninskoye mine and\nwhilst doing so, had agreed to postpone legal actions concerning the dispute...