Monday, 6th February 2006 (2614 views)

Celtic Resources has sold its remaining 20 per cent stake in South Verkhoyansk Mining Company (SVMC), signalling an end to the long-running dispute concerning its ownership.

SVMC owns the Nezhdaninskoye gold mine in the far east of Russia, which is the country's second-largest gold deposit. Its resource base is thought to be around 900 tons of gold.

London-listed Celtic has sold its share of SVMC to the Interros Group for $80 million plus a $10 million loan repayment.

Celtic shares dipped slightly in price (delete) at the news, but analysts considered that the deal was good for both sides. Renaissance Capital's Rob Edwards said: "I think the price that Celtic got is extremely generous".

Aton brokerage noted that the deal would allow Celtic to focus on business development, as the drawn-out ownership battle comes to an end.

Celtic originally bought a 50 per cent stake in SVMC in 1997, and then pledged a 30 per cent stake loan to Zenit Bank of Russia in 2000.

Celtic claimed to have repaid the loan in full, but according to Zenit the shares had been transferred to a company in the Cayman Islands.

Celtic Resources chairman Kevin Foo said that the subsequent ownership dispute had been "sucking the energy out of us".

 

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