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Norilsk Buys $80M Stake in Russian Gold Mine from Celtic Resources
Created: 05.02.2006
MosNews
Celtic Resources has conceded defeat in a long-running battle for control of the potentially lucrative Nezhdaninskoye gold mine in Russia’s Far East, the Financial Times reported.
The Aim-listed group bought a 50 per cent stake in the South Verkhoyansk Mining Company, which owns Nezhdaninskoye, in 1997.
In 2000, Celtic Resources pledged a 30 per cent stake in SVMC to Zenit Bank of Russia as security for a loan.
Celtic Resources said it repaid the loan in full in 2002 but was told by Zenit that the shares had been transferred to a company in the Cayman Islands, then to the British Virgin Islands.
The identity of the owner of these companies remains a mystery.
Another blow came last September, when Alrosa, the Russian diamond group, sold its 50 per cent stake in SVMC to Polyus, the gold division of Norilsk Nickel of Russia, rather than Celtic Resources, as agreed.
Celtic Resources said yesterday that it would sell its remaining 20 per cent stake in SVMC to the Interros Group, Norilsk’s controlling shareholder, for $80m (?45.4m) plus a $10m loan repayment. The group said it had spent a total of $30m on the Nezhdaninskoye project so far.
Celtic Resources has also agreed to drop several court cases relating to the disputed 30 per cent stake in SVMC and to Alrosa’s deal with Polyus.
Kevin Foo, chairman of Celtic Resources, said he was pleased with the price as the group now had a sizeable acquisition war-chest. “We think we could have won (the court cases) but there was no guarantee and the company would have been in limbo for another 18 to 24 months. It has been sucking the energy out of us.”
Concern about Nezhdaninskoye had also been hurting Celtic’s shares. From more than 400p in the first half of 2005, they slipped below 190p late last year. Yesterday, they fell 5p to 230p.
Oxus Gold has also faced problems in the former Soviet Union. It lost its license to develop the Jerooy gold project in Kyrgyzstan after the government said Oxus had not fulfilled its investment promises.
