2nd joint venture agreemnt

5 Mar 2007 07:01

Celtic Resources Holdings PLC05 March 2007 FOR IMMEDIATE RELEASE 5 March 2007 Celtic Resources Holdings Plc ("Celtic" or "the Company") Second Joint Venture Agreement with AGL for the Development of the Tominskoye Copper and Gold Project in Russia The Directors of Celtic are pleased to announce that the Group has entered intoa second joint venture agreement to develop the Tominskoye copper and golddeposit in Russia, which was one of the assets of Eureka Mining Plc acquired byCeltic in December 2006. This new agreement follows the announcement in January2007 between the Company and AGL to develop the Miheevskoye copper and goldproject. Both resources are based in the Chelyabinsk region. Highlights €50/50 joint venture (JV) with Anime Global Limited ("AGL"), one of the investment vehicles of ICT Group - large Russian investment and production group •Sale of initial 25.49% of the interest in the project to AGL for US$ 3.64m in cash. Earn-in by AGL of further 24.51% by performing and completion of technical earn-in stages •All compliance, licensing and technical work including confirmation drilling for a bankable feasibility study to be carried out by Polymetal Engineering, a wholly owned subsidiary of Polymetal - the world's fifth largest silver producer and Russia's third largest gold producer •Polymetal Engineering's considerable knowledge and expertise will be brought to the JV which aims at completion of the bankable feasibility study in mid 2008 The JV will start immediately and develop an overall project plan which has thefollowing key objectives: • Initiate a technical evaluation to determine the best way to develop the asset • Complete a bankable standard feasibility study to international standards on the deposit, including all local permits, approvals and licenses in mid 2008 The joint venture is structured as a part cash contribution and performancebased earn-in steps, which will be fully funded by AGL. Following the finalearn-in step, AGL will own a fifty percent interest in the resource. Polymetal Engineering has been contracted to provide a range of services,including submitting Approved Permanent Conditions Report to the Russian StateCommittee for Mineral Resources ("GKZ"), preparing a definitive bankablefeasibility study for constructing a heap leach and copper recovery facility("Proekt") for oxide ores in accordance with Russian state standards andapprovals and a second bankable feasibility study with all necessary approvalsfor constructing a flotation plant for sulphide ores. Commenting on the JV, Kevin Foo, Managing Director of Celtic Resources said, "Weare delighted to have a second JV with AGL and look forward to activedevelopment of both of the Chelyabinsk projects. With copper prices still atcomfortable levels, we have two outstanding projects ready for furtherdevelopment in the heart of the Russian copper belt." Valery Tsyplakov, head of Polymetal Engineering, stated, "Polymetal Engineeringis pleased to be providing services to Celtic Resources on this excitingproject. We believe that our team of highly skilled engineers will be able tocontribute significant value to this project." Chelyabinsk - Tominskoye Copper Gold Project The Tominskoye copper/gold project is located at the Chelyabinsk Oblast inSouthern Russia, approximately 40km from Chelyabinsk. It has a Russian C1/C3resource of 241Mt averaging 0.58% copper and 0.12 g/t gold for 1.4Mt copper and0.93Moz gold. A scoping study was completed in May 2005. Celtic is prioritisingthis project in 2007 due to the attractive grades and infrastructure. ICT Group The ICT group of companies ("ICT") is a financial and production group, whichconsists of more than twenty companies and enterprises operating in varioussectors of the Russian economy. The Group's efforts are largely focused ondeveloping key areas of the economy such as mining, shipbuilding, mechanicalengineering, banking, real estate and transport logistics in order to expandRussia's position in the world market and achieve mid to long term profit. ICThas the benefit of advanced manufacturing sciences, world-class financial andengineering structures and highly qualified personnel, facilitating projectdevelopment from the investment stage to full-scale implementation unrestrictedby short-term market and political conditions and placing Russia as asignificant competitor in the global economy. Polymetal is a prime example of ICT's success within the mining sector of theRussian economy. Starting from scratch and working under severe conditions withlack of appropriate infrastructure, the company was established in less than 8years and is now one of the world's largest gold and silver mining companies Polymetal Engineering Polymetal Engineering employs more than 100 engineers and has successfullycompleted a range of projects for third party metals and mining companies, inaddition to in-house projects for Polymetal. Polymetal Engineering has extensiveexperience in all aspects of the mining process, including: compliance,licensing, design, engineering, metallurgy, geology, construction, processingand economic evaluation. For further information please contact: Kevin Foo / Jonathan Scott-Barrett Laurence ReadCeltic Resources Holdings Plc Conduit PRTel: + 44 (0)20 7921 8800 Tel: +44 (0)7979 955923Investors@celticresources.com leesa@conduitpr.com Frank Moxon / Simon EdwardsEvolution Securities LimitedTel: +44 (0) 20 7071 4300www.celticresources.com This information is provided by RNS The company news service from the London Stock Exchange