Cerillion Regulatory News (CER)

31 Jan 2007 07:01

Celtic Resources Holdings PLC31 January 2007 FOR IMMEDIATE RELEASE 31 January 2007 Celtic Resources Holdings Plc ("Celtic" or "the Company") Joint Venture Agreement for the Development of the Miheevskoye Copper and Gold Project in Russia The Directors of Celtic are pleased to announce that the Company has enteredinto a joint venture agreement to develop the Miheevskoye copper and golddeposit in Russia, one of the assets of Eureka Mining Plc which was acquired byCeltic in December 2006. Highlights €50/50 joint venture (JV) with Anime Global Limited ("AGL"). •AGL's contribution to the joint venture valued at US$16m including US$10m in cash. •All compliance, licensing and technical work including confirmatory drilling for a bankable feasibility study to be carried out by Polymetal Engineering a company owned by Polymetal, Russia's largest silver producer and third largest gold producer. •Russian knowledge and expertise will be brought to the JV which aims at completion of the bankable feasibility study by year end and first copper production from oxide ores in 2008. The JV will start immediately and develop an overall project plan which hasthree key objectives: • Complete a bankable standard feasibility study on the deposit, including all local permits, approvals and licenses by the end of 2007 • Define a fast track process that enables early copper production from treatment of oxide ores using the heap leaching and solvent extraction - electro winning (SX-EW) process • Define the optimum mine and process plant size for initial production of concentrates from sulphide ores and future expansion plans The joint venture is structured as a part cash contribution and performancebased earn-in steps, which will be fully funded by AGL. Both the cash andearn-in steps are based on the successful completion of each phase. Followingthe final phase, AGL will own a 50% interest in the resource. The total amountof cash and earn-in shares will be approximately $16m. Polymetal Engineering, a fully owned subsidiary of Polymetal, has beencontracted to execute the plans of the JV, including obtaining revised licenseconditions, submission of the Approved Permanent Conditions Report to theRussian State Committee for Mineral Resources ("GKZ"), preparation of adefinitive bankable feasibility study for the construction of a heap leachfacility ("Proekt") with full government approval in accordance with Russianstate standards and a bankable feasibility study with all the necessaryapprovals to construct a flotation plant. Chelyabinsk - Miheevskoye Copper Gold Project This project is a large copper-gold/porphyry deposit located at Miheevskoye some250 km from Chelyabinsk, within the Chelyabinsk Oblast of Southern Russia. Apre-feasibility study ("PFS") was completed in July 2006 which provided a totalIndicated Resource to JORC standards of 373.5 million tonnes averaging 0.38 percent copper and 0.10 grams per tonne of gold, containing 1.42 million tonnes ofcopper and 1.20 million ounces of gold. In addition, there is an InferredResource of 52.1 million tonnes containing 0.31 per cent copper and 0.07 gramsper tonne of gold. Polymetal Polymetal, which is wholly owned by Nafta Moscow, has 4 producing mines, 3development projects and 10 exploration projects and has more than 4,000employees. In 2005, Polymetal was the world's fifth largest silver producer andthe number one global primary silver producer, with more than 18 million ouncesof silver produced. Polymetal Engineering has extensive experience in all aspects of the miningprocess including compliance, licensing, design, engineering, metallurgy,geology, construction, processing and economic evaluation. Polymetal Engineeringhas completed a range of projects for third party metals and mining companies,in addition to projects completed for the Polymetal Group. Commenting on the JV, Kevin Foo, Managing Director of Celtic Resources said, "Weare delighted to have the support of Polymetal Engineering in this JV. We lookforward to actively developing the project and meeting the objectives of earlyproduction and a bankable feasibility study by year end." Valery Tsyplakov, head of Polymetal Engineering, stated, "We are pleased to beworking with Celtic Resources on this exciting project. We believe that we willbe able to contribute significant value to this project." 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 This information is provided by RNS The company news service from the London Stock Exchange