31st January 2007
Kerman and Co acted for Celtic Resource Holdings in establishing a joint venture agreement to develop the Miheevskoye copper and gold deposit in Russia, one of the assets of Eureka Mining Plc which was acquired by Celtic 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 feasibilitystudy by year end and first copper
production from oxide ores in 2008.
The JV will start immediately and develop an overall project plan which has three 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 performance based earn-in steps, which will be fully funded by AGL. Both the cash and earn-in steps are based on the successful completion of each phase. Following the final phase, AGL will own a 50% interest in the resource. The total amount of cash and earn-in shares will be approximately $16m.
Michael Bennett and Keith Dempster of Kerman & Co LLP acted for Celtic Resources Holdings Plc