Celtic to sell Russian mining company

Mining company Celtic Resources Holdings has agreed to sell 20% of The South Verkhoyansk Mining Company ("SVMC") for $80m (€66.3m) cash.

SVMC is the holder of the license for the Nezhdaninskoye gold mine in Yakutia, Russia.

The transaction is conditional on Celtic withdrawing all legal actions concerning a disputed ownership in Nezhdaninskoye. In addition to the cash consideration, Celtic expects to receive the repayment of the principal component of the debts owed by SVMC to Celtic totalling approximately $10m (€8.3m).

"Whilst its goal of developing Nezhdaninskoye has not been met, the company recognises that a cash return of this magnitude in the current business climate in Russia is exceptional and very much in the best interests of shareholders," Celtic said today.

"Whilst the company believes that the continuation of the legal cases would have eventually resolved the ownership dispute in Nezhdaninskoye in its favour, this process could have taken between 18 and 24 months to complete, at substantial financial and managerial cost to the Company and with no guarantee of success."