Celtic Resources expects to start paying dividends in 12 to 18 months, its managing director, Mr Kevin Foo, said yesterday.

The company has secured a $7 million (€7.55 million) loan from Zenit Bank of Moscow to develop its 50 per cent-owned gold mine at Nezhdaninskoye in Kazakhstan. Uncertainties associated with the licences to mine at this site have been resolved and negotiations to secure the loan had lasted more than six months, Mr Foo said.

Following an e.g.m. yesterday, the company will issue stock worth £2.51 million sterling - 20.34 million shares at 12.5p each - to acquire other assets in Kazakhstan from companies part-owned by Mr Foo.

Celtic will seek an additional $3 million funding in the form of private placements or rights issues in about three months "mainly for other developments and opportunities in Kazakhstan", Mr Foo added.

An Australian Mr Foo has worked in Russia for about 10 years. He owns a one-third stake in Millennium Oil & Gas, which has an 80 per cent interest in an oil deposit, Tamdykol, in northwest Kazackhstan, now owned by Celtic. Mr Foo also owns one-third of Dabney Industries Corp, which has interests in several gold and base metal properties in Kazackhstan including the Suzdal gold mine, 15 per cent owned by Celtic following yesterday's deal.

The company's target is to have more than 20 million ounces of gold under its control with an annual production of more than 250,000 ounces.

Celtic expected gold production at Nezhdaninskoye to begin later this year and to reach target production rates within half a year of that, Mr Foo added.

The company intends the mine - half-owned by the government of Yakutia - to produce 50,000 ounces of gold in its first year, increasing to 80,000 ounces in each of the following five years. Production costs will be about $150-200 per ounce, reflecting the mine's remote location and severely cold climate. The site is some 450 kms from the city of Yakutsk, takes two hours from there by plane and then involves a 12-hour road journey.

The company intends to seek a full listing on the London stock exchange around the same time as its plan to declare a dividend.