Irish-registered exploration group Celtic Resources received a boost yesterday when Russian mining company and steelmaker Severstal announced it had taken a 22 per cent stake in the firm.
The move was welcomed by executives at Celtic Resources and its shares, which are listed on London's Alternative Investment Market, rose more than 2 per cent to £2.04 before falling back slightly to close at just under £2.
"We are delighted to welcome Severstal into Celtic as our largest shareholder," said Celtic chairman Peter Hannen.
"They are a major player in the Russian iron and steel industry, and we look forward to working with them productively to achieve our strategic objectives in the region."
Celtic operates the Suzdal and Zherek gold mines in Kazakhstan, has a 50 per cent stake in the Shorskoye molybdenum mine and a copper project in Russia's Chelyabinsk region. In a statement to the stock exchange yesterday, Severstal said it had acquired 12.3 million shares in the Irish-registered group from Aton International. It did not disclose the price paid, though at yesterday's closing price the stake would have cost just under £25 million.
In the statement, Severstal chief executive Roman Deniskin described the investment as excellent, citing Celtic Resources' attractive mining assets in Russia and Kazakhstan. Celtic Resources produced about 62,000 ounces of gold last year, and generated pretax profit of $39.8 million.
