Barrick invests in Celtic Resources

Barrick Gold (ABX-T) has agreed to invest US$28 million to buy shares of Celtic Resources Holdings (CER-L) as a means of increasing its asset base in Russia and Central Asia.

Barrick will receive about 3.7 million shares as well as 1.84 million share purchase warrants with a price of US$7.56 per share that will have an expiry date of Dec. 31, 2007. On closing, Barrick will own 9% of Celtic’s outstanding shares.

Celtic owns two operating open-pit heap-leach gold mines in Kazakhstan and is in the process of underground development at the Nezhdaninskoye gold mine in Yakutia, Russia, in which it holds a half-interest.

Celtic is negotiating with IG Alrosa to become 100%-owner in Nezhdaninskoye. IG Alrosa is an investment company that is 51%-owned by the Russian government diamond company, Alrosa. If Celtic is successful in its negotiations then Barrick will have the option to buy 51% of the gold deposit for a total of US$195 million (payable in several tranches).

Nezhdaninskoye has an estimated reserve and resource of 28 million oz. gold and 100 million oz. silver (according to Russian classification). To date, an unfinished western audit of the resource has confirmed 14 million oz. gold to JORC standards.

Barrick will have an option to earn 50% in any of Celtic’s new Kazakhstan acquisitions and may participate in future equity financing up to a cumulative US$75 million. Barrick will also have the right to nominate two directors to Celtic’s board.

The deal is subject to Celtic shareholder approval and is set to close early in the new year.


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