Interim Results

Celtic Resources Holdings PLC 15 September 2003 Celtic Resources Holdings Plc Interim Results for the six months ended 30 June 2003 Highlights * Pre-tax profits of US$561,000 (2002: loss of US$512,000) * Profit per share US$0.0057 (2002: loss per share US$0.036) * Construction work commenced on Suzdal sulphide deposits * US$21 million loan agreement signed with Narodny Bank * Non-core Kazakh assets and oil & gas assets to be listed on AIM in separate newly formed companies For more information please contact: Kevin Foo Cindy Dennis Celtic Resources Holdings Plc Capital PR Tel: + 44 (0) 20 7593 0001 Tel: +44 (0) 781 661 7959 Investor.relations@celticresources.com cindy@capitalww.com -------------------------------------- ------------------------- Joe Nally / David Newton Williams de Broe Plc Tel: +44 (0) 20 7588 7511 www.celticresources.com Celtic Resources Holdings Plc Our financial figures for the half year to 30 June 2003 are attached to this letter and I will take the opportunity to comment briefly on them and on the progress we have made since I last wrote to you in June. The pre tax profit for the six months of US$561,000 is in line with our expectations and is a considerable improvement on last year when we posted a loss of $512,000. This is directly attributable to having increased our stake in the Suzdal gold mine in Kazakhstan from 40% to 100% in mid 2002. The construction work necessary to enable us to exploit the Suzdal sulphide deposits has started following the signing of the agreements for both the US$21 million loan from Narodny Bank and to licence the necessary bacterial technology. You will be pleased to know that construction started in August. In Russia, we announced in June 2003 that we had signed heads of agreement for the purchase of the remaining 50 per cent. of The South Verhoyansk Mining Company Limited (SVMC) from Investment Group Alrosa. SVMC owns 100% of the Nezhdaninskoye gold mine, a world class deposit containing a resource of over 29 million ounces of gold. We are now concentrating on completing the documentation, due diligence, and government approvals necessary to allow us to bring the agreement to you for approval. The full ownership of this gold mine will put our company into a new league of resources companies, and we will keep you informed as we progress. We have reviewed many options for enhancing the value of our precious and speciality mineral exploration properties in Kazakhstan and our oil & gas assets. As recently announced our plan is to create two new companies, each with its own dedicated management team, to hold and develop these assets. In coming months, separate AIM listings will be sought for each company. Celtic will retain substantial shareholdings in both companies, thus giving it a significant interest in the values inherent in these assets while leaving it free to focus on its three gold mines. We have recently made presentations about the company and its activities to a number of investment institutions in the UK and on the Continent. These presentations have been well received and together with an improving gold price seem to have encouraged the investment community to revise its view of Celtic. We look forward to the participation of our new shareholders as we continue to develop our exciting portfolio of assets. As ever Celtic is indebted to its employees, consultants, and other advisors, and I thank them for their excellent service on your behalf. I also thank you, the shareholders, for your continued support over this exciting period. Peter Hannen Chairman 12th September 2003 Unaudited Consolidated Profit & Loss Statement for the six months ended 30 June 2003 2003 2002 $000 $000 Turnover 3,109 - Cost of sales (1,159) - ------------ ------------ Gross Profit 1,950 - Administrative expenses (1,289) (895) ------------ ------------ Operating profit/(loss) 661 (895) Share of associated company's profit before tax - 349 Interest payable (142) - Interest receivable 42 34 ------------ ------------ Profit on ordinary activities before 561 (512) taxation Taxation (393) (107) ------------ ------------ Profit/(Loss) after taxation 168 (619) Minority interests - - ------------ ------------ Group profit/(loss) 168 (619) Foreign currency adjustments 103 (299) ------------ ------------ 271 (918) ------------ ------------ Group profit/(loss) per share $0.0057 ($0.0360) Fully diluted profit per share $0.0055 - No Dividend Proposed Unaudited Consolidated Balance Sheet at 30 June 2003 2003 2002 $000 $000 Fixed assets Intangible assets 44,867 28,061 Tangible assets 6,149 3,899 Financial assets 2 2 ------------ ------------ 51,018 31,962 ------------ ------------ Current assets Stocks 4,486 2,782 Debtors 5,520 2,521 Cash at bank and in hand 2,566 5,572 ------------ ------------ 12,572 10,875 Creditors Amounts falling due within one year (11,225) (12,476) ------------ ------------ Net current assets 1,347 (1,601) ------------ ------------ Creditors - amounts falling due after more than one year Costs reimbursable to the Republic of Kazakhstan (5,218) - Bank loans - ------------ ------------ (5,218) - ------------ ------------ ------------ ------------ Net assets 47,147 30,361 ============ ============ Capital and reserves Called up share capital - equity 7,521 5,407 - non equity 3,184 3,184 Share premium account - equity 42,387 29,481 Renominalisation reserve - equity 39 39 - non equity 22 22 Profit and loss account - equity (9,620) (11,377) ------------ ------------ Shareholders' funds 43,533 26,756 Minority interests - equity 3,614 3,605 ------------ ------------ 47,147 30,361 ============ ============ Unaudited Consolidated Cash Flow Statement for the six months ended 30 June 2003 2003 2002 $000 $000 Cash flow from operating activities Operating profit/(loss) 661 (895) Depreciation 1,350 59 Stocks (increase) (1,842) (431) Debtors (increase) (1,774) (416) Creditors (decrease)/increase (2,450) 137 Minority interests exchange movement (236) - Exchange movements 103 (299) ------------ ------------ (4,188) (1,845) ------------ ------------ Returns on investments and debt servicing Interest received 42 34 Interest paid (142) (95) ------------ ------------ (100) (61) ------------ ------------ Tax paid (588) - ------------ ------------ Capital expenditure and financial investment Payments to acquire intangible fixed assets (4,833) (4,017) Payments to acquire tangible fixed assets (906) (240) Payments to acquire investments - (1,200) ------------ ------------ (5,739) (5,457) ------------ ------------ Net Cash Flow before Financing (10,615) (7,363) ------------ ------------ Financing Net proceeds from the issue of ordinary shares 4,958 11,301 Loans taken 5,790 1,109 Loans repaid - (611) ------------ ------------ 10,748 11,799 ------------ ------------ Increase in cash 133 4,436 ------------ ------------ Notes to the Unaudited Accounts at 30 June 2003 1. Basis of Preparation The consolidated accounts include the unaudited accounts of the company and each of its subsidiaries and have been prepared using accounting policies consistent with those adopted for the preparation of the annual audited Financial Statements. They are stated in thousands of US Dollars which is the reporting currency of the group. 2. Taxation The tax charge for the half year is higher than standard UK Corporation Tax on group profits because the profit earned by the subsidiary in Kazakhstan is taxed in that country with no deduction available for costs incurred in managing the Group's world wide activities. 3. Profit/(loss) per share The calculation of the profit/(loss) per share is based on the profit attributable to ordinary shareholders of $168,000 (2002 - loss$619,000) and the weighted average number of ordinary shares of 29,477,372 (2002 - 17,213,196 (as consolidated)) in issue in the half year. The fully diluted profit per share uses a weighted average number of ordinary shares of 30,803,173. There is no comparative because the effect of the outstanding share options and Warrants was anti-dilutive for that half year. 4. Intangible assets The Group's activities include prospecting for and production of gold, other minerals and oil and gas in Russia and Kazakhstan and are therefore subject to a number of significant potential risks including - price fluctuations - uncertainties over development and operational costs - operational and environmental risks - political and legal risks, including arrangements with the governments for licences, profit sharing and taxation - funding developments The value of these assets is dependent on the development of mineral or hydrocarbon reserves, which is affected by these and other risks. 5. The South Verhoyansk Mining Company Limited On 13 June 2003 non binding heads of agreement for the purchase of the remaining 50% of the shares of The South Verhoyansk Mining Company Limited in exchange for shares were signed. The arrangements will be subject to shareholder approval. 6. Interim Results Copies of these interim results will be sent to shareholders by the end of the week. This information is provided by RNS The company news service from the London Stock Exchange

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