Response to Severstal offer

Celtic Resources Holdings PLC
26 October 2007



                         Celtic Resources Holdings Plc
                          ("Celtic" or the "Company")

               Response to posting of Severstal's offer document


The Board of Celtic (the "Board") notes that the offer document posted by a
subsidiary of Severstal today continues to focus on the past. It completely
ignores Celtic's strong financial position and asset base, its proven ability to
use a technologically advanced biological process (BIOX(R)) for gold recovery in
the Former Soviet Union and its track record of generating profits from the
trading of mining assets.

Your Board unanimously still considers that Severstal's offer of 270 pence per
share significantly undervalues the Company. The Board's detailed views and
explanation of why shareholders should reject Severstal's unsolicited offer will
be sent to shareholders within 14 days. In the meantime, the Board urges
shareholders to take no action.

Peter Hannen, Chairman of Celtic, said,

"Severstal is trying to buy Celtic cheaply through this opportunistic and
unsolicited offer. We expect record production levels for the Company in 2007
with substantial increases in 2008, against a background of a sustained rise in
the price of gold."

An information line has been set up for shareholders' enquiries on 00 800 6610
6610. This is a free phone line for shareholders located in the UK and Ireland.


Enquiries:

Celtic Resources Holdings Plc
Kevin Foo
Jonathan Scott-Barrett
Tel: + 44 (0)20 7921 8800

Gleacher Shacklock LLP
Kieran Murphy
Tel: [phone]

Strand Partners Limited
Simon Raggett
Stuart Faulkner
Tel: [phone]

Cardew Group
Anthony Cardew
Shan Shan Willenbrock
Tel: [phone]
[e-mail]

Conduit PR
Leesa Peters
Jane Stacey
Tel: [phone]
[e-mail]


Any person who is the holder of 1 per cent. or more of any class of shares in
Celtic may be required to make disclosures pursuant to Rule 8.3 of the Irish
Takeover Panel Act, 1997, Takeover Rules 2001 to 2006.

The Directors of Celtic accept responsibility for the information contained in
this announcement and to the best of their knowledge and belief (having taken
all reasonable care to ensure that such is the case), the information contained
in this announcement is in accordance with the facts and, where appropriate,
does not omit anything likely to affect the import of such information.



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