Companies: POG   

Peter Hambro Mining says questions over some Russian gold licences ‘are now resolved’, with 2006 production up five per cent.

In an upbeat trading statement, chairman Peter Hambro says the AIM-quoted mining group increased total attributable gold production last year to around 261,000 ounces. Output from the Amur region, where the AIM-quoted company operates three mines directly, rose 13.5 per cent to 224,900 ounces, but a 33 per cent production fall to 33,400 ounces at Peter Hambro’s Omchak joint venture in Magadan blunted the overall increase, despite output gains elsewhere in the joint venture.

The company, which says it does not undertake long-term gold price hedging or forward sales, increased its realised gold sales price 33 per cent last year to $586 per ounce, against today’s $631 market price. Chairman Hambro insists the mining licence questions, which had prompted fears that Russia’s environmental watchdog Rosprirodnadzor would take away some key assets, have been resolved.

As reported here last month, Rosprirodnadzor’s chief Oleg Mitvol was insistent there was no political angle. Hambro and his well-connected deputy Pavel Maslovsky met Mitvol and, apart from a few hundred dollars fine, it is understood those problems are solved.

Hambro is also bullish about the outlook for his company’s 2007 production and the trend in the gold price. At £10.30p, up 60p today and valuing the company at £836 million, the shares are still more than twice Growth Company Investor’s 2003 recommendation.

They have fallen from their £17.10p peak in May, GCI having that month suggested partial profit-taking at £15.34p. They should continue an active market.