Companies: POG   

Russia-focused gold miner Peter Hambro Mining (PHM) says 2008 production could rise by up to 25 per cent to 400,000 oz.

Quoted on AIM but planning a move to the Full List this year, PHM, which is working primarily in the Russian Far East, increased operating profits by 60 per cent last year to £21 million on revenues up 44 per cent to £113.2 million. Pre-tax profit rose a more modest 22 per cent to £27.6 million, after taking into account the ‘fair value’ change in derivatives in which PHM is concerned and its share of joint venture operations, and, after a 20 per cent earnings gain to 24p a share, the board is recommending a maiden final dividend of 7.5p a share.

PHM increased attributable gold production 14 per cent to 297,3000 oz in 2007, most of it from its Pokrovskiy project, where total production costs rose nine per cent to $258 an ounce (against a current $914 gold price), despite adverse currency moves. The company says that it expects output of between 350,000 and 400,000 oz this year.

Chairman Peter Hambro says PHM, which managed to raise $180 million (£90 million) by issuing ‘gold exchangeable bonds’ amid financial market turmoil, benefited from rising gold prices as well as cost control. He says he expects the company’s Pioneer facility to start year-round production this month.

PHM is also upbeat about exploration progress at its other prospects. Its shares, which rose from 130p to £17.10p between 2003 and 2006 before easing back, partly on political concerns about Russia, are 73p up today at £12.82p and are still likely to fare better than many in the sector.

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