Petropavlovsk

Russian gold miner Petropavlovsk (POG) has pleased the market with first-half production up 32% to 219,000 oz. The fully-listed company, steered by entrepreneurial Peter Hambro, says it sold 266,000 oz of gold in the six months to June, a 71% increase, at an average price of $1,455 an ounce, up from $1,154 in the first half of 2010.

The growth in production and sales reflects initial output of 37,900 oz from Petropavlovsk's Malomir project, a threefold increase to 22,700 oz in alluvial gold production and a 30% gain in production from its Pioneer operaton, while output from its former Pokrovskiy flagship fell 30% to 166,600 oz. The company, which ended 2010 with $96m (£60m) cash and now has banking facilities of $340m, says it is now fully funded for its planned capital expenditure.

Petropavlosk fell from stockmarket star status when it became clear previous forecasts of one million oz annual gold production were significantly premature. Hambro now says the company is 'on track' to meet its more modest 600,000 oz target this year.

The shares, which hit £17.50p at their peak, fell from £12.52p to a 678p low during the past year. Highlighted by Growth Company Investor last month as a recovery punt at 758p, they have now reached 847p, yielding 1%, and stand to rally further, provided that the 600,000-oz target is indeed met.

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