Peter Hambro Mining – 2008 Trading Statement

Peter Hambro Mining – 2008 Trading Statement

Peter Hambro Mining Plc is pleased to announce its production results for the full year ended 31 December 2008. This statement is issued as an unaudited update on 2008 trading in advance of the full year results announcement.


  • Total attributable gold production* for 2008 is up by 36% to 393,600 oz:
  • The Group’s total attributable gold production for 2008 increased by 36% compared to 2007, to 393,600 oz, at the upper end of the Group’s 2008 production target of 350,000 – 400,000 oz;
  • Gold production from the Pokrovskiy mine in 2008 was 267,100 oz, an increase of 13% compared to 2007 and exceeding the Group’s production target for 2008 by 19%;
  • Gold production from the Pioneer mine commenced in June 2008 yielding 72,900 oz by the end of the year, higher than the Group’s 2008 target of 72,000 oz;
  • Gold production from the Group’s alluvial operations increased by 38% compared to 2007 totalling 22,700 oz, exceeding the Group’s 2008 production target of 19,550 oz;
  • Attributable gold production from the Group’s joint ventures in 2008 was30,800 oz, a 15% decrease on 2007.

* Total attributable gold production, as stated throughout this document, is comprised of 100% of production from the Group’s subsidiaries and the relevant share of production from joint ventures. The Company’s direct and indirect interest in Pokrovskiy Rudnik (and any interest held by Pokrovskiy Rudnik) is 98.61%.

During the second half of 2008 rouble inflation continued though prices for consumables and fuel stabilised in October and November. Payroll costs denominated in Russian roubles also stabilised in the second half of the year. Further rapid depreciation of the Russian rouble has put inflationary pressure on fuel, reagents and consumables since the end of 2008. The depreciation of the Russian rouble has also had an impact on foreign exchange losses as the Group reports in US dollars. The Group anticipates high Russian rouble inflation in Russia in 2009, but depreciation of the Russian rouble against the US dollar, which started in August 2008 and has rapidly accelerated over the last few months, is expected to reduce the Group’s Gold Institute Standard (“GIS”) costs in US dollars terms.

Average realised gold sales price:
The Group’s average realised gold sales price of US$845/oz during 2008 was
26% higher than the average price of US$668/oz achieved in 2007.

Development at the Malomir deposit remains on-track with production due to commence in the second half of 2010. Construction has commenced, all technological decisions have been made and the construction plans and the commissioning of the deposit have been finalised; The Group is currently reviewing its exploration, construction and maintenance expenditure and production plan for Malomir. Results of this review are expected to be released in the first quarter of 2009.

Corporate affairs:
As announced on 9 January 2009, PHM is currently in preliminary discussions with Aricom plc (“Aricom”) regarding a possible offer by PHM for the entire issued share capital of Aricom. The consideration for any such offer would comprise shares in PHM. Given the fact that a number of directors and shareholders of PHM are also either directors or shareholders of Aricom, the Company has constituted an independent committee of the Board for the purposes of evaluating the possible transaction. A further update will be made when appropriate.

Short-term bank debt refinanced:
In November 2008, the Group successfully refinanced US$30.25m of shortterm
bank debt facilities.
Inclusion in the FTSE Gold Mines Index of the world’s leading gold miners:
In December 2008, the Group was included in the prestigious FTSE Gold
Mines Index, which comprises the top 18 gold-focused mining companies.

2009 plans and forecast production:

  • The Directors believe that the Group’s total attributable gold production for 2009 will be between 460,000 oz and 510,000 oz;
  • The second line of the Pioneer plant is planned to commence production in the second half of 2009;
  • Given the higher than expected grades produced by the Pioneer pit and in order to optimise cash flows from the Pioneer mine, the Group has taken a decision to process in 2009 all material produced by the mine through the Pioneer plant together with the remaining material from the Pioneer heap leach pads;
  • Independent mineral consultants, Wardell Armstrong International (“WAI”), continue to review the Group’s Pioneer and Malomir assets. It is intended that the results of this review will be made available to the market during the first quarter of 2009, together with the Group’s annual production plan update;
  • A new plan of development of the Malomir deposit, taking into account high grade oxidised ores at the Quartzitovoye ore body identified in 2008, is being reviewed by WAI with the results also currently scheduled to be released in the first quarter of 2009.

For a full copy of the 2008 trading statement for Peter Hambro Mining Plc please download the pdf below.


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