PHM in Russia joint venture with Rio Tinto
Rio Tinto has formed a joint venture with Peter Hambro Mining to look for
gold in Russia, its first foray into exploration in the country.
PHM, which already has several gold projects in the far east of Russia, said
yesterday it had won the licence to explore and develop the Chagoyansk gold
project in the Amur region of Siberia.
The Aim-quoted company has also signed a heads of agreement with Rio Tinto,
one of the world's biggest mining groups, regarding Chagoyansk, so that
Rio will finance the first Dollars 1.5m (Pounds 833,000) of drilling work in
return for a 51 per cent stake in a joint venture.
If exploration goes well, the two can either agree to contribute equal
amounts of investment, or PHM can opt to pay less and reduce its stake to 35
per cent. In the event that a mine is constructed at Chagoyansk, Rio will pay
PHM a Dollars 3.5m success fee.
The Chagoyansk joint venture is the first deal to come out of a two-year
relationship between Rio and PHM, during which the smaller company has been
looking for Russian gold opportunities on Rio's behalf.
Nicolai Vlasov, PHM's chief geologist, said: "Chagoyansk has the
potential to hold a major gold deposit."
Analysts said that although the investment was a small one, the joint venture
was a low-risk way for Rio to get involved in the growing Russian gold mining
industry.
PHM shares rose 5p to 510p and Rio slipped 14p to Pounds 13.15.
On Monday Rio announced it was selling its 12 per cent stake in Freeport
McMoRan, the copper producer.
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RUSSIA IN FACTS
