13 May 2004 01:47
Share sale nets Pounds 40m for Peter Hambro
Peter Hambro Mining, the Aim-traded group, has raised Pounds 40m through the
sale of 10m new shares, cash that will be used to develop its gold projects
in Russia.
The shares were sold at Pounds 4 each through Canaccord and HSBC following a
two-week road show by the company, talking to potential investors in the UK,
the US and Europe. PHM shares fell on the news, down 26 1/2p to 410p.
Peter Hambro, executive chairman of PHM, said he had been working on the
transaction since February.
The money will be spent on developing new gold deposits close to PHM's
existing Pokrovsky mine in the east of Russia, as well as helping to fund the
group's new Pioneer mine and possible acquisitions.
"This deal gives us the springboard for our next move up the production
ladder," said Mr Hambro.
PHM expects to produce close to 200,000 ounces of gold from the Pokrovsky
mine this year and aims to increase annual production to 1m ounces by 2009.
Production is set to begin at the Pioneer mine, which is costing Dollars 100m
(Pounds 57m) to build and should yield up to 600,000 ounces each year,
towards the end of 2004.
The company decided to fund its plans through an equity issue rather than
increased bank debt or an alliance with a big mining group, Mr Hambro said,
as investor demand for shares in gold producers had been strong during the
past year.
But he added that more negative market sentiment in the past two weeks,
caused by a weaker gold price, had lowered the price at which PHM could sell
new shares. The gold price has fallen more than 10 per cent since hitting a
15-year high of Dollars 424 an ounce last month.
PHM is currently looking at acquiring further Russian gold projects and Mr
Hambro said he hoped to make an announcement on this soon.
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