13 May 2004 01:34
Peter Hambro Mining digs in with pounds 40m share issue
PETER HAMBRO Mining, the London-listed company which mines gold in Russia, announced plans yesterday to raise at
least pounds 40m in a new share issue next month.
The placing will be underwritten by HSBC and Canaccord Capital at pounds 4 a share, news of which sent the stock
tumbling more than 6 per cent yesterday to 410p, down from Tuesday's close of 436.5p.
The proceeds of the issue are to be spent on the development of Hambro's Pioneer mine and the acquisition of
further Russian deposits. The placing is conditional on approval at an extraordinary general meeting on 7 June. However,
the board already has irrevocable agreements to vote in favour of the issue from 47.5 per cent of the shareholders. Any
shares not sold during the placing will be bought by the underwriters.
Peter Hambro, the executive chairman of the company, said: "Our company has grown from a speculative start-up
operation into a substantial mining company, and it has two or three elements needed to allow it to join the team of one
million ounce per year producers: namely gold in the ground and management.
"The third requirement, cash, would have been principally provided as it has in the past from internally
generated cash flows and bank borrowings. However, the company thought it appropriate to speed up the development
process by accepting the offer from Canaccord and HSBC for the equity fund raising."
Analysts welcomed the news. John Meyer, at Numis Securities, said: "I would expect Peter Hambro to become a
major player over the next few years. The company's own target is to produce one million ounces of gold per year,
which would make them the twelfth largest gold provider in the world."
He also welcomed news of further acquisitions. "The company's acquisitions have so far been very
successful, simply because there is so much available in the old Soviet Union."
Peter Hambro launched 10 years ago but has come into its own in recent years after buying the Pioneer mine. Numis
estimates Pioneer alone will eventually be worth some pounds 350-400m for the company, and has a target price for the
stock of 715p.
The shares have rallied massively over the past 18 months, from 120p in January last year to a high of 569p last
month. But the share price has come back in the last three weeks as the gold price has fallen.
[The Independent] |
RUSSIA IN FACTS
