20th Dec 2005 07:01
Peter Hambro Mining PLC20 December 2005 20 December 2005 Omchak Joint Venture Dividend Received Peter Hambro Mining plc ("PHM") announces that the Omchak Joint Venture ("OmchakJV" or the "JV") has received a cash dividend from the companies constitutingthe assets of the JV in an amount sufficient for PHM's interest in the jointventure to revert back to 50%. The terms of the joint venture agreement providefor PHM's equity interest in the joint venture to increase if the agreed levelof dividends is not received for the relevant 12 month period. The cash paymentin respect of dividends during 2003 and 2004 was not received and PHM's holdingin Omchak had consequently temporarily increased to 65% from April 2004. Asoutlined in the 2004 Annual Report and September 2005 interim results, receiptof the dividend lowers PHM's 2005 attributable production forecast byapproximately twenty five thousand ounces. Omchak JVOmchak JV was formed in July 2003 with PHM contributing US$7.2 million in cashand the Russian participants contributing their controlling stakes in twooperating gold mines in the Magadan region. In addition to such contribution,the Russian participants guaranteed a minimum aggregate dividend flow to thejoint venture for 5 years of US$7.2 million with a specific level agreed foreach year from each of the assets. Under the terms of the joint ventureagreement, if such dividend level is not maintained in any one year, PHM'sinterest in the joint venture increases proportionately and reverts if thedividend arrears are paid within the next year. In the absence of a dividendpayment for 2003 and 2004, PHM's interest had risen to 65% and was expected torise again in 2005 if no dividend was to be paid. As a result of today's paymentPHM's equity interest in the Omchak JV returns to its original 50%. The neteffect of this payment and movement in ownership on the financial accounts ofPHM, for the period since the JV was formed, is not material since the JV isaccounted for in consolidation. PHM Group Attributable Production ForecastFollowing the cash receipt, PHM's interest in the Omchak JV will not increasebeyond 65% during 2005. The 2005 accounts will equity account for 65% to 19December 2005 and 50% from this date to the year end. As previously identifiedas a consequence of the receipt of the dividend, the result is an approximate25,000 ounces reduction of PHM's 2005 attributable production forecast to246,000 ounces. PHM expects to report a 2005 attributable production figure withthe 2005 Group Trading Statement at the end of January 2006. Enquiries:Alya Samokhvalova, Director of External Communications +44 (0) 207 201 8900or Marianna Adams www.peterhambro.comPeter Hambro Mining David Simonson or Tom Randell +44 (0) 207 653 6620Merlin This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
POG.L