21st Apr 2008 07:01
Peter Hambro Mining PLC21 April 2008 21 April 2008 Unaudited Preliminary results for the year ended 31 December 2007 Peter Hambro Mining PLC ("PHM" or the "Company" or, together with itssubsidiaries, the "Group") announces its unaudited preliminary results for theyear ended 31 December 2007. Financial Highlights: US$ '000 2007 2006 Change--------------------------------- ---------- --------- ---------Group Revenue 226,397 157,807 44%*Operating Profit 81,435 50,915 60%Profit for the Year 39,625 32,373 22%Earnings per Ordinary Share (US$) 0.476 0.398 20%Equity attributable to PHM 336,906 298,239 13% Operating Highlights 2007 2006 Change--------------------------------- ---------- --------- ---------*\* Total Attributable Gold 297.3 261.3 14%Production ('000 oz) Pokrovskiy GIS Total Cash Costs 193.0 174.8 10%(US$/oz)Pokrovskiy GIS Total Production 258.2 236.8 9%Cost (US$/oz) * Operating profit as stated before fair value change in derivatives andshare of joint ventures' operations ** Total attributable gold production is comprised of the Group'ssubsidiaries' share of production taking into account their share in joint ventures and other investments Highlights: Operations and Development • Total attributable gold production of c.297,000 oz for the year, up by c.14% versus 261,000 oz in 2006 and by c. 5% on the 2007 forecast of 283,000 oz; • Pokrovskiy production, up 15% and remains the Group's primary focus as the stable producer of cash-flow and as a solid base for the Group's expansion; • Pokrovskiy GIS Total Production Costs increased by a modest 9% in dollar terms, despite a 7% rouble appreciation, 13% increase in electricity prices, up to 20% increase in labour costs and up to 20% increase in prices for reagents and consumables, due to efficient cost control at the mine; • Technological improvements across all areas of Pokrovskiy's operations allowed for c.91% recovery rates from the resin-in-pulp ("RIP") plant in spite of it processing more difficult material; • Upgrade of the mining fleet at the Pokrovskiy operations and the completion of a comprehensive programme of advanced stripping works, contributed to mining costs in 2007 staying in line with the previous year despite working at deeper horizons of the deposit; • Pioneer's first stage production facilities, which were commissioned in September 2007, have proved the viability of the new technology. The second stage of development of the Pioneer plant, which introduces an all-year-round operation is currently on schedule; • As a result of intensive exploration works and acquisitions the Group's Russian category B+C1 reserves have increased by 20%, category C2 reserves by 26% and category P1 resources by 6%. Exploration • Exploration of the Malomir deposit in 2007 extended the evaluated zone from 400m to 1km along strike, the estimated reserves and resources have been increased to c.2.2mln oz of C2 reserves (c.47% up from c.1.5mln oz in 2006) and c.1.2mln oz of P1 resources (164% up from 0.5mln oz in 2006), an overall increase of 77% in C2+P1 reserves and resources. Total Malomir area estimated resources/reserves (C2+P1) have increased from c.2.9 to c.4.3mln oz; • In the newly acquired (February 2007) Taldan deposit an estimated 240,000 oz of gold P1 category resources have already been identified, ahead of the intensive exploration efforts which have started and are expected to expand and upgrade the resource base. Gold and silver grades found so far are up to 17g/t of gold and up to 160g/t of silver, with an average gold grade of 7.5g/t; • The newly acquired (February 2007) Kirovskoye deposit is estimated, on the basis of work done to date, to include a C2+P1 reserves and resources of over 0.5mln oz at an average grade of 7.8g/t, and P2 resources estimated at 1.6mln oz at an average grade of 2g/t; • At Aprelskoye, 2007 trench exploration has intersected and confirmed several of the mineralised structures indicated by geochemical and geophysical anomalies, and surface samples of mineralised material have yielded gold grades up to 50g/t; • At Albyn, the evaluated zone has been extended from 1km to over 3km along strike, and the estimated reserves and resources increased from 0.6mln oz to 1.6mln oz (up 166%); • Through further detailed exploration works reserves and resources in the Andreevskaya zone of the Pioneer deposit were expanded. Financials • The Group's average realised gold sales price of US$668/oz during 2007 was 14% higher than the US$586/oz achieved in 2006; • The Board is today proposing a maiden final dividend of 7.5 pence per share (net), which will be subject to shareholder approval at the Annual General Meeting ("AGM") to be held on 25 June 2008; • US$180mln of financing obtained through the issue of Gold Equivalent Exchangeable Bonds. Corporate development • The Group expects total attributable production for 2008 to be between 350,000 oz and 400,000 oz; • The Group confirms its plans to seek to obtain a full listing on the Main Market of the London Stock Exchange by the end of 2008. Chairman's Statement: - "2007 has been another successful year of steady progress towards ourgrowth targets, with a 14% increase in attributable gold production to c.297,000oz, a 60% increase in adjusted operating profit to US$81.4mln, significantexploration progress and the commissioning of Pioneer's first stage productionfacilities on time and on budget. This year the Group broke new ground in the financial world by thesuccessful issue of US$180mln of gold exchangeable bonds ("Bonds") at a timewhen the debt markets were, to all intents and purposes, closed to new business.By issuing this type of bond the Group achieved a cash interest saving,estimated at 4.5% (c.US$8.1mln) per annum for 5 years, by embedding goldexchangeability in the Bonds (effectively granting a US$1,000/oz "call option").In 2007, only part of this saving was realised because the Bonds were issuedlate in the year. It should also be noted that the accounting treatment of the embeddedderivatives under International Financial Reporting Standards ("IFRS") requiresthe change in the value of these embedded derivatives to be reported as anon-cash item in the Income Statement. In 2007, the change in value between thedate of issue of the Bonds and 31 December 2007 amounted to c.US$12mln. Unlessproperly understood, this charge could, at first glance, unfairly appear todistort the annual post-tax profitability of the Group. It is important to notethat the fair value of the implied derivative is marked to market during itslife and the non-cash charge will expire when the Bonds mature or are exchanged.A more detailed explanation can be found at the end of this press release. It has always been my strong belief that the principal reason forinvesting in mining companies is to share in their profitability. Almost 14years after we founded the Group, it gives me huge pleasure that the Board istoday proposing a maiden final dividend of 7.5 pence per share (net), which willbe subject to shareholder approval at the AGM on 25 June 2008. This finaldividend is expected to be paid on 1st August 2008 to shareholders on theregister as at 20 June 2008. Subject to the Group's results, the Board would expect to pay interimand final dividends of approximately equal amounts, with the interim dividendbeing paid in October and the final dividend in July/ August of the followingyear. The Board considers that the proposed dividend level is appropriatelycovered and is consistent with the Company's development spending. While our financial performance has benefited from the continuedimprovement in the gold price, I am more pleased by our team's success inmanaging our operating cost base, which saw a relatively modest 9% increase indollar terms despite substantial pressure from energy, labour and materialsprices. Our GIS cash costs at US$193/oz and GIS total costs at US$258.2/ozcontinue to be amongst the lowest in our industry. We saw an impressive 15% increase in production from Pokrovskiy, andstockpiling for the new facility at Pioneer is on track to start year roundproduction at the end of this month. I am pleased to report that our explorationteams have made good progress in expanding the Group's portfolio enabling a 25%increase in reserves to 10.6mln oz under the Russian classification system. In addition the report which the Group commissioned from consultants,Wardell Armstrong International, has gone a long way to demonstrate theviability of the Russian system of reserve and resource reporting and was wellreceived by the Analyst Workshop at the time of its publication in February2008. Looking forward to the remainder of 2008, I expect attributable goldproduction for the year to increase to between 350,000 to 400,000 oz in linewith our growth plans. In addition our 2008 objective of gaining admission ofthe Company's shares to trading on the Main Board of the London Stock Exchangeremains on track. As ever, the outstanding quality and commitment of our management andemployees lies behind the progress of the Group in 2007, and gives me everyconfidence in our ability to achieve our targets in the year to come." Enquiries: Alya Samokhvalova or Rachel Tuft +44 (0) 207 201 8900Peter Hambro Mining Plc www.peterhambro.com Tom Randell or Anastasia Ivanova +44 (0) 207 653 6620Merlin Patrick Magee +44 (0) 207 155 4525JP Morgan Cazenove Robert Finlay +44 (0) 207 050 6500Canaccord Adams In these preliminary results we present financial items such as "cash operatingcosts", "total cash costs" and "total production costs" that have beendetermined using industry standards as per the Gold Institute and are notmeasures under International Financial Reporting Standards ("IFRS"). An investorshould not consider these items in isolation or as alternatives to any measureof financial performance presented in accordance with IFRS either in thisdocument or in any document incorporated by reference herein. While the Gold Institute has provided definitions for the calculation of "cashoperating costs", "total cash costs" and "total production costs", thedefinitions of certain non-IFRS financial measures included herein may varysignificantly from those of other gold mining companies, and by themselves donot necessarily provide a basis for comparison with other gold mining companies.However, we believe that total cash costs and total production costs in total bymine and per ounce by mine are useful indicators to investors and management ofa mine's performance because they provide a very useful indication of a mine'sprofitability, efficiency and cash flows. They also show the trend in costs asthe mine matures over time and on a consistent basis. These costs can also beused as a benchmark of performance to allow for comparison against other minesof other gold mining companies. Consolidated Income Statementfor the year ended 31 December 2007 (expressed in US $'000s) ----------------------------- -------- --------- 2007 2006 US$'000 US$'000----------------------------- -------- --------- Group Revenue 226,397 157,807 Net operating expenses (144,962) (106,892)----------------------------- -------- --------- 81,435 50,915 Fair value change on derivatives (12,100) - Share of results of joint ventures (1,821) (173)----------------------------- -------- --------- Operating profit 67,514 50,742 Financial income 3,776 6,137Financial expenses (16,105) (11,764)----------------------------- -------- --------- Profit before taxation 55,185 45,115 Taxation (15,560) (12,742)----------------------------- -------- --------- Profit for the year 39,625 32,373 Attributable to:- equity holders of the Company 38,667 31,986- minority interest 958 387 Earnings per ordinary share (basic and diluted) $0.476 $0.398 Consolidated Balance SheetAt 31 December 2007 (expressed in US $'000s)----------------------------- -------- --------- 2007 2006 US$'000 US$'000----------------------------- -------- ---------AssetsNon-current assets 469,004 360,349Goodwill 15,818 13,396Other intangible assets 170,782 155,266Property, plant and equipment 257,801 165,930Investments in joint ventures 8,635 10,534Other investments 960 1,022Inventories 11,620 14,201Deferred tax assets 3,388 ------------------------------ -------- --------- Current Assets 284,271 145,585Inventories 40,468 21,859Trade and other receivables 65,361 47,323Securities held for trading - 13,937Cash and cash equivalents 178,442 62,466----------------------------- -------- --------- Total Assets 753,275 505,934----------------------------- -------- --------- LiabilitiesCurrent liabilities (66,405) (38,829)Trade and other payables (33,382) (30,661)Current tax liabilities (1,888) (973)Borrowings (31,135) (7,195)----------------------------- -------- --------- Net Current Assets 217,866 106,756----------------------------- -------- --------- Total Assets less Current Liabilities 686,870 467,105----------------------------- -------- --------- Non-current liabilities (344,014) (157,051)Borrowings (292,100) (134,740)Derivative financial instruments (30,634) -Deferred tax liabilities (19,677) (21,744)Provisions (1,603) (567)----------------------------- -------- ---------Net Assets 342,856 310,054----------------------------- -------- --------- EquityShare capital 1,311 1,311Share premium 35,082 35,082Other reserves 176,722 176,722Equity reserve on bonds 1,583 1,583Retained earnings 122,208 83,541---------------------------- -------- ---------Equity attributable to PHM shareholders 336,906 298,239---------------------------- -------- ---------Minority interests 5,950 11,815Total equity 342,856 310,054---------------------------- -------- --------- Consolidated Cash Flowfor the year ended 31 December 2007 (expressed in US $'000s) ------------------------- --------- ---------- 2007 2006 US$'000 US$'000------------------------- --------- ----------Cash flows from operating activitiesCash generated from operations 62,933 47,607Interest received 3,963 7,209Interest paid (11,113) (10,935)Income tax paid (15,675) (9,416)------------------------- --------- ----------Net cash from operating activities 40,108 34,465 Cash flows from investing activitiesAcquisitions of subsidiaries and joint ventures net of - (38,613)cash acquiredAcquisition of minority interests (9,257) -Acquisition of assets 34 -Purchase of property, plant and equipment and intangible (76,314) (31,152)assetsProceeds on disposal of property, plant and equipment 1,558 758Exploration and evaluation expenditure (48,426) (36,747)Securities held for trading 14,353 (13,845)Payments to Reserve Bonus Scheme holders - (15,000)Proceeds from sale of investments available-for-sale - 4,000Acquisition of other investments - (537)------------------------- --------- ----------Net cash used in investing activities (118,052) (131,136) Cash flows from financing activitiesNet proceeds from issue of ordinary share capital - 17,822Repayments of borrowings (66,435) (27,651)Proceeds received from borrowings 257,217 22,029Capital element of finance leases - (243)Dividends paid to minority interests (26) -------------------------- --------- ----------Net cash from financing activities 190,756 11,957 Net increase/(decrease) in cash and cash equivalents in 112,812 (84,714)the yearEffect of exchange rates on cash and cash equivalents 3,164 2,646Cash and cash equivalents at beginning of year 62,466 144,534------------------------- --------- ----------Cash and cash equivalents at end of year 178,442 62,466------------------------- --------- ---------- Production ------------------------ ------- ------- --------Total attributable gold production, oz'000* 2007 2006 Var %------------------------ ------- ------- --------Amur Region --------------------- ------- ------- -------- Pokrovskiy 237.10 206.8 15 --------------------- ------- ------- -------- Amur NE Assets 16.5 10.5 57 --------------------- ------- ------- -------- Rudnoye JV 9.20 8.1 14 ----- --------------------- ------- ------- --------Omchak JV------------------------ ------- ------- -------- Magadan assets 31.2 33.4 (7) --------------------- ------- ------- -------- Amur Assets 3.3 2.5 32 ----- --------------------- ------- ------- --------TOTAL 297.3 261.3 14 ------------------------ ------- ------- -------- \* Total attributable gold production is comprised of the Group's subsidiaries'share of production taking into account their share in joint ventures and other investments Pokrovskiy In 2007 gold production was 237,091 oz, an increase of 15% compared to 2006. Mining In 2007 mining operations increased 16%, moving c.4.6mln m3 ofmaterial yielding c.2.2mln tonnes of ore. Although working at deeper levels ofthe Pokrovskiy pit, mining costs increased by only 4%. Cost control wasprincipally achieved by upgrading and expanding the mining fleet. For example,in the second half of 2007 an EKG-5 excavator with 5m3 loading capacity andthree new 45-tonne capacity BelAZ trucks were commissioned, thus increasing thevolume of waste stripping and a new Atlas Copco DML drill rig, with a higheroperating rate and larger drilling diameter, were brought into operation. Theprogramme envisages a further addition to the mining fleet in the first quarterof 2008 when three further 45-tonne BelAZ trucks are expected to be brought intooperation. Precise and timely execution of the mining plan using the Microminegeological computer model of the deposit also aided cost control. Advance stripping undertaken during 2006 allowed for mining workoptimisation in 2007 when the pit floor was reduced by 25m. Pre-stripping ofoverburden in order to prepare reserves and maintain ore quality was continuedin 2007. During 2007, exploration works around the Pokrovskiy pit confirmed50,000 oz of additional C1 gold reserves on the margins of the Pokrovskiy pit atan average gold grade of 5.2g/t. This reserve is comprised of oxidised materialwhich improves the quality of the blended mix in the intermediate stockpile.Exploration works at the edges of the pit are continuing. 2008 exploration isalso focusing on bringing 200,000 oz of C2 into C1 reserves category. The significant increase in gold prices allowed for there-calculation of the economic depth of the Pokrovskiy pit to a depth greaterthan in the original mine design. The new pit is expected to provide the minewith high quality ore up to 2013. RIP plant Another area of optimisation was in further expansion of theintermediate (mill feed) stockpiles introduced by the Pokrovskiy Mine team forthe first time in 2006. These stockpiles were designed to optimise ore blendingfor the RIP once primary ore started to be produced by the pit. In order tohave a uniform quality of material through the mill, both from a grade andtechnological point of view, different types of ore from the pit are mixed in anintermediate stockpile. In 2007, the capacity of intermediate stockpiles wasincreased to 200,000 tonnes. In 2007, the plant processed 1.7mln tonnes of ore which comprised amixture of oxidised and primary material. Although processing mixed materialwas more challenging from a technological point of view a c.91% recovery ratewas achieved. This was possible thanks to long term planning for the transitionto a different type of material and improvements introduced by the team in orderto sustain previous levels of recoveries. In addition to ore preparation inintermediate stockpiles, these improvements included optimisation of pulpparticle size, cyanidation time, quantity of sorbent and transition speed. Enhanced thickener speed and concentration and use of cyanide,allowed a high level of gold extraction to be maintained despite theintroduction of primary ore from the deposit. This was further supported by theinstallation of a centrifugal concentrator in front of one of the milling linesfor removal of sulphides from the process that are resistant to cyanidation. Thesulphides are processed in special units for intensive cyanidation with strictsupervision of all technological parameters. The second and third mill circuitwill be equipped in the same way during the first half-year 2008. Heap-leach An increase in RIP processing capacity, coupled with the gold priceincrease, has allowed processing of lower grade ore through the heap leachprocess, and the optimisation of the heap leach process carried out in previousyears allowed for high gold recovery rates, even though processing low gradematerial. Recovery rates of 68.5% were achieved through the heap leach processin 2007, processing material at an average gold grade of 0.8g/t. PHM Schedule of mining operations Units 2007 2006Pokrovskiy deposit Total material moved '000 m(3) 4,621 5,385 Including advanced '000 m(3) 1,206 1,657 stripping Ore mined '000 tonnes 2,207 1,904 Grade g/t 3.5 3.0 Gold '000 oz 250.6 184.5 Pioneer deposit Total material moved '000 m(3) 1,704 912 Ore mined '000 tonnes 191 168 Grade g/t 3.8 3.4 Gold '000 oz 23.1 18.3 *PHM Processing Schedule Units 2007 2006Resin In Pulp plant Ore from Pokrovskiy pit '000 tonnes 1,604 1,379 Grade g/t 4.3 4.7 Gold '000 oz 222 136 Ore from stockpiles '000 tonnes 95 248 Grade g/t 3.7 2.8 Gold '000 oz 11.4 39.4 Pioneer (bulk sample) '000 tonnes 23 46 Grade g/t 16.6 5.7 Gold '000 oz 12.5 9.7 Total milled '000 tonnes 1,723 1,698 Grade g/t 4.4 4.1 Gold '000 oz 246.0 184.9 Recovery % 90.6% 91.5% Gold recovered '000 oz 222.8 169.2 Heap leach Ore stacked '000 tonnes 784 750 Grade g/t 0.8 0.9 Gold '000 oz 21 23 Recovery % 68.5% 73.1% Gold recovered '000 oz 14.3 16.8 Total gold recovered '000 oz 237.1 206.8 *Certain comparative numbers have been rounded up Operating Costs 2007 Pokrovskiy Rudnik - Operating Cost Analysis (US$/oz) ------------------------------------------ 2007 2006 Var % 1H 2007 --------------------- ------- ------- -------- ------- Gold Institute Standard ------------------------------------------ Direct Mining & Processing Expenses 107.4 103.0 4% 71.3 --------------------- ------- ------- -------- ------- Refinery & Transportation Cost 6.8 7.0 (3%) 6.3 --------------------- ------- ------- -------- ------- By-product Credits (2.3) (4.0) (43%) - --------------------- ------- ------- -------- ------- Other 30.9 27.8 11% 38.2 --------------------- ------- ------- -------- ------- Cash Operating Cost 142.8 133.8 7% 115.8 --------------------- ------- ------- -------- ------- --------------------- ------- ------- -------- ------- Royalties 39.9 35.3 13% 42.8 --------------------- ------- ------- -------- ------- Production Taxes 10.3 5.7 81% 9.3 --------------------- ------- ------- -------- ------- Total Cash cost 193.0 174.8 10% 167.8 --------------------- ------- ------- -------- ------- --------------------- ------- ------- -------- ------- Non-cash Movement in Stock 23.2 15.8 47% 30.0 --------------------- ------- ------- -------- ------- Depreciation/Amortisation 42.0 46.1 (9%) 52.0 --------------------- ------- ------- -------- ------- Total Production Cost 258.2 236.8 9% 249.9 --------------------- ------- ------- -------- ------- At Pokrovskiy GIS Total Production Cost in 2007 increased by just9% to US$258/oz and this marginal increase was achieved despite a dollar torouble depreciation of 7% and general Russian inflation of c.12%, in particulara 13% increase in electricity prices and an up to 20% increase in prices forvarious chemical reagents and consumables. The stable and low operating costs at the Pokrovskiy mine are theresult of a series of long term cost cutting programmes implemented at the minein 2005, the effect of which was first fully reflected in the 2006results. Expansion of fuel storage facilities during 2007 enabled the Group todecrease the unit cost of diesel by 4% in comparison with the year 2006. Anincrease in the number of ounces produced also improved the unit cost figure. Royalties are in direct correlation with the gold price. Refiningcosts were fixed at the beginning of 2007 and were marginally down on a perounce basis. Depreciation and amortisation expenses have not increasedsignificantly between the two years and decreased on a per ounce basis due tohigher gold production numbers. Non-cash movement reflects the cost of mining incurred in previousperiods but accounted for in 2007 when the actual gold was produced. The structure of direct mining and processing costs has notchanged significantly compared to the previous year and is represented in thetable below: 2007 2006 Mining 55% 51% Labour 29% 28% Raw materials 42% 37% Energy 29% 35% RIP plant 39% 41% Labour 19% 17% Raw materials 56% 57% Energy 25% 26% Heap Leach 6% 8% Labour 38% 33% Raw materials 52% 58% Energy 10% 9% Omchak Joint Venture Omchak Schedule of mining operations 2007 2006 Nelkobazoloto - Shkolnoye DepositOre mined '000 tonnes 52.6 32.8Ore processed '000 tonnes 46.7 29.6Ounces produced '000 oz 10.2 8.7 BerelekhWaste rock stripped '000 m(3) 9,511 8,651Sands processed '000 m(3) 4,197 4,161Ounces produced '000 oz 52.2 50.0 Noviye Tekhnologii and ZeyazolotoWaste rock stripped '000 m(3) 381,4 432.9Sands processed '000 m(3) 269.9 229.9Ounces produced '000 oz 3.5 3.7 UdumaWaste rock stripped '000 m(3) 131.5 -Sands processed '000 m(3) 86.9 38.3Ounces produced '000 oz 3.2 1.1 Susumanzoloto, temporary holding '000 oz - 8.3 Total gold production 69.1 71.8 PHM attributable (2007 - 50%) 34.5 35.9 Omchak operated four separate units in the Magadan Region, Amur Region and Yakutia Region, and produced c.69,000 oz of gold, a marginal decreaseof c.4% on 2006 levels. More than 85% was produced from alluvial placersand new alluvial deposits were brought into production to replace depletingassets. Exploration works were focused on replacing exhausted assets andthe commissioning of new deposits. In the Chita region, Omchak holds threelicences: Verkhne-Aliinskoye gold deposit, Bukhtinskaya area, and Kulinskoye orefield. Currently Omchak is actively exploring on all three, there is noproduction as yet. Russian Reserve Category C1 + C2 reserves at the Verkhne-Aliinskiy deposit were established at c.1.4mln tonnes of ore with average grades of 13.5g/t indicating c.615,000 oz of gold. It is planned to submit these reserves for approval by GKZ in the third quarter of 2008. Other Amur Region production In addition to development of its main projects and maintenance of alarge scale programme of exploration activities in the Amur Region, the Groupalso operates a number of smaller scale enterprises and joint ventures in theregion, benefiting from synergies possible with its existing operations. Theseinclude a number of alluvial operations and joint ventures with other producersworking in the area. Alluvial enterprises which exploit placer mine depositsusing dredging machinery and washing technology include those operated by OAOZDP Koboldo and ZAO Amur Dore which together mined 16,500 oz of gold in 2007(compared to 10,500 oz in 2006). In 2007, these companies also startedexploration and production of two new placer deposits. The Group's plan is toproduce c.16,400 oz of gold which would be attributable to the Group in 2008through these two operators. Another operating placer mining company, OOO Elgawhich was set up by the Group near the end of 2007 is planning to producec.3,500 oz gold in 2008. In 2007, OOO Odolgo, which is part of a joint venture betweenSolovyevskiy Priisk and the Group, commissioned a modular gravity processingplant, intending intensive cyanidation of the resulting concentrate. A unit forintensive cyanide processing of gold concentrates was installed at thePokrovskoye RIP plant in 2007 at which the concentrate from the Odolgo mill wasprocessed. In 2007, OOO Odolgo also won the auction for the Solovyevskayaexploration area in the Amur region. In the first half of 2007, a geologicalexploration project document was prepared and agreed, and geological explorationwork at this site was commenced in August 2007. Pioneer Mine During 2007 at Pioneer, efforts were concentrated on preparing thedeposit for commissioning in September 2007, which took place according toschedule. Mining works were carried out in order to complete geologicalexploration works and to prepare the deposit for operations. In previous years an open pit had been constructed on the Bakhmutzone. Additionally in 2007 work was started on four more open pits, one in thePromezhutochnaya zone, two in the Yuzhnaya zone, and one in the Andreevskayazone. As a result of the mining work at Pioneer in 2007, 1.1mln tonnes of orewere stacked to be processed through the mill in 2008. Mining works were carried out according to a mining plan whichincluded advanced stripping and preparation mining works. Mining works werecarried out by a mining fleet which included two EKG5 electrical excavators and3 Cat 330 diesel excavators, 8 Belaz trucks with a capacity of 30 tonnes and sixCat and Volvo in-pit trucks with a capacity of 38 tonnes each, six 32-tonneVolvo trucks, and three Cat D9R bulldozers. Waste rock was used as aconstruction material for building the main and subsidiary roads at Pioneer inorder to minimise capital expenditure. In September 2007, a new RIP plant was completed at Pioneercomprising crushing units, grinding mills, sorption and desorption units, a heapleach pad, and tailings storage. The new plant was commissioned on 24 September2007. With the commissioning of the Pioneer mill, batches of ore from the pitson the main ore zone (Bakhmut, Promezhutochnaya, and Yuzhnaya) were processedthrough the mill in order to calibrate the circuit for optimal gold recovery.The new technology of differential separation process between sands and slimeswas tested and proved successful. The coarse gold in the Andreevskaya ore did not allow for itstreatment through the Pioneer grinding circuit as it was not yet equipped withball mills; as a result this ore was sent to the mill at Pokrovka for bulktonnage metallurgical sampling. Over the winter period the balance of theAndreevskaya ore was stockpiled at Pioneer pending ball mill installation in thespring of 2008 as the first stage of the plant was constructed for the summercycle only. Towards the end of November 2007, all works on heat insulation ofthe buildings for the grinding mills and sorption units were finished. Thisallowed construction of the foundation for a ball mill in December 2007 whichwas installed during February-March 2008. Further development The continuous expansion of the Pioneer plant envisaged by theGroup's plan of development for the mine provides for the building ofinfrastructure, such as the mining camp, a garage for maintenance and parking ofmining equipment and roads. In December 2007 construction of a secondprocessing line in the RIP plant was commenced. Work started on initialpreparation for the crushing, grinding, and sorption buildings. Contracts fordelivery in 2008 of a SAG mill 7.5x2.5 and ball mill 4.0x6.0 manufactured inChina have been signed, and most of the construction steel for the second RIPline has been purchased. In the first quarter of 2008 a contract for the supplyof 13 large Cat777F trucks of 90 tonnes capacity for waste stripping and trucksof 45-55 tonnes capacity for ore transport was concluded. Further it is plannedto sign a contract for delivery of one EKG-5 excavator and two excavators of10m3 capacity. At present the Group is carrying out a closed-tender process forthe supply of this mining equipment. From December 2007, construction of asecond 35kV electricity transmission line was started, to provide a supply forthe second RIP processing line. It is planned to bring the second Pioneer RIPline into production by December 2008. Exploration The table below shows the reserves and resources estimates under the Russian classification system: Peter Hambro Mining Group Reserves & Resources SummaryAs at 1-1-08 Category Ore Gold Content '000 t kg oz'000 As at 1-1-07Reserves B+C1 44,303 68,201 2,193 1,826 C2 157,529 261,351 8,402 6,654 TOTAL 201,832 329,552 10,595 8,480 Resources P1 115,190 287,329 9,238 8,697 P2+P3 1,635,415 2,911,587 93,608 91,005 TOTAL 1,750,605 3,198,916 102,845 99,702Reserves & TOTAL 1,952,437 3,528,468 113,440 108,182Resources The Group reports its reserves and resources according to theRussian Reserves and Resources classification system which was approved by theState Committee on Reserves ("GKZ") in 1965 (as amended in 1981 and 2008) sincethis is its functional reporting system ("The Russian System"). The RussianSystem is based principally on the degree of geological knowledge and thetechnical ability to extract a mineral reserve. Although economic considerationsform a part of the justification for A, B, C1, and C2 category reserves, thesystem does not take into account the economic viability of extraction in thesame way as JORC, 43-101 or other internationally recognised mineral reservesclassification codes. Licence holders must register A, B, C1, and C2 categoryreserves with GKZ to be able to extract them (depending upon the structuralcomplexity class of the deposit. Gold deposits are usually in complexity class 3or 4 which require categories C1 and/or C2 only; categories A and B are rarelyif ever recorded for such deposits). Part of the Group's C1 and C2 reserves areunregistered. Failure to register does not per se impose any sanctions on anyGroup company. Once registered, reserves are included in the Russian nationalmineral inventory, the State Balance. If marginal or only potentially economic,or currently unviable for technical reasons, they may alternatively be recordedas 'out of balance' reserves. It should be noted that of the P Categoryresources, P1 is supported by drilling whereas this is not necessarily the casefor P2 and P3, which are based on management estimates. It should be noted that there is no equivalent of P2 and P3 categories in JORC or other international reporting systems. In 2007, Wardell Armstrong International were contracted toreview the Group's reserves and resources, and in particular to report on thoseresources for which Joint Ore Reserves Committee ("JORC") estimates could bequoted. In particular, they examined those deposits for which geological orebody models had been created (using the Micromine software) by Moscow-basedconsultants Micromine. As a result of this exercise, the Group published JORCresource estimates for Pokrovskiy, for the main ore zone at Pioneer, and for thecentral part of the Diagonal ore zone at Malomir. The Russian figures in thetable above are inclusive of the ore bodies for which JORC estimates werequoted. It is anticipated that JORC classification reserves and resourcesfor Pioneer and Malomir will be updated during this year in the course ofpreparation of the Company for a full listing on the Main Market of the LondonStock Exchange by the end of 2008. In 2007, the Group undertook exploration works on more than 20projects in the Amur, Magadan, Chita, Yamal Regions and Buryatia Republic. Threenew licence areas were acquired through various auctions and tenders. About US$130mln was spent by the Group on exploration and development in 2007. Theexploration and development budget for 2008 is c.US$254mln. The table below sets out the amount of exploration work completed in 2007: 2007 2006Trenching(m3) 872,545 908,225Core drilling(m) 83,154 64,170Shallow drilling(m) 58,493 32,988 In 2007, there was an intensive exploration programme on Pioneer,Malomir, and Petropavlovskoye (Yamal) in particular. The result of this increased exploration effort is a substantialimprovement in confidence in resource and reserve estimates, which lendsconfidence to the Group's planning for production from these deposits. Pokrovskiy and flanks In 2007, exploration works were carried out on the margins of theexisting pit and at satellite sites of the Pokrovskiy deposit. In 2007, c.40,000oz of additional C2 reserves within the open pit mine area, and c.55,000 oz ofC1 reserves outside the pit boundaries, were identified. On the flanks of thePokrovskiy deposit, exploration continued with the purpose of extending thePokrovskiy Rudnik mine life and providing Pokrovskiy mill with high quality oreuntil 2012. At the Pokrovka-2 site located approximately 1.5km from thePokrovskiy RIP plant, an intensive programme of drilling and trenching hasfinally elucidated the complex geological structures and has shown that apartfrom the gold in fanglomerates, within a zone around a basement ridge structure,there are a number of ore bodies within the basement, geologically andmineralogically similar to the main Pokrovskoye ore types. Of particularimportance are the unconsolidated fanglomerate deposits which, although inwhole-rock terms of low grade, can easily be upgraded by washing to produce oresimilar in quality to that from the main Pokrovskiy mine. Metallurgical testwork and hydrogeological studies are in progress, and the site is being preparedfor approval of reserves in 2009. The Bazovaya ore zone, at the eastern side of the originalPokrovskiy exploration licence area, has now been explored in more detail andits structure is understood. It is in the form of a shallow inverted saucer,and, lying entirely within the oxidised zone, would be amenable to simpleopen-pit extraction and heap leaching. Exploration continues on the 100km2 of Sergeevskaya licence areawhich surrounds Pokrovskiy Mine. The first promising results were acquired atthe Velikiye Luzhki and Anatolyevskaya areas to the south of Pokrovskiy Mine,Proletarskaya area to the west, and Zheltunak to the east. Although still at anearly stage, mineralised zones have been confirmed in the first three of theseareas, and more detailed exploration is planned for 2008. Pioneer At Pioneer, the principal efforts in 2007 were concerned withdelineating the Andreevskaya ore zone and understanding its structure. Thisallowed the identification of at least three ore shoots with high grades ofgold, as well as silver, and the discovery of an ore body geometrically similarto Apophysis 1 at the junction of Andreevskaya zone with a newly discovered zonenamed Prikontaktovaya. It appears that the Prikontaktovaya zone itself, trendingNE-SW, may extend SW for up to 5km to link with the Babayevskaya ore zone -which has a similar trend and was discovered in 2007 during geological siteinvestigations for the new processing plant. The pre-stripped area at Andreevskaya has now been developed intoan open-pit mine currently just 10m in depth for pilot-scale production. At the Bakhmut ore zone infill drilling on a grid 40 x 40-60midentified a second ore shoot which was predicted previously in the area of theexisting engineers' camp. Continuation of the ore zone as far as the left bankof the river Ulunga has been confirmed by drilling, and it is likely to continuefurther eastwards. Malomir With detailed exploration (trenching and deep core drilling), theevaluated section of the main Malomir deposit has now been extended laterally toa length of 1km, and to a depth of 200m. The ore zone has been traced as far asthe Malomir river valley in the north-east and is continuous with themineralisation on the Ozhidaemoye deposit to the north of the river. Metallurgical tests indicate that Malomir primary and mixed orewill produce 80% recovery by flotation alone, or 85% with flotation plus gravityseparation, and there can be further improvement on recovery from the primarysulphide-bearing ores, by use of autoclave oxidation. Published JORC resource estimates are based on modelling carriedout in 2007. The models are currently being revised to reflect the large amountof recent exploration and resulting substantial increase in resources. Mineplanning is at an advanced stage, with associated work (such as metallurgicaltests, hydrogeological, and geotechnical investigations) nearly completed.Continued exploration is in progress to locate suitable water supplies for theMalomir mill, as well as locally source building stone. Exploration on the Ozhidaemoye deposit has allowed the delineationof six ore zones above the Diagnoal fault structure, which are geologically verysimilar to the main Malomir deposit. Detailed exploration will continue in 2008to delineate resources in preparation for mine planning. The Quartzite deposit, lying to the west of Ozhidaemoye, has beenexplored by both trenching and drilling, and an area has been pre-stripped inorder to assess the morphology and continuity of the ore zones. It was foundthat the structure of the ore zones is more complex than expected, and moredetailed exploration (on a closer grid) will be needed in order to obtainreliable identification and delineation of ore zones. There are about six orebodies of thicknesses varying up to 26m. Metallurgical studies on bulk samplesof oxide and primary ore are not yet completed, but the ore appears similar incharacter to the main Malomir deposit. Reductions in cutoff grades allowed bycurrent and anticipated gold prices may allow simplification and considerableenlargement of ore body outlines, and possible development of a pit for earlyheap leach treatment of a large tonnage of oxide ore. With intensive exploration on the Malomir deposit in 2007,extending the evaluated zone from 400m to 1km along strike, the estimatedreserves and resources have been increased to 2.193mln oz category C2 reserves(up from 1.469mln oz as at 01.01.07) and 1.242mln oz category P1 resources (upfrom 0.469mln oz as at 01.01.07), an overall increase of 77% in category C2+P1reserves and resources. Total Malomir area estimated resources/reserves (C2+P1)have increased from 2.88mln to 4.33mln oz as at 01.01.08. Albyn Acquired in 2005, this 40km2 licence area, 40km south-east ofTokur, includes the Albyn ore zone, with a traced length of 6,400m, located500-1,000m south of the known and the previously worked Kharga (Kharginskoye)deposit. The Albyn ore zone is an extensive east-west trending thick(50-120m) mineralised metasomatic zone, controlled by a gently dipping thrustfault. Exploration undertaken in 2007 includes trenching and drilling over astrike length of 4.5km, in the zone of mineralised albitites, now explored asfar as the eastern boundary of the licence area. Gold is present in these rocks, sometimes as coarse visible grainsup to 2mm in size. Gold grade in the ore bodies ranges from 0.6 to 38.9g/t, withan average of about 2.5g/t. The average thicknesses of the three main ore bodiesare 2.7m, 5.4m and 5.5m, but varying from 0.8m to 17.9m. The deposit is opendown-dip and along strike in both directions. An estimate of resources so far,over the explored area within the licence area boundary, at category P1resources, is 1.6m oz of gold, for open-pit working to 150m depth. This excludesthe Kharginskoye deposit veins, which can also be re-evaluated for potentialopen-pit exploitation by a number of separate smaller pits, with one or moreveins per pit. Intensive exploration in 2007 has extended the evaluated zonefrom 1km to over 3km along strike, and increased the estimated reserves andresources from 0.6mln oz to 1.6mln oz. The intention in 2008 is to completeexploration on the main albitite zones upgrading the resource categories inorder to finalise a mining plan. Three metallurgical samples have been taken andare currently being tested by Irgiredmet. Other Amur region projects Exploration is actively proceeding on many other licence areasin the Amur region. In particular, the Kirovskoye and Taldanskoye areas (to thewest of Pokrovskiy) are both already yielding very promising results fromtrenching and drilling, to confirming old data and to checking areas ofgeochemical anomalies. Taldan, according to existing data, contains estimated 240,000oz of gold P1 category resources, already identified, in the Burinda epithermaldeposit, before exploration efforts have started to expand and upgrade theresource base. Gold grades at Burinda found so far are up to 17g/t and silver upto 160g/t. On the basis of preliminary work done, it is estimated thatKirovskoye includes a Russian C2+P1 reserves and resources of over 0.5mln oz,with, additionally, P2 resources estimated at 1.6mln oz. Future work is aimed atactively expanding this resource base as well as upgrading the resourcecategories. At Aprelskoye, exploration is at a very early stage but alreadyin 2007 trench exploration has intersected and confirmed several of themineralised structures indicated by geochemical and geophysical anomalies, andsurface samples of mineralised material have yielded gold grades up to 50g/t. YAMAL Novogodnee Monto and Petropavlovskoye In 2007, exploration works on the Novogodnee Monto deposit whichcontains two main types of mineralisation, gold-magnetite and gold-quartz, werefinalised and the Regional Committee for Natural Resources (TKZ-Yamalnedra)approved the feasibility study for the Novogodnee Monto mine. Active developmentfor an open pit mine is now under way. Metallurgical studies have shown thatmost of the gold in the magnetite ore is present in a free state and can berecovered by cyanide leaching. The recommended processing route consists ofinitial crushing/grinding followed by wet magnetic separation, and extraction ofseparate gold concentrates from both magnetic (by flotation/cyanidation) andnon-magnetic (by gravity/flotation/cyanidation) fractions. The unmineralised host rocks of the deposit have suitablemechanical properties for use as building materials (aggregate, ballast, etc.).The ability to sell much of this 'waste' from the deposit to meet a large andgrowing local demand (the Yamal peninsula is a major centre of natural gasdevelopment, and there are many construction projects), makes a substantialcontribution to the economics of the Novogodnee Monto project. The Petropavlovskoye deposit is located 1km to the west ofNovogodnee Monto. Intensive exploration (drilling, trenching, and pre-stripping)in 2006 and 2007 has delineated the main ore zone, and there is now a good3-dimensional model of the ore body. Gold occurs in quartz veins and stockworkscutting beresitic metasomatites. Exploration continues in 2008 with theinvestigation of high-grade gold-bearing quartz veins around the margins of thestockwork. Bulk samples have been taken for metallurgical testing. As atNovogodnee Monto, there is potential to sell much of the unmineralised 'waste'rock as building material (15m tonnes estimated, at category C2, within thedesigned pit outline). In 2008, intensive work is scheduled to continue onPetropavlovskoye, with expected approval of resource/reserves estimates alreadysubmitted, and preparation of a detailed mine design as part of a feasibilitystudy which is expected to be completed by the end of 2008. Toupugol-Khanmeishorskaya area In the north-western area of the licence, drilling has proved anorth-south metasomatic mineralised zone resembling the Petropavlovskoyedeposit, as well as gold-bearing magnetite/sulphide lenses up to 200m long andseveral metres thick - similar to the Novogodnee Monto ore. Detailed explorationcontinues in these areas to delineate the deposits as potential further sourcesof ore for Novogodnee Monto and Petropavlovskoye mill feed. Ozernoye Drilling in 2007 has confirmed three steeply dipping ore bodieswithin the pyroxenite layered complex, with PGM+Au grades in the range 0.5 to1.5g/t as well as associated base metal sulphides. Metallurgical samples arecurrently being studied at the group's research centre Irgiredmet, to assess thepracticability and economics of processing this material. 2008 Production Forecast & Outlook PHM currently estimates that attributable gold production in2008 will be 350,000 oz to 400,000 oz. Because of the effect of weatherconditions on the large heap-leach activities at Pioneer it has been decided toprovide a range rather than a single target for 2008 production. Assuming all goes well however, the lowest target of 350,000 ozwould be a 24% increase on 2007 and it is estimated that it would be made up ofc.225,500 oz from Pokrovskiy and c.72,000 oz Pioneer, 42,000 oz from Omchak andthe remaining ounces from the Group's interests in other Amur region assets. Anyappreciation in the US dollar value of the rouble, the Group's operatingcurrency, and inflationary pressures on raw material costs may well cause anupward pressure on operating costs. Corporate The Group's average realised gold price for 2007 was US$668/oz,up 14% against that achieved in 2006. The rouble strengthened against the dollarby c.7% during the period and was RUR24.55/US$ at 31 December 2007 (RUR26.33/US$ - 31/12/06). The Group has a policy of no long term gold forward sales or hedging. The Board is today proposing a maiden final dividend of 7.5 pence per share (net), which will be subject to shareholder approval at the AGM on 25 June 2008. This final dividend is expected to be paid on 1st August 2008to shareholders on the register as at 20 June 2008. Subject to the Group'sresults, the Board would expect to pay interim and final dividendsof approximately equal amounts, with the interim dividend being paid in Octoberand the final dividend in July / August of the following year. The Boardconsiders that the currently proposed dividend level is appropriately coveredand is consistent with the Company's development spending. During 2007 the Group successfully converted to IFRS accounting. Convertible Bonds On 19 October 2007 the Group raised US$180mln by issuing 5 yearBonds that are exchangeable into the cash equivalent of in aggregate 180,000Troy oz anytime from October 2009. Details of the issue of the Bonds are contained in the pressrelease dated 17 October 2007 and the Fiscal Agency Agreement dated 19 October2007. The Bonds were issued at par by the Company's wholly-owned subsidiaryPeter Hambro Group Finance Limited ("PHM Finance") and are guaranteed by theCompany. Gross proceeds of the Bonds' issue were US$180mln. The Bonds carry acoupon of 7% per annum payable semi-annually in arrears and are exchangeable atthe option of the holders into the cash equivalent at the time of the exchangeof (in aggregate) up to 180,000 Troy oz of gold at any time from the secondanniversary of the settlement of the bonds up until 20 days prior to thematurity of the Bonds. PHM Finance has the option to call the Bonds at par plusaccrued interest after the fourth anniversary of the settlement provided thatthe London afternoon gold price fixing reaches a level of US$1,500 per Troy oz,with holders retaining the right to convert within the call period up to thefifteenth day before the date fixed by the call for redemption. If not exchangedor previously redeemed the Bonds will be redeemed at par on 19 October 2012. IFRS accounting treatment of the embedded derivatives within the Agreement (thegold call option and the purchased cap on the gold price) The IFRS accounting standards, which were adopted by the Groupprior to its intention to move to a Main Board listing, required the Group, atthe time the Bonds were issued, to recognise the fair value of the Options (asdefined below). Within the Bond terms, two implied derivatives exist: theoption for the Bondholders to exchange their Bonds into the cash equivalent atthe time of the exchange of (in aggregate) up to 180,000 Troy oz of gold at anytime from the second anniversary of the issue date up until 20 days prior to thematurity of the Bonds (the "Written Option"); and the cap, whereby PHM Financehas the option to call the Bonds at par plus accrued interest after the fourthanniversary of issue provided that the London afternoon gold price fixingreaches a level of US$1,500 per Troy oz, with investors retaining the right toconvert within the call period up to the fifteenth day before the date fixed bythe call for redemption (the "Cap"). Since the Written Option and Cap (together the "Options") arepart of the same contract they can legally be and will be settled net as part ofthe one contract. At each balance sheet date the Group needs to mark to marketand thus determine the fair value of the embedded derivatives, and a non-cashcharge for any movement goes to the income statement. At time of the issue of the Bonds, the Options valuation wasindependently recognised as a c.US$19.6mln reduction in Group liabilities, sincethe Group had notionally sold and bought the options. IFRS accounting providesfor the c.US$19.6mln reduction in Group liabilities to expire over the life ofthe Options. It should be noted that this is an accounting item which does notcurrently affect the cash flows of the Group. The Group is required to recognisethe fair value of the Options in the Group's accounts, and restate that value ateach balance sheet date, but the Group is not subject to margin calls nor is itcurrently required to make any cash payments. Were the Group to have issued conventional debt on the same termsbut without the gold exchangeability option it would be paying an estimatedcoupon of c. 11.5% as opposed to 7% with the current bonds. At the Group's 31 December 2007 balance sheet date, the increasein the gold price and the gold price volatility caused the negative fair valueadjustment to the Group's income statement to increase to c. US$12m andsubsequent increases brought this negative adjustment to the order of US$32m inMarch 2008. Neither of the adjustments has current cash implications for theGroup. The fair value adjustment simply represents an estimate, based oncurrent market conditions, of the change in the value of the bondholders' optionto exchange the bonds for cash, from September 2009, on the terms set out above.If the option were to be exercised, the fair value adjustment would be reversed,and replaced with the actual difference between US$1,000 and the spot price atthe date of conversion. Any such difference would represent an allowable cost tothe Group at that time. Economic implications The inclusion of the Options in the Bond's structure will save theGroup approximately c.US$41mln in real cash interest costs over the 5 year lifeof the Bonds, based on an annual cash coupon saving of 4.5%. If the Written Option is exercised, selling the underlying 180,000oz of gold at US$1,000/oz, rather than at the US$700/oz price prevailing at thetime of the issue, would add approximately US$54mln real cash to the Group'ssales proceeds. In the event that the gold price remains above US$1,000/oz whenany Bonds are redeemed the Group will forego an opportunity cost of US$180,000for every US$1.00 of price increase over US$1,000 per Troy oz as a result ofincluding the implied derivatives in the Bonds. However it will gain a similaramount in 2008 and twice as much in 2009 as production increases. This method of funding has been extraordinarily favourable to theGroup, enabling it to raise money without issuing equity and to do so during theso called "credit crunch" when the market for conventional funding has almostcompletely dried up. Annual Report & Accounts The Company intends to publish and distribute its Annual Report and Accounts forthe year ended 31 December 2007 on 19 May 2008. This report will contain a more detailed analysis of the work undertaken by theGroup during the period, notes to the accounts and a breakdown, by deposit, ofthe Group's reserves and resources and production. The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 December 2006 but is derived fromthose accounts prepared under International Financial Reporting Standards("IFRS"). The results for the year ended 31 December 2007 are unaudited andwill be approved by the directors on 19 May 2008. Statutory accounts for theyear ended 31 December 2006 have been delivered to the Registrar of Companies,and those for the year ended 31 December 2007 will be delivered followingapproval of the Accounts by the Board of Directors and at the Company's AnnualGeneral Meeting. The auditors have reported on the financial statements for theyear ended 31 December 2006; the report was unqualified and did not containstatements under section 489(2) or (3) of the Companies Act 2006. The resources and reserves estimates have been reviewed by Dr. Stephen Henley,who is an independent geological advisor to the board of directors of PeterHambro Mining Plc. Dr. Henley is qualified to act in the capacity of a CompetentPerson for the purposes of this statement of reserves and resources. Dr. Stephen Henley holds a PhD in Geology (University of Nottingham, 1970). Heis a Fellow of the Geological Society, a Fellow of the Institution of Materials,Minerals and Mining, and a Chartered Engineer. He is also a Charter Member ofthe International Association for Mathematical Geology. He has been employed inexploration, mining, academic, and geological consultancy posts since 1970 andhas participated in Competent Person studies on a variety of different mineralsand types of deposit, including gold, polymetallic, and chromite projects. Dr. Henley is currently chairman of PERC (the Pan-European Reserves andResources Reporting Committee, European equivalent of the Australasian JORC),and convenor and secretary of a CRIRSCO working group on harmonisation ofRussian and international reserve reporting systems. Dr. Henley owns no direct or, to the best of his knowledge, indirect interestsin the shares or securities of Peter Hambro Mining Plc or of any of itsassociated or subsidiary companies and does not expect to receive direct orindirect interest in any of the Company's projects or in the shares andsecurities of the Company. The Board of Directors commissions a semi-annual independent review of theexploration and development work of the Group and the Group's reserve andresource estimates. The Summary of this review has been compiled by Dr. StephenHenley and reviews all current exploration works being conducted by the Group. Peter Hambro Mining Plc will publish an Executive Summary of this review todayon the Group's website. Please visit our website: www.peterhambro.com where you will be able to downloadthe summary from a link on the home page. Conference Call There will be a conference call today to discuss the announcement at 14:00(London time). Details to access the conference call are as follows: The dial-in number in the UK will be: 0844 493 3800 and internationally will be:+44 (0) 1452 555 566 with the conference ID in both cases: 43708353. Replay will be available after the call has finished for seven days on: 08009531533/ 0845 245 5205 in the UK and on +44 (0) 1452 55 00 00 internationallywith the access code in both cases: 43708353# This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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