26th Feb 2007 07:03
Peter Hambro Mining PLC26 February 2007 26 February 2007 Production Plan Update Peter Hambro Mining plc ("PHM" or "the Group") will publish, at an AnalystWorkshop to be held today at 11:00am, updated business plans for its Pioneerdeposit and a review of progress at its other deposits. The presentation of thebusiness plans and progress review will be published simultaneously on thecompany's website www.peterhambro.com and the presentation will be webcast. An executive summary of the second half 2006 semi-annual independent review ofthe Exploration & Development work of the Group commissioned by the Board ofDirectors will be made available at www.peterhambro.com. Highlights of the Presentation Pioneer Deposit - Following comprehensive drilling, trenching and trial mining there is a substantially increased confidence in reserves and resources. This should enable large scale mining to commence in 2007. - Development programme results in forecast production of 3.2m ounces in aggregate over 13 years. Russian reserves and resources estimate is similar to 2006 estimate 69.6m tonnes at 1.6g/t in C2 and 15.4m tonnes at 2.1g/t in P1 containing c.4.7m oz of gold in aggregate but this year is not reliant on the inclusion of any P2 resources. - Highly positive economic mine plan based on Micromine, a JORC compliant software programme. - High-grade ore zones (columns) predictions have been confirmed by drill intersections but detailed exploration will only be undertaken during the mining process. Additionally both Russian and JORC methodology ignores areas of extreme high grades. Accordingly there is a possibility that the production economics will improve once mining is underway. - Exceptionally high grades of gold newly identified at Andreevskaya ore body within the Pioneer complex. • Average grade 32.8 g/t for 450 metres length to depth of 90 metres and open at depth and at both ends. • Estimated so far to contain 550,000 ounces of gold. • The ore body is open at depth and both ends; it has already been traced for an additional 730m strike length. - Processing plan to include: • Substantial 2.9mt of ore per annum heap leach operation at Pioneer. • Construction of large 5.2mt of ore per annum RIP plant at Pioneer (not trucking high-grade ore to Pokrovskiy as previously planned). • Modular expansion of mill forecast to treat primary ore from 2014. - Production start-up is on schedule for Q4 2007. - Capital expenditure forecast to December 2009 of US$87m is generally in line with last year's US$81m. - Further expansion plans to include the expansion of the plant totalling US$53m by 2013. - Forecast mining and processing operating costs at the lower end of previous estimates. Malomir Deposit - Extensive development programme underway with infrastructure construction and confirmation exploration (drilling, trenching and trial mining). - Estimates this year based entirely on new detailed exploration and all data from predecessors is excluded. - Development programme has provided further confidence in estimation of reserves and resources. - 2007 estimates exclude steep-dipping high-grade ore zones poorly sampled by the drill holes. - Shallow open-pit constructed for exploration purposes is planned to be used for pilot-scale production. - Greater volumes of mineralised material identified. - Further evidence supporting existence of 2 additional ore zones has led geological team to delineate 3 deposits in total. - Development programme success leads to requirement for further analysis of central and other deposits. - Detailed implementation plan for Malomir (similar to Pioneer) is being developed and is intended to be released before the year end. - 2008 start-up postponed for 6-12 months. Pokrovskiy and Flanks - Exploration continues, with good grades identified. Update on development plans expected to be available in the second half of 2007. - Promising results from new areas acquired at the beginning of 2006 were received. - Estimated project plans and economics unchanged pending completion of analysis. YamalZoloto - Feasibility studies on Novogodnee Monto and Petropavlovskoye nearing completion, investment decision is expected in the fourth quarter of 2007. - Ozernoye exploration results established presence of reefs containing gold, PGM and base metals which could be extremely valuable. Possibility of Bushveld style PGM mineralisation. Funding - Current internal economic planning suggests a maximum external funding requirement of c.US$100 million in the period from Q3 2007 to Q4 2008. Plans are underway to support this requirement with project or corporate debt. Other than normal working capital facilities and the convertible bond the Group has no debt outstanding. Commenting on the announcement, Peter Hambro, Executive Chairman of the Groupsaid:- "Pioneer has shown its strength yet again; with our previous estimates beingconfirmed by the development programme and exploration success at Andreevskaya,with an average grade of 32.8 grammes of gold per tonne of ore, demonstratingthe predictive capabilities of our geological team. This announcement containsdetailed plans for the next-stage development of our assets - most immediatelybringing into production the Pioneer deposit - and I believe that the level ofdetail we are providing should give confidence about the project. We are now well underway with our substantial growth programme. I hope thatwith regular and full disclosure of both our production plans and theexploration and development results at each project, we will strengthen marketconfidence in the team's ability to deliver on our forecasts." There will be a conference call at 14:00 (London time) today 26th February 2006entitled "Production Review Announcement". Details to access the conference call are as follows: The dial-in number in the UK will be: 0845 245 3471 and internationally it willbe +44(0)1452 542 300. Replay will be available after the call has finished for seven days on 0845 2455205 in the UK and on +44(0)1452 550 000 internationally with the access code inboth cases 8366978#. Enquiries: Alya Samokhvalova, Director of +44(0)207 201 8900External Communications www.peterhambro.comor Marianna Adams at Peter Hambro Mining David Simonson or Tom Randell at Merlin +44(0)207 653 6620 Patrick Magee at JP Morgan Cazenove +44(0)207 155 4525 Appendix The presentation will contain the following updated estimates of capitalexpenditure, resources and expected production profile. CapEx US$'mln as reported in 2007 US$'mln as reported in 2006 Projects Pioneer* 140 81Malomir 112 112Pokrovskiy 134 134flanksOthers 7 - TOTAL 393 327 *US$140m includes US$87m spent up to December 2009 vs. US$81m as reported in2006 in view of plans to construct resin-in-plant (RIP). The remaining capex ofUS$53m will be spent between 2010 and 2013 on expansion and development of theplant to process primary ore. Pioneer reserves and resources C2 P1 Ore zone Au, Ore, Grade, Au, Ore, Grade, ('000oz) ('000t) g/t ('000oz) ('000t) g/tBakhmut 717 16,608 1.3 203 1,160 5.4Promezhutochnaya 371 6,985 1.7 124 2,750 1.4Yuzhnaya 2,003 45,480 1.4 421 10,900 1.2Andreevskaya 574 543 32.8 286 600 15.0TOTAL 3,665 69,616 1.6 1,034 15,410 2.1 Group production profile, '000oz 2006 2007 2008 2009Pokrovskiy 206 198 191 191Pioneer - 19 144 395Malomir - - 95 286Other 11 10 50 80Pokrovskiy Flanks - - - 165TOTAL 217 227 480 1,117 Attributable production numbers exclude production from JVs. Total attributableproduction in 2006 was c.261,000 ounces. All references to reserves, resources, and exploration results that wereincluded in the release were approved for release by Dr Stephen Henley, C Eng.,PhD, FIMMM, FGS, Managing Director of Resources Computing International Ltd, whohas more than 26 years experience in the field of activity concerned and is aCompetent Person. Dr Henley has consented to the inclusion of the material inthe form and context in which it appears. DISCLAIMER Past performance of the Company or its shares cannot be relied on as a guide tofuture performance. Some statements contained in this release and the associated presentation or indocuments referred to in it (the Documents) are or may be forward-lookingstatements. Actual results may differ from those expressed in such statements,depending on a variety of factors. Any forward-looking information contained in the Documents has been prepared onthe basis of a number of assumptions which may prove to be incorrect, andaccordingly, actual results may vary. Investors must be aware that onlyPokrovskiy main pit and Pioneer reserves have been approved by the Russianauthorities as extractable. However the assumptions used in the Documents arebased on other reserves having been approved for extraction. No assurances maybe given that the Russian licensing authorities will approve any of the Group'sother reserves for extraction. Any mining, engineering and business plansprepared by the Group are based on the Group's interpretation and understandingof the current business, regulatory or political circumstances in Russia and inthe gold market and may be subject to change should any of these circumstanceschange. The Documents do not constitute, or form part of or contain any invitation oroffer to any person to underwrite, subscribe for, otherwise acquire, or disposeof any shares in Peter Hambro Mining plc or advise persons to do so in anyjurisdiction, nor shall they, or any part of them, form the basis of or berelied on in any connection with or act as an inducement to enter into anycontract or commitment therefore. No reliance may be placed for any purposewhatsoever on the information or opinions contained in the Documents or on theircompleteness and no liability whatsoever is accepted for any loss howsoeverarising from any use of these documents or its contents otherwise in connectiontherewith. This press release and associated presentation has been prepared in compliancewith English law and English courts will have exclusive jurisdiction over anydisputes arising from or connected with this presentation. The content of this press release has been approved by JP Morgan Cazenove asnominated adviser to the Group. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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