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. Last Updated: 07/27/2016

Peter Hambro Boosts Output by 5% in '06

bloombergThe firm also said questions over mining licenses had been resolved.
Peter Hambro Mining, the country's third-largest gold miner, raised output 5 percent to 261,000 ounces last year and said Monday that it had resolved questions over mining licenses, boosting shares more than 4 percent.

Analysts said the higher-than-expected output should help Peter Hambro shares return to levels prior to comments last November by the Natural Resources Ministry's environment inspectorate that wiped one-third off the London-listed company's market value. Long-term growth would depend on the miner's ability to take output beyond 1 million ounces by 2009 as planned, they said.

"It's a good development, but it's not critical. What I'd call critical is the confirmation of the company's resource base," said Vladimir Zhukov, senior mining and metals analyst at Alfa Bank.

Peter Hambro shares tumbled late last year after Oleg Mitvol, deputy head of the environment inspectorate, said affiliated companies had not fulfilled license agreements.

Shares recovered after Mitvol, in a meeting with executive CEO Peter Hambro, said the company's main assets in the Amur region had not breached licenses.

"I am pleased to note that the questions on our mining licenses which arose in December 2006 are now resolved," Hambro said Monday.

John Meyer, director of mining and metals research at Numis Securities, added: "The political risk appears to have reduced as the company looks to have successfully defended its license and environmental position against Mr. Mitvol."

Peter Hambro Mining said it sold gold at an average $586 per ounce in 2006, up 33 percent from the average sales price a year earlier.

"This is disappointing considering the average gold price seen in the market of $604 an ounce in 2006," Meyer said.

With gold prices seen rising in 2007, Hambro was more upbeat: "The outlook for 2007 is once again encouraging, as the gold price continues to move in our favor and our production grows."

Gold prices hit a 26-year high last year. A poll of 42 analysts forecast a 6.4 percent year-on-year increase in gold prices in 2007.