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. Last Updated: 07/27/2016

Hambro in $150M Bond Issue

Peter Hambro Mining on Friday launched an offering of up to $150 million of gold equivalent exchangeable bonds to raise financing for development and exploration of gold assets in Russia.

The bonds, due to mature in 2012, will be issued at par and will carry a coupon of 7 percent payable semiannually in arrears, the London-listed company said in a statement.

JPMorgan Cazenove is organizing the offering.

"This capital raising provides us with greater funding certainty and the ability to accelerate and expand our exploration and development plans," executive chairman Peter Hambro said.

The bonds will be exchangeable into the cash equivalent of 150,000 ounces of gold at the time of exchange any time from the second anniversary of the settlement until 20 days prior to their maturity. The conversion price of $1,000 per ounce represents a premium of about 38 percent to the price of gold in London on Thursday.

Peter Hambro Mining, the country's second-largest gold miner, said it intended to use the funds raised by the offering to develop the Malomir gold deposit, in the Far East, and the Yamal assets in the Arctic. Proceeds will also go toward enlarging the processing plant at the Pioneer deposit, also in the Far East, and to fund the exploration and development of other group assets.

"The 150,000 ounces which are the subject of the option we have granted represent less than half our anticipated production in 2008 and an even smaller proportion when the new projects are on stream," Hambro said.

Peter Hambro Mining produced 261,000 ounces of gold in 2006, 4.9 percent of the total in Russia.