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Peter Hambro Mining (POG)

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Wednesday 04 December, 2002

Peter Hambro Mining

Acquisition Update

Peter Hambro Mining PLC
04 December 2002

                        PETER HAMBRO MINING PLC ("PHM")

  Proposed Acquisition of Further Shares in JSC Pokrovskiy Rudnik ("JSCP") and
                               Production Update

Peter Hambro Mining PLC ("PHM") has reached agreement with the owners of
20,354,444,448 shares in JSCP (the "Sale Shares") (representing 22.69% of JSCP's
issued share capital) that it will acquire this stake in consideration for the
issue of 11,144,593 new ordinary shares of 1p nominal value each in PHM which
will rank pari passu with the existing issued ordinary shares (the "Acquisition
").  It is intended that an application will be made for these new shares to be
admitted to trading on AIM.  This transaction was the subject of a preliminary
announcement on 30th July 2002.

The transaction is subject to the approval of PHM's shareholders and therefore
an Extraordinary General Meeting has been called for 19th December 2002. At the
EGM the Board will seek shareholders' approval of the Acquisition and of a
waiver to be granted by the Panel on Takeovers and Mergers ("The Panel"). An
explanatory letter to PHM shareholders (the "Circular") was posted yesterday and
is available at PHM's registered office and on the company's website,

The agreement, which will increase PHM's ownership of JSCP to 97.69%,
constitutes both a substantial transaction and a related party transaction for
the purposes of Rule 11 and Rule 12 of the AIM Rules.  The vendors of the Sale
Shares are Viscaria Investments Limited and Macaria Investments Limited.  Dr
Pavel Maslovsky, a director of both JSCP and PHM, is the beneficial owner of the
Sale Shares.

Following implementation of the Acquisition, Dr. Pavel Maslovsky and persons
associated with him (the "Maslovsky Associates") will own 48.65% and Peter
Hambro and persons associated with him (the "Hambro Associates") will own 16.75%
of PHM.  The Panel regards the Hambro Associates and the Maslovsky Associates to
be acting in concert.  Under Rule 9 of the Takeover Code, in these circumstances
these shareholders would, as a result of the issue of the shares pursuant to the
Acquisition, be required to make a general offer for PHM unless a waiver is

The Panel has confirmed that, subject to the Resolution being passed on a poll
by Independent Shareholders at the EGM, no mandatory bid obligation under Rule 9
would be triggered by virtue of the respective holdings of the Hambro Associates
and the Maslovsky Associates and any allotment and issue of further PHM Shares
to members of the Maslovsky Associates pursuant to the Acquisition agreement or
the acquisition of PHM Shares by Maslovsky Associates or Hambro Associates
pursuant to the share plan adopted by the Group.

The Hambro Associates and Maslovsky Associates will not vote at the
Extraordinary General Meeting.

Further details are to be found in the Circular.

Production Update

As announced on 25th September 2002, JSCP commissioned the new resin-in-pulp ore
treatment plant and first gold from this production facility was produced on 7th
September 2002.  Since then the mill has been the subject of normal fine tuning
modifications and is now considered to be performing according to its 1 million
tonnes of ore per year design capacity.

This means that, instead of relying on a seasonal heap-leach production facility
with 53% recoveries of gold from the ore, JSCP is now a year-round producer with
recoveries from the mill currently achieving 92%.

During the summer months, in order to preserve the higher grade material to
maximise the potential of the new mill when it started, mining was concentrated
on lower grade ore, which then was placed on the heap-leach pads.  It was
expected that technological advances in the heap-leach recovery process,
including the installation of finer crushing facilities, would compensate for
the lower grade but experience has shown that, although this was partially true,
longer residence times on the pad were needed.   This has resulted in
anticipated production from the heaps being lower than expected by about 15,000
ounces in 2002, although this gold is expected to be recovered in the ensuing
months.  The increase in the gold price since Admission is expected to
compensate in part for this lower production.


Peter Hambro                                         020 7393 0102
Peter Hambro Mining PLC

David Simonson / Nicola Davidson                     020 7606 1244
Merlin Financial

                      This information is provided by RNS
            The company news service from the London Stock Exchange