Peter Hambro Mining PLC
10 July 2003
For release on 10th July 2003
PETER HAMBRO MINING PLC
Establishment of Joint Venture ZAO "Omchak" in Magadan Region of Russia with
Susumanzoloto and Shkolnoe
Acquisition of 100% of Kolyma Bank in Magadan
Establishment of Joint Venture
Further to the announcement on 17 February 2003, Peter Hambro Mining PLC ("PHM")
announces that it has completed formalities with OAO Susumanzoloto and OAO
Shkolnoe to establish ZAO Omchak ("Omchak"), a joint venture - in the form of
closed joint stock company - in the city of Magadan in the far north east of the
The Russian participants in Omchak have agreed to contribute controlling stakes
in two operating gold mining companies in the Magadan region - ZAO Nelkobazoloto
and OAO Berelekh for their 50 per cent interest in Omchak. Nelkobazoloto is part
of the gold mining company Shkolnoe, and Berelekh is part of the Susumanzoloto
mining group which is owned and operated by Mr. Vladimir Khristov, a well known
gold miner in the Magadan Region. The Russian participants have guaranteed a
minimum dividend flow to the joint venture for the next 5 years of US$ 7.2
PHM has agreed to contribute US$7.2 million in cash for its 50 per cent.
interest and has received an independent valuation from Micon and NBL Gold.
Peter Hambro, Dr. Pavel Maslovsky and Mr Sergei Ermolenko will join the board of
Omchak as representatives of PHM and Mr Khristov and two others will represent
the Susumanzoloto interests. Mr Khristov will act as Chairman of the Board.
As previously announced, one of the principal purposes for creating the joint
venture is to enter a bid to purchase the Russian Government's 38% stake in the
Matrosov Mine in the Magadan region, which is expected to be put up for auction
in the early autumn of 2003. The main asset of the Matrosov Mine is a licence
for the Natalkinskoye hard rock deposit.
Acquisition of 100% of Kolyma Bank
In addition, and as part of PHM's increased involvement in Magadan and Chukhotka
Regions, PHM's 97.7% subsidiary, JSC Pokrovskiy Rudnik, has acquired 100% of
Kolyma Bank in Magadan for approximately US$ 3.7 million. Kolyma Bank has 6
branches in Magadan and 3 in Chukhotka and specialises in supplying finance to
the gold mining industry in these areas. Profits of Kolyma Bank for 2002
amounted to US$ 400,000. The vendors have warranted quality of the bank's loan
book for a period of 1 year and will deposit the acquisition consideration at
the bank for this period in support of the warranty.
Mr. Khristov will act as Chairman of the Kolyma Bank and day to day management
will be overseen by ExpoBank, Moscow, which in a separate agreement has agreed
to acquire Kolyma Bank from Pokrovskiy Rudnik within 12 months at the same
Peter Hambro, the Chairman of Peter Hambro Mining plc, commented:
"This is Peter Hambro Mining's first major step in gold mining outside our home
base in the Amur Region and the potential to develop these assets is promising.
If we were to be successful in the Matrosov Mine auction this would expand our
operations even further.
The strategic alliance with Mr Khristov and the Susumanzoloto gold mining group
is also an important step for us. In addition, Kolyma Bank's gold lending
activities are expected to generate a number of expansion leads for the group.
Alya Samokhvalova Peter Hambro Mining PLC
+44 20 7393 0102
David Simonson / Nicola Davidson Merlin Financial
+44 20 7606 1244/+44 7711 709170
Peter Hambro Mining plc - General background information
Peter Hambro Mining is a London-based mining company, whose principal assets are
97.7% of JSC Pokrovskiy Rudnik ("JSCP") and 100% of the Tokur Deposit. JSCP
operates 2 gold deposits in the Amur Region of Russia. Its principal deposit is
the Pokrovskiy mine, which is expected to produce c.120,000 ounces in 2003 and
has been operating since 1999 reporting cash costs of US$136 per ounce in 2002.
Pokrovskiy has reported reserves and resources of 2.9 million ounces. JSCP's
other gold deposit is located some 35km from Pokrovskiy and is called Pioneer.
Pioneer is at an advanced stage of exploration and recently reported reserves
and resources of 9.4 million ounces - including a high grade zone of 635,000
ounces at 14 grammes per tonne.
Peter Hambro Mining recently announced the acquisition of the Tokur Deposit.
Tokur is located in the Amur Region some 450km from the Pokrovskiy mine and is
served by road and rail connections. Independent resource estimates for the
deposit indicate reserves and resources 8.1 million ounces. Completion of the
Tokur acquisition took the Group's estimated total reserves and resources for
the Group to approximately 19 million ounces.
Additionally Peter Hambro Mining PLC recently announced the launch of a
sponsored ADR programme with The Bank of New York.
This information is provided by RNS
The company news service from the London Stock Exchange