Information  X 
Enter a valid email address

Peter Hambro Mining (POG)

  Print      Mail a friend       Annual reports

Tuesday 23 March, 2004

Peter Hambro Mining

Rio Tinto Joint Venture

Peter Hambro Mining PLC
23 March 2004


23rd March 2004

                    Acquisition of Chagoyansk Gold Property

                                       &

                       Rio Tinto Joint Venture Agreement


Chagoyansk Property


The Peter Hambro Mining Group announces that it has been successful in the
auction of the combined exploration and mining licence over the Chagoyansk gold
property in the Amur Region, Far East Russia, held in Blagoveshensk on 18th
March 2004.  The Amur Region is also the home to Peter Hambro Mining's
Pokrovskiy Rudnik gold mining operation and the Group's Pioneer and Tokur
development projects.


Nicolai Vlasov, the Group Chief Geologist of Peter Hambro Mining, believes that
the geological environment of Chagoyansk is similar to the 'Carlin Trend' group
of deposits in Nevada, USA.  A small polymetallic ore occurrence, associated
with silicification at the tectonic contact of Cambrian limestone and Silurian
sandstone was the primary reason behind the licence application.  Along this
contact there is a weathering crust in which shallow drilling undertaken during
the 1980's encountered in one sample a gold grade of 124 grammes per tonne over
a thickness of 4 metres.


Nicolai Vlasov believes that Chagoyansk has the geological potential to host a
major gold deposit.  Previous exploration activities at the Chagoyansk property
have focused almost exclusively on its base metal and alluvial gold potential.
It is believed that hard-rock source deposits for the alluvial gold may be
situated within the Chagoyansk area.


Rio Tinto Joint Venture Agreement


Peter Hambro Mining also announces that it has signed a Heads of Agreement
covering a joint venture agreement in respect of Chagoyansk with Rio Tinto, one
of the world's largest mining companies.  In 2002 Peter Hambro Mining and Rio
Tinto entered into a non-exclusive Confidentiality Agreement that gave Rio Tinto
access to Peter Hambro Mining's exploration and production assets. The Peter
Hambro Mining Group has long been aware of the existence of the Chagoyansk
property and initiated the auction process, following Rio Tinto's review of the
area.


Representatives of Peter Hambro Mining and Rio Tinto met at the Russian Economic
Forum in 2002 and have subsequently worked together to find a project that would
suit their individual requirements.


The terms of the joint venture, which have been under discussion for some time,
have already been agreed in principle between Peter Hambro Mining and Rio
Tinto.  These cover the exploration and, thereafter, possible development of the
Chagoyansk gold property.


Summary of the terms of the proposed joint-venture


It is envisaged that, if the necessary licence is issued and the joint venture
progresses as proposed, Rio Tinto will finance the first US$1.5 million of
exploration works which will entitle it to obtain a 51% stake in the proposed
joint venture entity.  Thereafter, it is intended that Peter Hambro Mining and
Rio Tinto will either share project costs on a pro-rata basis, or Peter Hambro
Mining can elect not to contribute to further exploration costs in which case
Rio Tinto will finance the next US$3.5 million of exploration expenditure,
subject to encouraging results, to increase its interest in the joint venture
entity to 65%.  In addition, it is intended that Peter Hambro Mining will
receive a staged success fee from Rio Tinto totalling US$3.5 million in the
event that a mine is constructed.


Peter Hambro, Executive Chairman, said:


"I look forward to collaborating with Rio Tinto on Chagoyansk.  I have always
believed that the Group's local management team is the Group's greatest asset
and it is gratifying that one of the world's major mining companies also seems
to have recognised this.  With the development of our Pioneer, Tokur,
Voroshilovskoye and Malomir projects we felt that some additional resources
would be helpful and, although we think that Chagoyansk may turn out to be
another big deposit, we realise that we cannot own the whole of the Russian gold
mining industry.


"Obviously I am very pleased that we have become Rio Tinto's first partner in
Russia in recent times.  We have been very impressed with the thorough way in
which Rio Tinto has approached our joint efforts and look forward to a long-term
collaboration between our team and theirs at Chagoyansk.  The joint venture
entity will benefit from Peter Hambro Mining's expertise in the Amur Region and
its highly experienced team at Pokrovskiy, as well as from Rio Tinto's financial
resources and exploration skills."


Enquiries:

Alya Samokhvalova                                   +44 (0) 20 7201 8900
Investor Relations, Peter Hambro Mining

Tom Randell/ David Simonson                         +44 (0) 20 7653 6620
Merlin


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