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Peter Hambro Mining (POG)

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Monday 24 April, 2006

Peter Hambro Mining

Final Results

Peter Hambro Mining PLC
24 April 2006



                        Preliminary results for the year
                             ended 31 December 2005


Peter Hambro Mining PLC ("PHM" or the "Group") announces its preliminary results
for the year ended 31 December 2005.

Financial Highlights:

US$ '000                                       2005           2004      change
--------------------------                 ----------      ---------   --------
Turnover (inc. share of Joint Ventures)     114,579         85,502         +34%
Operating Profit                             17,490         22,703         -23%
Retained Profit for the Year                 13,255         15,318         -13%
Earnings per ordinary share (US$)              0.17           0.22         -23%
Shareholders' Funds                         239,925        200,134         +20%
Net Cash pre leasing / sale & lease back       10.4           21.7         -52%

Operating Highlights                           2005           2004      change
--------------------------                 ----------      ---------   --------
Attributable Gold Production               249,000 oz     209,000 oz       +19%
GIS Cash Operating Costs (US$/oz)             125.4          106.9         +17%
GIS Total Cash Costs (US$/oz)                 158.7          134.7         +18%

Chairman's Statement: -

"The Group has had another excellent year with production growth and increases
in the quality and quantity of the Group's reserve and resource base. As
indicated in our trading update in March 2006, inflationary pressures on our
input costs and accounting items have resulted in somewhat lower earnings per
share than we had hoped for.

"Total attributable gold production increased by nearly a fifth and was
fractionally ahead of forecast. Pokrovskiy production increased by 21% and
contributions from new assets now make up 6% of the total. The average price
received for gold was US$442 / oz during 2005, a 10% increase on that achieved
in 2004. The market price today is more than US$620 /oz.

"The Group's development and exploration activities were concentrated on
providing the understanding of the gold-in-the-ground necessary to meet our "one
million ounce per year" production target for 2009. This includes exploration
work to reclassify appropriate 'less-certain' P category resources into
'better-defined' C category reserves.

"Of particular note is the success of the process engineers with the resource at
Pokrovka 2, hitherto considered as a less than 1.0 grams per tone low-grade
resource, where the proposed addition of a simple pre-washing technique would
increase the grade delivered to the mill to c. 8.0 grams per tonne. At Pioneer
the geologists are developing a new structural interpretation of the deposit and
this was recently confirmed by the finding of another high-grade zone - similar
to Apophysis 1 - with average grades of over c. 222.0 grams per tonne over c.
8.5 metres. At Malomir the previous estimates have been confirmed and enlarged
by exploration and a new ore zone recently identified on the far side of the
valley.

"In addition to this, the exploration work on Novogodnee Monto and other deposits
in our licence area in the Yamal region has progressed well and it is gratifying
to note that SRK, in its report to the Board, shares our enthusiasm for the new
Yamal licence areas when it says that the two licences will in due course
confirm the existence of ore grade mineralization containing in excess of 5
million ounces of gold.

"2005 saw the start of an expansion programme aimed at achieving the "one million
ounce per annum" gold production target set for 2009. This programme required
new investment in training and manning for the development of Malomir, as well
as at Pioneer and Pokrovskiy flanks. Repairs and refurbishment of equipment
generally destined for the new projects was also a major expense item. Some of
these expenditures, largely because they were not specifically identifiable for
a particular project, have been charged as operating expenditure this year
contributing to a short-term down-turn on earnings per share. The combination of
these two elements meant that the Group's earnings at US$13.3 million (2004
US$15.3 million) were somewhat lower than we had anticipated.

"Whilst industry-wide external affects on operating costs, such as wage
inflation, fuel, energy and plant consumables cost increases are resulting in
inflationary pressures, I am pleased that the Pokrovskiy mining operation, over
which we have direct control, is nevertheless still reported to be Russia's
lowest cost major gold mine. Cost control and asset optimisation remain key
priorities. These negative effects are, at present, balanced by the improvement
in the Rouble price of gold and by economies of scale.

"The successful placement and issue of the US$140m convertible bonds has
increased confidence in the Group's ability to realise its 2009 production
target by providing the necessary finance for construction and development. The
issue of the bonds also allows the Group to be less reliant on obtaining project
finance in order to fund its developments.

"With a forecast production of 250,000 ounces in 2006 we are now approximately a
quarter of the way towards delivering our million ounce target in 2009 and our
estimates of the economics of this plan, which were discussed in the Group's
Analysts' Workshop in January 2006, remain substantially unchanged.

"In spite of the cost pressures - and particularly with worldwide gold prices
remaining strong - I believe that we can look forward to a successful future."


Enquiries:
Alya Samokhvalova or Marianna Adams                      +44 (0) 207 201 8900
Peter Hambro Mining                                       www.peterhambro.com

David Simonson or Tom Randell                            +44 (0) 207 653 6620
Merlin


Consolidated Profit and Loss Account for the year ended 31 December 2005
(expressed in US $'000s)

                                                              2005        2004
                                                             $'000       $'000

Turnover: Group and share of joint ventures                114,579      85,502
Less: share of joint ventures' turnover                    (23,330)    (23,394)
Group turnover                                              91,249      62,108
Net operating expenses                                     (73,759)    (39,405)

Operating profit                                            17,490      22,703

Profit on disposals of interest in businesses                3,822           -
Loss on disposals of interest in joint venture                (413)          -

Share of operating profit in joint ventures                  2,324       4,829
Amortisation of goodwill in joint ventures                  (1,046)       (954)

Profit on ordinary activities before 
interest and other income                                   22,177      26,578

Interest payable and similar charges                        (5,953)     (3,661)

Other income                                                 3,807       1,387

Profit on ordinary activities before taxation
Group                                                       19,194      20,916
Joint ventures                                                 837       3,388
                                                            20,031      24,304


Taxation on profit on ordinary activities                   (6,032)     (8,253)

Profit on ordinary activities after taxation
Group                                                       13,985      13,801
Joint ventures                                                  14       2,250
                                                            13,999      16,051

Minority interests
Group                                                         (527)       (326)
Joint ventures                                                (217)       (407)

Profit retained for the year                                13,255      15,318

Earnings per ordinary share                                  $0.17       $0.22
Diluted earnings per ordinary share                          $0.17       $0.21

 
Consolidated Balance Sheet for the year ended 31 December 2005
(expressed in US $'000s)

                                                              2005        2004
                                                             $'000       $'000
Fixed assets
Intangible assets
Goodwill                                                      (176)     (2,776)
Other intangible assets                                    102,231      80,653
Capitalised exploration and development 
           expenditure                                      30,555      10,251
Tangible assets
Property, plant and equipment                               74,959      60,579

Investments                                                    448       1,399
Investments in joint ventures:
           Goodwill                                          1,467       2,821
Share of gross assets                                       17,313      21,366
Share of gross liabilities                                  (8,171)    (10,188)
Loans                                                            -       3,400

                                                           218,626     167,505
Current assets
Stock and work in progress                                  23,521      17,294
Debtors                                                     31,273      17,784
Cash at bank and in hand                                   144,534      25,854

                                                           199,328      60,932

Creditors, amounts falling due within one year             (18,909)    (15,607)

Net current assets                                         180,419      45,325

Total assets less current liabilities                      399,045     212,830

Creditors, amounts falling due after one year

Due to former shareholders of subsidiary                         -      (3,486)
Long-term borrowings                                        (2,250)     (4,655)
Finance lease liabilities falling due after one year             -        (243)
Guaranteed Convertible Bonds 2010, 7.125%                 (133,920)          -

                                                          (136,170)     (8,384)

Provisions                                                 (18,426)     (2,182)

Net assets                                                 244,449     202,264

Capital and reserves
Equity shareholders' funds                                 239,925     200,134

Minority interests                                           4,524       2,130

                                                           244,449     202,264


Consolidated Statement of Cash Flow for the year ended 31 December 2005
(expressed in US $'000s)

                                                              2005        2004
                                                             $'000       $'000

Net cash inflow from operating activities                   15,719      20,532
Returns on investments and servicing of finance
Interest received                                            1,971         892
Interest paid                                               (1,292)     (2,965)
Interest element of finance leases                             (81)     (1,111)
Dividends paid to minority shareholders                     (4,901)       (113)

Net cash outflow from returns on  
investments and servicing of finance                        (4,303)     (3,297)

Taxation paid                                               (3,401)     (4,223)
 
Capital expenditure and financial investment
Purchase of tangible assets                                (20,919)    (20,393)
Expenditure on research/development 
and mineral properties                                     (19,610)     (9,181)
Sales of other investments                                     (17)          2
Proceeds on disposal of tangible assets                         86          25
Loan granted                                                (4,011)     (4,523)
Loan repayments                                             18,055       2,149

Net cash outflow on capital expenditure 
and financial investment                                   (26,416)    (31,921)

Acquisitions and disposals
Purchase of subsidiary undertakings                        (12,057)    (11,785)
Cash acquired with subsidiaries                                814         103
Proceeds from sales of subsidiary undertakings                   -       2,112
Investments in joint ventures                                    -      (3,817)

Net cash outflow on acquisitions and disposals             (11,243)    (13,387)

Cash outflow before financing                              (29,644)    (32,296)

Management of liquid resources and financing
Capital element of finance leases                             (652)     (6,114)
Receipts from borrowings                                   162,673      56,376
Repayments of amounts borrowed                             (35,034)    (76,124)
Net receipts from issuing shares                            21,337      69,185


Net cash inflow from financing activities                  148,324      43,323

Increase in cash at bank and in hand                       118,680      11,027



2005 Operating Highlights

   • Group attributable gold production increased by 19% to c.249,000 ounces
   • Pokrovskiy gold production increased by 20.7%
   • Significant attributable production received for the first time from Amur 
     region affiliates and subsidiaries strengthening the Group's regional position
   • Completion of assay laboratory construction giving what we believe to be the largest 
     private laboratory capacity in Russia
   • Processing of ore at Pioneer proves effectiveness of choice of ore extraction technology

Production

Pokrovskiy & Pioneer

Pokrovskiy Deposit

2005 was a successful year at Pokrovskiy. As envisaged, the Pokrovskiy team has achieved 
the positive results shown in all the production figures. Foremost amongst the achievements 
has been the increase in gold production by 21% versus 2004.

The following points highlight the success in 2005:

   • Advanced stripping carried out in 2004 and 2005, together with optimised
     planning and mining using the MicroMine geological computer software has
     contributed to the processing of higher quality ore;
   • Renewal of mining and transportation equipment provided stability and allowed 
     successful completion of project planning and implementation. During the first 
     half of 2005, 5 Belaz dump trucks with a 45 tonne capacity and 2 CAT D6R bulldozers 
     were acquired, in addition to mining equipment purchased in 2004;
   • The work carried out in 2004 to expand the plant led to stable operation of all units, 
     which provided for an increase in production and productivity. 2005 Resin in Pulp 
     ("RIP") ore processing in 2005 amounted to 1.4 million tonnes of ore (compared 
     with 1.17 million tonnes in 2004). All indicators showed plant work for 2005
     corresponding to projected figures and capacity levels;
   • During 2005 the RIP's desorption processing unit was improved in order to achieve 
     a more complete extraction of silver. As a result, the extraction of silver doubled 
     in the fourth quarter and is scheduled to continue at this improved rate;
   • The process of double stacking the heap-leach was tested in 2004 and in 2005 
     showed good gold extraction results. Ore processed by the heap-leach in 2004 
     showed a 60% recovery rate but was subsequently left on the pad where in 2005 a
     further 15% recovery from this ore was achieved. Due to the Group's calendar 
     reporting period, recovery is shown at 60% in 2004 but this extra recovery at 
     15% reduces the 2005 recovery when in reality the number would be in excess of
     60% for the continuous period; and
   • The enhancement in heap-leach technology has preserved production costs at 
     last year's level despite gold grades in the heap-leach ore being 17% lower 
     than in 2004 (1.8g/t - 2004 vs. 1.5g/t - 2005). The enhanced technology allows 
     economic treatment of grades lower than originally anticipated which will 
     consequently allow an increase in the reserve base of the deposit.

PHM Schedule
                                           Units         2005       2004
            Pokrovskiy deposit
               Total material moved       '000 m3       5,248      4,540
                   Including advanced      
                   stripping              '000 m3       1,180      1,028
               Ore mined                '000 tonnes     1,393      1,045
                   Grade                    g/t           3.6        3.4
                   Gold                   '000 oz       159.8      113.7
               Including rich ore       '000 tonnes     899.0        608
                   Grade                    g/t           4.7        4.5
                   Gold                   '000 oz       135.7       88.5
            Pioneer deposit
               Total material moved       '000 m3         836        228
               Ore mined                '000 tonnes       133         43
                   Grade                    g/t           3.5        7.6
                   Gold                   '000 oz        15.0       10.4

PHM Processing Schedule
                                           Units         2005       2004
            Resin In Pulp plant

               Ore from Pokrovskiy pit  '000 tonnes       899        673
                   Grade                    g/t           4.7        4.2
                   Gold                   '000 oz         136       90.6

               Ore from stockpiles     '000 tonnes        444        454
                   Grade                    g/t           2.8        3.1
                   Gold                   '000 oz        39.4       45.5

            Pioneer (bulk sample)      '000 tonnes         53         38
                   Grade                    g/t           5.7        8.4
                   Gold                   '000 oz         9.7       10.1

            Total milled               '000 tonnes      1,397      1,165
                   Grade                    g/t           4.1        3.9
                   Gold                   '000 oz       184.9      146.2
                   Recovery                  %           91.5       90.7
                   Gold recovered         '000 oz       169.2      132.7

            Heap leach

               Ore stacked             '000 tonnes        714        620
                   Grade                    g/t           1.5        1.8
                   Gold                   '000 oz          38       35.3
                   Recovery                  %           48.9       60.0
                   Gold recovered         '000 oz        16.5       21.3

            TOTAL
               Total gold recovered       '000 oz       185.7      153.9


Pokrovskiy Rudnik - Operating Cost Analysis
                                              2005     2004   Variance  1H 2005
            Gold Institute Standard
            Direct Mining & 
            Processing Expenses               95.0     73.0      30.1%    97.8
            Refinery & Transportation cost     4.5      6.1                4.3
            By-product credits                (0.9)    (0.2)              (0.3)
            Other                             26.8     28.0                 47
            Cash Operating Cost              125.4    106.9      17.3%   148.8

            Royalties                         27.1     22.7               25.2
            Production taxes                   6.2      5.1                7.1
            Total Cash cost                  158.7    134.7      17.8%   181.1

            Non-cash movement in stock        28.6     12.4               15.1
            Depreciation/Amortization         42.4     37.2               47.7
            Total Production Cost            229.7    184.3      24.6%   243.9

In 2005, material and input costs at Pokrovskiy mine experienced upwards pressure 
from external factors. For Pokrovskiy, fuel, energy and plant consumables prices
have increased by 36%, 26% and 30% respectively. The Group was actively implementing 
cost optimisation programmes and, as a result of tight internal cost control, the 
2005 Gold Institute Standard ("GIS") Cash Operating Cost for Pokrovskiy is 
c.US$125/oz. - a rise of only c.17% compared to 2004. The Cash Operating Cost is 
c.16% below our previously reported cash operating cost per ounce for the first 
six months of 2005.

Pioneer Deposit

Work at Pioneer focused on three areas: developing reserves, stripping open pit 
areas and further processing of the technological sample.

Work commenced on the stripping operation to remove all surface material on the 
first major ore column at the junction of Apophysis 1 and the main orebody. Further
work has recently commenced on the second identified ore column. A total amount 
of 836,000m(3) of material was moved at Pioneer during 2005.

Further small scale processing of the Pioneer ore was undertaken at the Pokrovskiy 
mill to prove how amenable the ore is to economic gold extraction. During 2005,
53,156 tonnes of Pioneer ore were processed at the Pokrovskiy plant with an average 
gold content of 5.7g/t. This sample yielded a recovery rate of 90% proving the
effectiveness of the ore extraction technology used.

Omchak JV
                                                                 2005     2004

                        Nelkobazoloto - Shkolnoye Deposit
                        Ore mined                  tonnes '000   54.7     50.9
                        Ore processed              tonnes '000   54.2     65.0
                        Ounces produced            ounces '000   18.7     27.4


                        Berelekh
                        Waste rock stripped          m(3) '000  8,724    9,311
                        Sands processed              m(3) '000  3,957    3,764
                        Ounces produced            ounces '000   57.2     61.5


                        Noviye Tekhnologii and Zeyazoloto
                        Waste rock stripped          m(3) '000  381.2        -
                        Sands processed              m(3) '000  222.4        -
                        Ounces produced            ounces '000    3.1        -


                        Total gold production      ounces '000   79.0     88.9
                        PHM attributable (50%)     ounces '000   51.6     57.0


During 2005, CJSC Omchak ("Omchak") produced gold through its subsidiary companies 
in two Russian regions - the Magadan and the Amur regions. The total attributable 
production of gold was 51,600oz and was achieved by the exploitation of the Shkolnoye 
deposit (CJSC Nelkobazoloto, Magadan region) and a number of smaller deposits.

At Shkolnoye, 54,000 tonnes of ore were extracted from the underground mine and 
then processed at the onsite processing plant. The ore grade was found to be 10-15g/t.

During the exploration of the alluvial deposits, 4.0 million m3 of gold bearing 
sands were enriched using washing equipment. The average grade of gold was 0.5-0.65 g/m3.

At the Shkolnoye deposit more than 1,000m of underground work was executed, providing 
access to estimated resources of c.97,000oz of gold at the levels of 500m-700m which 
should provide for stable mining works and mill feed over the next few years. More 
than 1,000m of drill holes were drilled at alluvial deposits and 200,000m3 of trenching 
undertaken.

The joint venture also undertook a process of updating the mining and exploration 
fleet. For the Shkolnoye mine, a dump truck was acquired for the transportation
of ore from underground operations to the plant, as well as equipment for underground 
drilling and a load-hauler; the alluvial gold operations have ordered a Kamatsu D375
bulldozer and five Libcher loaders.

Omchak acquired various alluvial gold deposits in the Amur region in 2005. These 
deposits were selected as they were favourably priced and because they suit the
skill base of the Omchak team. The estimated reserves and resources of these deposits 
amount to more than c.64,300oz of alluvial gold. Drilling and mining works are
being carried out in order to increase production.

Omchak made two acquisitions in the Chita region during 2005. In accordance with 
the terms of the Verkhne-Alliinskiy deposit licence agreements, Omchak has collated 
and analysed the historical geological data, and has completed the preparation of an
exploration plan. In accordance with the licence, drilling is expected to commence 
in July 2006. Ahead of submission of exploration plans and preparation of reserves 
for State Geological Committee approval, core drilling of around 12,000m and trenching 
of 120,000m3 is required.

In 2005 Omchak suffered from a larger rise in input costs since it is partly an 
alluvial operator with c.40% of its costs being fuel and energy related. It also 
experienced significant foreign exchange translation losses. Omchak's GIS total 
cash costs have increased by c.17% to c.US$360/oz for 2005.

Amur North East

Tokur Deposit

OAO "ZDP Koboldo" - a 91.7% subsidiary of OOO "Tokurskiy Rudnik"- produced 4,180oz 
of gold in 2005. Koboldo produces gold from alluvial deposits in the North East of 
the Amur Region in close proximity to the Tokur and Malomir deposits. Koboldo was 
acquired by the Group in 2004 and benefits from a skilled local labour force and
developed infrastructure.

Rudnoye Joint Venture

OOO "Odolgo" - a 100% subsidiary of ZAO "Rudnoye" - produced 2,366oz (attributable 
1,160oz) of gold in 2005. Odolgo is active in the production of gold from alluvial
deposits within the licence areas of the Rudnoye joint venture.

Exploration & Development

The Group publishes this summary table and update on progress in Exploration & 
Development ahead of a fuller report which will be contained in the Annual Report &
Accounts.

The Board of Directors commissions a semi-annual independent review of the Exploration &
Development work of the Group and the Group's reserve and resource estimates. In 
light of the considerable progress made during the period, the executive summary 
of this report will be made available at www.peterhambro.com.

Peter Hambro Mining Group Reserves & Resources Summary
As at 1-1-06
               Category         Ore            Gold Content
                             '000 t           kg     oz'000  @ 1-1-05
     Reserves     C1*        30,729       61,578      1,980     2,098
                 C1+C2        1,269       11,332        364       445
                  C2        134,678      208,043      6,689     4,933
                 TOTAL      166,676      280,953      9,033     7,476

     Resources**  P1       150,584      301,479      9,693     8,442
                  P2       262,270      523,225     16,822    27,617
                 P2+P3      810,541    1,361,381     43,769    29,589
                  P3       648,000      714,000     22,956     4,903
                 TOTAL    1,871,395    2,900,085     93,240    70,551

     Reserves 
     & Resources TOTAL    2,038,071    3,181,038    102,273    78,027
* C1 includes a small area of B category reserve at the Tokur deposit.
** It should be remembered that of the P Category Resources, P1 is always supported 
   by drilling whereas this is not necessarily the case for P2 and P3.

"Million Ounce Target" Exploration & Development Update

PHM published updated business plans for the Pokrovskiy Flanks, Pioneer and Malomir 
deposits in January 2006. The findings of the reports supported the Group's target 
of a production rate of one million ounces of gold per annum in 2009 and provided 
more clarity as to the expected development and subsequent relevant contribution 
of each asset. Based on these plans the Group intends to further develop each of the 
primary assets and to invest the capital required to meet the production targets. 
Exploration highlights for 2005 at these four areas include:

Pokrovskiy Deposit & Flanks:
 -         9,000m of drilling was completed on the Pokrovskiy deposit. Emphasis 
           was placed on expansion of the open pit reserves at Pokrovka-1, and 
           exploration of the recently identified fanglomerate deposit in the
           Pokrovka-2 area.

-          Pokrovka-1 work has proved extensions of the ore bodies, both laterally 
           and at depth with potential for pit expansion to the east, with which 
           to exploit an ore bridge between the Glavnoye and Ozernoye ore bodies.

-          Drill hole evidence for a high-grade extension of the Glavnoye ore body, 
           at grades of 6g/t down to the 120m level (200m below surface).

 -         Trenches and drill holes along the Sergeevsky fault (NE of Pokrovka-1) 
           at locations indicated by the 3D geochemical model have identified 
           significant mineralisation, thus validating the geochemical modelling 
           method and identifying exploration targets.

-         There are significant new findings at Pokrovka-2 of an entirely different 
          type of deposit - effectively an ancient placer, rather than a hard-rock 
          deposit - termed a fanglomerate. This has been explored to identify a C2 
          reserve of c.220,000 ounces at 0.8 g/t to a depth of 60m, and a further 
          P1+P2 resource of 831,000 ounces. Although low-grade, it is easily enriched 
          by washing away the fine matrix, as most of the gold is contained within 
          coarse fragments (from sand up to boulder size) of the primary ore body. 
          Preliminary independent test-work shows c.10% of the material remains after 
          simple washing and this material holds c.70% of the gold, showing an average 
          grade of c.8g/t. The present reserve and resource estimates are based on
          exploration of only a very small portion of the total mapped outcrop area 
          (4km2) of the fanglomerate, so the total is expected to be larger, extending 
          from Pokrovka-2 south-westwards to the Nadvigovy area.

-         Exploration also continues in other areas. Notably drill holes and trenches 
          along the Sergeevsky fault (NE of Pokrovka-1) at locations indicated by the
          3D geochemical model have identified significant mineralisation. The data 
          received so far further validates the Group's geochemical modelling method 
          and has identified areas for more intensive exploration in 2006.

Pioneer Deposit:

-         Exploration in 2005 has proved a number of additional ore columns similar 
          to Apophysis 1 and the ore column at the NE end of Promezhutochnaya zone.

-         On the three main ore zones (Bakhmut, Promezhutochnaya, and Yuzhnaya) 
          2005 exploration drilling and trenching, and completion of all outstanding 
          assays, has allowed the conversion of most of the P1+P2 resources to C2 
          reserves. C2 reserves are more than doubled and none remain in the P2 
          category. There is a decline in estimated grade and contained gold, but 
          this is more than compensated for by additional resources now discovered 
          elsewhere in the Pioneer licence area. It is also expected that additional 
          ore columns along the main ore zones will provide increased reserves.

-         In Yuzhnaya zone, apart from the previously postulated (and now proved) 
          ore column at the northern end (explored intensively in 2004-5) there is now
          evidence for a second ore column 800m to the south. It has been intersected 
          in two trenches and 10 drill holes.

-         With commissioning of the new laboratory facilities, the assay backlog 
          has now been cleared and positive results obtained for a number of the 
          Pioneer satellite zones. In two of these in particular, significant gold 
          mineralisation has been found: in Zapadnaya zone, three trenches and one 
          drill hole have intersected up to 3m thickness at 10g/t.

-         A new structural interpretation for Pioneer has been developed, recognising 
          the coincidence of the several discovered ore columns with the intersection 
          of regularly spaced fracture systems. This conceptual model can now be 
          used, in combination with other methods including the 3D geochemical 
          modelling, for identification of further exploration targets. One of the 
          most promising of these, to be explored in 2006, is Andreevskaya to the 
          south-east of the main Pioneer deposits. A drill-hole at a point predicted 
          by the new structural model, in an analogous position to Apophysis 1, 
          has intersected a zone with very high grades averaging 222.7 g/t over 
          a downhole interval of 8.5 metres, with two samples assaying over 1,000 g/t.

Malomir Deposit:

-         Exploration trenching (197,000m3) and drilling (2,632m) during 2005 
          concentrated on confirmation and extension of reserves on the Diagonal 
          zone. Further to this the Group's Tokur laboratory is now entirely
          committed to assaying Malomir samples.

-         A central area 480m along strike has been re-evaluated. Previous estimates 
          are confirmed and both grade and tonnage are higher than anticipated, 
          with a 20% increase in contained gold in one 480m-long section of the 
          Diagonal zone.

-         A significant new finding is that near the NE end of the Diagonal zone, 
          at the junction with several overlying branch thrusts, there is a thick 
          high-grade ore column not previously recognised, with trench sample assays 
          indicating 15g/t over 4 m thickness, and a total ore thickness of 93 m 
          at 1.8g/t.

-         Core drilling continues in 2006 with 4 rigs operating, and trenching is 
          to be extended westwards along the Diagonal zone.

 -        Studies are to be conducted in 2006 to identify markers for the primary 
          zone, a possible semi-oxidised zone, and oxidised zone, and metallurgical
          testing will be carried out on a bulk sample to be collected from each 
          ore type - provisionally one primary ore sample from below 100m depth, 
          and one oxide-zone sample from above 100m. Completion of this testing,
          together with parallel hydrogeological, engineering, geological, topographic 
          surveys, and environmental studies, are also to be conducted in 2006, 
          which will allow the appropriate P1 resources to be converted to C2 reserves, 
          and subsequent preparation of mine planning documents for formal approval.

-         Tailings from abandoned placer operations in the Malomir valley will also 
          be tested for easily extractable gold.

-         A new zone, named the Quartzite Zone, has been identified across the 
          river valley from the Diagonal Zone. Trenching and drilling is planned 
          on 5 of the metasomatised granitoid masses which constitute the Quartzite 
          zone. Previous data from one of these established a large low-grade resource 
          and metallurgical tests demonstrated the feasibility of cyanide leaching,
          with 80% recovery from 10mm crushed material. Although the other bodies 
          have not yet been systematically sampled, all available assays show grades 
          of at least 0.3 g/t, with low sulphide content. The Quartzite zone is 
          believed to have large potential gold resources and this area is becoming 
          an important exploration target.

PHM has made further progress at a number of other assets within the portfolio, 
each of which will be reported on in full within the Annual Report & Accounts.
Of these, the most material progress has been made at the Yamal assets:

Novogodnee Monto & Petropavlovskoye deposits and surrounding areas

-         Drilling in 2005 on the Novogodnee Monto and Petropavlovskoye deposits 
          included 41,000m deep drill holes to complete the evaluation of the 
          Novogodnee deposit and to delineate the central portion of the Petropavlovskoye 
          deposit, plus 13,700m3 of trenching within the licence area.

-         Work is currently being completed on approvals for mining the main deposit 
         (massive magnetite skarn with layers of gold-bearing sulphides) as a 
          polymetallic operation for gold, iron, and cobalt. Current gold reserves 
          and resources are 340,000 ounces (C1+C2) and 300,000 ounces (P1).

-         Unlike Novogodnee Monto, Petropavlovskoye is a gold-bearing quartz 
          stockwork deposit 50-120m thick, with a central quartz 'leader' vein 1-4m 
          thick with grades from 6-70 g/t, now found to be continuous along strike 
          of 500m and to a depth of at least 200m in eight drillhole intersections. 
          Beyond the 550m zone explored in detail, mineralisation has been established 
          to continue for a further 1,500m northwards (with the central quartz vein 
          intersected in three drill holes here too), and southwards for a further 
          850m. P1 category estimates for the central zone of 800,000 ounces contained 
          gold and for the extensions of 320,000 ounces each, totalling 1,450,000 
          ounces contained gold (C2+P1 category) for the entire Petropavlovskoye 
          deposit.

-         PHM has commissioned SRK Consulting (UK) Ltd to report on the overall 
          licence area and specifically on Novogodnee Monto. The report supports 
          the Group's estimated total reserves and resources and the relevant paragraph 
          reads as follows:

            "Overall SRK considers that the two licences combined represent a valuable 
             addition to the PHM portfolio and that it is reasonable to expect that 
             the feasibility study at Novogodnee Manteau, combined with ongoing
             exploration of the Toupugol-Khanmeishorkaya, will in due course confirm 
             the existence of ore grade mineralization containing in excess of 
             5 million ounces of gold."

-         It is intended that the final SRK report (or an executive summary thereof) 
          will be available on the PHM website shortly.

Yamalskaya Gornaya Kompaniya (YGK)

-         YGK, acquired during 2005, holds a series of exploration licences in the 
          Yamal region in a line to both north and south of Novogodnee Monto, parallel 
          with the river Ob. This is a range of assets in a variety of different 
          geological settings, with potential for large base-metal and polymetallic 
          resources, as well as significant precious-metal (Au, PGM) potential 
          to be explored.


2006 Production Forecast & Outlook

PHM's budget for 2006 shows estimated attributable production of 250,000 ounces. 
This is a marginal increase on 2005 and is made up of 184,800oz from Pokrovskiy, 
41,300oz from the Omchak JV and the remaining ounces from the Group's interest in 
other Amur region assets.

Historically Pokrovskiy's operating costs have been relatively flat as the 
inflationary pressure on input costs were outweighed by the increasing economies 
of scale and cost optimisation programmes initiated at Pokrovskiy. During 2006 
production levels are not forecast to increase markedly and consequently operating
costs may well see upward pressure.

PHM granted Queens Award for Enterprise

The Board of Directors of the Group is delighted to announce that PHM has been 
granted the Queen's Award for Enterprise for the years 2006 to 2009 due to the
company's outstanding success in international trade. It is one of the UK's most 
prestigious awards acknowledging business achievement.

Annual Report & Accounts

The Group intends to publish and distribute the Company's Annual Report and Accounts 
for the year ended 31 December 2005 on 16th May 2006.

This report will contain a more detailed analysis of the work undertaken by the Group 
during the period, notes to the accounts and a breakdown, by deposit, of the Group's
Reserves and Resources and production.

Conference Call

There will be a conference call on 24th of April 2006 at 2.00 pm (London time) and 
the dial in numbers are as follows:

UK Dial in:                   0845 245 3471
International:         +44 (0) 1452 542 300

To replay the call after the event please dial.

UK Dial in:                   0845 245 5205
International:         +44 (0) 1452 550 000
Replay Access:                     8192609#




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