http://www.kitco.com/charts/livegold.html

cheers GF.

Peter Hambro Mining - Holding(s) in Company
RNS Number:2554T
Peter Hambro Mining PLC
19 March 2007


19 March 2007

PETER HAMBRO MINING PLC

Holdings in Company



Peter Hambro Mining Plc (the 'Company') has today been notified that AEGON UK
Group of Companies now holds 2,637,304 Ordinary Shares in the Company. This
holding represents 3.25 per cent of the current total issued share capital of
the Company, being 81,155,052 Ordinary shares.

so have you put your pension cheque on the line?

Just bought in.

JPMorgan Cazenove said in yesterday's FT that after the current period of risky operations, the SP could double over two years.

Gold to Post Fresh Highs in 2007 and 2008?

By Jackie Steinitz
04 Apr 2007 at 06:43 PM GMT-04:00


LONDON (ResourceInvestor.com) -- The mood at the London launch of the GFMS Gold Survey 2007 report was bullish about the short and medium prospects for gold. Chairman Philip Klapwijk noted in his presentation that:



The annual average gold price this year is looking very likely to break the previous record set in 1980 of $614.50.
There is a good chance that the market in 2007 will exceed the 2006 high of $725.
The upward trend is likely to continue into 2008.
The principal driving factors behind the strength of the market were seen as sustained investment demand, lower official sector sales and ongoing dehedging by producers.




The Gold Survey is based on extensive research by GFMS, an independent precious metals research consultancy. In the course of preparing this years report the GFMS team have visited more than 300 companies/institutions in 39 countries and updated a database on 785 mines and projects. The report provides detailed estimates for the ten years to 2006 on the fundamentals of the gold market including supply, demand, stocks, investment, bullion trade and prices. It also looks at the outlook for 2007 and beyond.

Here are some of the highlights.

Mine Supply

Mine production fell 3% (79 tonnes) last year to a 10-year low of 2,471 tonnes, primarily as a result of the underinvestment in the sector during the 1990s.

Nonetheless there were significant production gains from some markets notably China (+8%) and Latin America (+7%), where new mines such as Veladero in Argentina (Barrick [NYSE:ABX; TSX:ABX]), Ampari in Brazil (Goldcorp [NYSE:GG; TSX:G]), Mulatos in Mexico (Alamos Gold [TSX:AGI]) and Choco 10 in Venezuela (Gold Fields [NYSE:GFI]) generated over 20 tonnes of new gold.

These gains, however, were not sufficient to offset falls from the traditional mining provinces of South Africa, the U.S., Canada and Australia. There were significant declines also from the worlds two largest mines; Yanacocha in Peru (Newmont [NYSE:NEM] and Buenaventura [NYSE:BVN]), and Grasberg in Indonesia (Freeport McRoRans [NYSE:FCX]).

Cost pressures continued to rise sharply around the world reflecting the rising costs of labour, energy, mining consumables and equipment. Average cash costs per ounce in 2006 were $317/ounce, up 17% or $45/ounce on 2005, more than double the price hike measured in the previous year. Total costs, including depreciation, rose 18% to $401/oz.

It was not all doom and gloom for the producers however as the gold price rose by $160/ounce (from $444/oz in 2005 to $604/oz in 2006) allowing for very healthy increases in producer margins; the average increase globally was 66%.

Supply from Above Ground Stocks

Mine production accounted for some 63% of total supply to the market last year. The remainder was sourced from stocks above the ground; from both official sector sales, which fell dramatically, and from the recycling of scrap which reached a new record.

GFMS estimate that net official sector sales fell 51%, down from 674 tonnes in 2005 to 328 tonnes in 2006, the lowest level since 1997. This was primarily because of significantly lower gross sales from the signatories of the Central Bank Gold Agreement (CBGA), who, for the first time in their 7 year history, sold under their annual maximum quota - by 100 tonnes. Interestingly the countries outside the agreement became modest net purchasers of gold probably as some countries have diversified away from dollars. Klapwijk suggested that the decline in CBGA sales and the increasing number of gross purchases elsewhere are indicative of a change in attitude towards gold as a reserve asset in the central banking community.

The level of scrap supplied to the market surged 25% to a record 1,100 tonnes. Virtually all the increase occurred in the first half of 2006 when prices rose rapidly. This precipitated a shake-out of tired jewellery trade stocks, some of which had been held in stock for several years. Scrap increased from all countries except India, though the majority of the gains occurred in countries which are traditionally price sensitive, particularly the Middle East (though the big increase in Saudi Arabia may also have been connected with the stock market slump at the time).
In total GFMS estimated that supply to the market in 2006 fell by 5% (or 205 tonnes) to just over 3,900 tonnes. Above ground stocks at the end of 2006 totalled 158,000 tonnes, equivalent to over 40 years production at current levels.

Demand

There were big changes - some up, some down - in each of the components of demand in 2006.

Jewellery offtake in 2006 fell to 2,280 tonnes, a fall of 16% or 428 tonnes. The problem stemmed not from income or GDP growth both of which were robust, but from the high gold price and price volatility, as evidenced by the fact that the fall was all concentrated in the first half of the year. Jewellery now just accounts for 68% of total gold demand, a level which was typical in the early 1980s but which is way down from the 75%-80% seen in the early years of this decade. Offtake is now 30% below the peak in 2000 in volume terms. However it should be noted that although volumes are down consumers are spending more on gold in jewellery in value than they did last year. Klapwijk commented that he was sanguine about the underlying health of the gold jewellery business and saw the recent declines merely as a reaction to price.
By contrast demand for other fabrication rose 11% principally because of growth in the use of gold in electronics (helped by strong consumer demand for these products) and higher coin minting (particularly the U.S. Buffalo coin).

Producer dehedging provided significant support for the gold price in 2006 generating a net 373 tonnes of demand (based on gross dehedging of 438 tonnes but 65 tonnes of new hedging). This was a four-fold increase on 2005 and, according to GFMS, it suggests that producers are reaffirming their belief that the rally in the gold price still has some way to go. Total outstanding sales, loans and the delta hedge against options are now down to 1,364 tonnes, a level last seem in 1994. Klapwijk commented that it seems clear that producers no longer have any desire to add to their positions unless they have to in order to meet financing requirements.
Investment

GFMS estimate of investment comprises three components; bar hoarding (which fell 14%), official coin fabrication (up 16%) and the catch-all residual between supply and demand which GFMS refer to as implied net investment, which cannot be independently measured but which in theory should reflect the net impact of all investor activity which is not already measured.

Key points from their estimates are:

Total investment worldwide in gold fell 13% by weight in 2006 to 743 tonnes. However in value it rose by 18% to about $14.4 billion.

Although at first sight the decline in volume might suggest that investor interest weakened last year there is strong evidence that investment interest in gold actually rose markedly in 2006. However there was a shift from primarily buy-side interest in 2005 to a healthier buy- and sell-side last year. The bulk of the selling was profit taking or stop loss selling in the wake of the May price spike.

Although implied net investment fell 19% to 388 tonnes last year there were increases in some components. In particular ETFs made a big contribution, with holdings by the nine products measured by GFMS increasing by 260 tonnes during the year. OTC activity was also strong. Fund involvement in Comex and CBOT futures declined during 2006, but is rising again in 2007.
Gold investment continued to be dominated by institutions and high net worth individuals. There is little retail activity.
Outlook

On the supply side GFMS are anticipating that supply in 2007 will fall again, though at a lower rate than the 5% fall seen in 2006. At best it will be flat. Specifically:

Mine production will rise this year by perhaps 1-2%. GFMS commented that new mines, ramp-ups and less of a swing at some of the worlds larger operations that dampened the impact of new production in 2006 should support forecast production level to above 2,500 tonnes.

Official sector sales are likely to remain at lower levels than previous years with CBGA countries likely to undershoot their quota again while the rest of the world will remain small net purchasers.

Scrap is likely to be significantly less as much of the loose jewellery has already been mobilised. It will need higher prices, perhaps above $700/oz to flush out further significant increases in scrap.
The demand picture is more complex. Even though non-jewellery fabrication is likely to rise fabrication demand will probably fall in total, weighed down by further price-induced declines in jewellery manufacture. Nonetheless GFMS anticipate that the fall in jewellery demand will be less than in 2006 with demand stronger on the price dips as the price floor appears to have moved up from $580/oz to comfortably above $600 - perhaps even $620-640/oz.

Meanwhile producer dehedging will be maintained at elevated levels. According to Klapwijk Were probably going to see a slightly lower level of support from de-hedging in 2007 but thats almost entirely due to exceptional corporate restructurings in early 2006. Theres no sign yet of producers losing their nerve over the price and starting to put in place significant strategic hedges.

Investment demand will remain the key however; a major theme of the presentation was the potential for gold to post fresh highs with the upside firmly in hand of investors.

Klapwijk identified a number of possible factors which will support the gold price over the next 18 months or so:

There is a growing investor appetite for safe haven assets due to worsening economic and political uncertainty. Arguably the outlook for the dollar remains poor, the U.S. economy remains highly leveraged to an increasingly problematic housing market and the outlook for traditional investment routes is questionable.
In contrast commodity prices could remain strong. It is possible to envisage a situation where the U.S. economy and the dollar are weakening but there is still strong offtake from developing countries such as China and India. This could prove the perfect storm for the gold price.

There is a threat of higher inflation.

Geopolitical tensions are mounting, especially as regards U.S. and Iran.

Investment in gold is still relatively low. One measure of institutional investment suggests that the combined non-commercial position in 13 commodities was still only $138 billion at the end of 2006 - a figure which is less than the market capitalisation of some blue-chip equities. There is considerable scope for the weight of money in gold to increase.

The level of net official sector sales will remain low. According to Klapwijk, We lost around 350 tonnes of supply from official selling last year and not only did that impact the market directly but the implied shift in the central bankers stance on gold was good for investor confidence.
Jewellery demand will provide a floor to the price with buying increasing on price dips.
Scrap supply will be less responsive to price and is unlikely to reach the levels of last year as much has already been mobilised.
Klapwijk also agreed during the Q&A session that the 2008 Olympics may have some effect on Chinese demand.

In summary Klapwijk argued that the price is likely to be supported by sustained investment demand, low official sector sales and continued producer dehedging and a further jump in investment demand could be triggered by geopolitical and global economic events which would drive growth in the second half of 2007. A new high in 2008 not improbable.

Longer term, however, he argued that prices are likely to retreat back towards the metals long term cost of production as the economic and political situations change and sentiment towards the dollar and other assets recovers.

In the meantime the environment is highly positive for the gold price.



Source: World Gold Council

That's what we liike to hear, GF.

Yep ................ NICE.

yes ... even if 2 weeks old! ...... anyway, everything looks right at the moment, which of course will inevitably lead to sp slumping next week!

Don't say that, Cynic - I shan't get a wink of sleep over the wkend.

truthfully, i think POG is a top stock in its field ..... everything points towards sp zipping upwards, though shocks have a nasty habit of appearing from nowhere

LOL - pessimistic even in your optimism - I love it!

Yep, well hopefully this is gonna zip at least a pound a share in the near future.

At least it's now over my purchase price of 1179 : POG Bid: 1180p Offer: 1181p Change: 19

Need 1198 to cover all my costs (including sale fee) - if the SP can't breach 12 there's something badly wrong . . .

JP Morgan (i think) has a target of 20.00 and i also other houses have targets significantly above current levels

Cynic, the JPM 20 makes sense, as it is JPM's broker Cazenove that is particularly bullish.

Other analysts' estimates, from FT.com:

Goldman Sachs starts coverage of Peter Hambro Mining with buy rating Feb 12 2007 09:22

Numis Securities ups Peter Hambro Mining price target to 1535p from 1350p, keeps buy rating Jan 22 2007 11:07

interesting RNS just out ...... interesting that the house broker is predicting lower end of expectations ..... is that to dampen down (over)enthusiam or realism/knowledge? ..... i very much hope the former!


LONDON (Thomson Financial) - Peter Hambro Mining PLC is expected Monday to post a jump in full-year results on higher production and gold prices, while the market's focus is likely to be on operating costs and the group's 2007 output guidance.

According to a consensus of analysts, net profit is anticipated to rise to about 43 mln usd from the 14 mln posted in 2005. However, expectations range from 26 mln usd to around 60 mln, with house broker Cazenove at the lower end of the range, dealers said.

The company, a London-listed gold mining company with assets in Russia, previously announced its attributable production for 2006 was 261,000 ounces, up from 249,000 ounces in 2005.

In February, the company reiterated its 1.18 mln ounce a year production target for 2009 and said the Pioneer deposit in the Amur Region is on track for production start-up in the fourth quarter of 2007.

The company benefited from higher gold prices over the year. Its average realised gold price increased to 586 usd an ounce from 442 usd in 2005.

In the six months to end June, the company made a net profit of 12 mln usd on sales, including its share of joint ventures, of 63.1 mln. Sales were 114.6 mln usd in 2005.

Peter Hambro may also announce the conversion of its reserves from the Former Soviet Union classification to the JORC (Joint Ore Reserves Committee) code. Australia's JORC classification is widely used an independent standard of verification for resources.

Apparently Citigroup put out a buy rec on this one as well. Haven't seen any details, though.

Results out: profit was $31.7 mil.

sp has reacted favourably to the results and it will be interesting to see what the press and anaylsts conclude ....... making a reasonable profit at the moment and think on balance i'll let it run now that 200 dma has been breached quite solidly

There was no bad news in the results. Reserves are up a little bit, main production increases are in the pipeline . . . The main driver of any increase in the company's worth has to be the increase in gold prices. Unfortunately POG hasn't stated its average realised price per oz this time.

I'm guessing that the analysts will reiterate their buy recs with a slightly increased price target.
Consensus around 1500p?

Moving in the right direction, anyway: POG Bid: 1196p Offer: 1204p Change: 29 296K traded

below is an extract of a few snippets from the RNS/Interview ......

LONDON (Thomson Financial) - Peter Hambro Mining PLC may need to raise 50-100 mln usd to fund its expansion programme, finance director Andrey Maruta said in an interview with Thomson Financial News, adding that he doesn't see the raising of such an amount to be an issue.

'Anything between 50, 100 and 200 mln is not going to be a problem,' he said.

The actual amount, which will depend on gold prices, is likely to be through debt and is anticipated to be at the end of this year or next year, depending on gold prices and the group's expansion programme, he said.

Peter Hambro declined to say whether the company had been approached or was in talks.

Analyst's view: Buy/20 target

Merrill Lynch says the results did undoubtedly disappoint, but says news on the huge recoveries possible from the JORC project was a major positive. Restates its buy advice and reckons the shares are worth twenty quid each.
Broker adds: As Peter Hambro is a volume growth story, we believe that investors should look through near-term earnings, which have a high degree of forecast risk, to potential earnings post the execution of POGs project pipeline.