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

cheers GF.

Hambro is a good way to mine a rich seam

By Alistair Dawber


Tuesday, 21 April 2009
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Our view: Buy


Share price: 513p (-47p)

It seems fairly easy logic to follow that if gold prices are on the way up, shares in those companies that mine the stuff might be worth buying. And that makes Peter Hambro Mining rather a tricky punt for investors.

Several analysts believe the price of gold is going to spike in the not-too- distant future, which ordinarily would make the group, which mines gold in Russia, an obvious bet, especially with the shares trading down by more than 50 per cent in the last 12 months. Add to this that the company is about to buy Aricom, an iron ore producer, in a deal that analysts say could transform the group possibly even propelling it into the FTSE 100 and the fact that full-year revenues are up 69 per cent, and surely you have a so-called no-brainer.

Well, you do not. The shares were down 8.4 per cent yesterday, after the chairman, Peter Hambro, said that the last year had been one of the toughest he has known: profits were down and the full-year dividend has been cancelled.

Mr Hambro blamed exceptional costs, such as a severe fall in the value of the rouble against the dollar, as well as charges relating to increasing production. He says that to soften the blow for investors, he will take a 50 per cent cut in his bonus.

While Peter Hambro's shares are not expensive, stock prices of miners and exploration groups are largely explained by news and updates. The news from Peter Hambro is likely to be mostly good in the coming months and we reckon that yesterday's dip is a good chance to get in at a depressed level. Buy.

From that Gold buying pog is the same as buying oil futures and rouble which are highly correlated

Fairfax Research 21/04/2009

Peter Hambro Mining (POG LN) price 518p, mkt cap 504m (+ Aricom 373m) LSE listing to propel stock higher
Earnings should rise markedly this year as the new Pioneer gold mine ramps up production and as unit costs
fall.
We expect the LSE listing of Peter Hambro Mining to propel the shares higher as index funds and new
investors move into the stock on its upgrading from the AIM market.
Antofagasta saw a similar upward move nearly 10 years ago when the stock was first admitted to the FTSE
allshare indices after many years of being excluded through foreign ownership.
We estimated at the time that Antofagasta which was valued at around 500m, from memory, would see
around $100m of new fund buying activity despite a lack of liquidity and only 36% free float. Hindsight tells
that this was a woeful underestimation of the buying power generated by the move into the FTSE allshare and
FTSE 250 indices by the miner and the stock has now progressed to a market capitalisation of >5bn.
Conference call: Yesterdays conference call with Peter Hambro and the fd revealed further information on
the progress of the group going forward.
Aricom: Aricoms assets are not expected to consume significant cash from here as the new group should be
able to complete deals with Chinese miners and consumers to joint venture the developments.
Aricoms cash resources are therefore wholly available to the combined group for the restructuring of the loans
and convertibles and for the repayment of other short term lending.
Mark to market non cash adjustments removed with the repurchase of the gold convertible which has been
trading at a discount. The team has bought in some $87m worth of the convertible so far this year at a
discount to its issue price. The exchangeable bonds can be put in November this year.
Pokrovskiy: the Pokrovskiy gold mine has supported group development for some years but continues to
extend its boundaries, grades remain relatively consistent and the operation remains relatively low cost.
Pioneer: production at Pioneer should push earnings markedly ahead this year as higher grades and better
recovery rates feed through into new production. Unit costs should fall markedly at the mine and should also
benefit Pokrovskiy where staff training costs have also had an impact.
Malomir: the 1,500m strike length of the deposit is now explored and the previously announced plan to mine
the oxide portion of the deposit is progressing.
Costs: rose last year on higher oil prices and a strong Rouble in H1. Gold production was interrupted at
Pioneer and the cost of supporting loans into the group was borne by the existing operations rather than
capitalised into project finance. Oil prices and the Rouble have both fallen markedly, convertible payments are


already being bought in and other loans to the group will be repurchased following the takeover of Aricom. All
this suggests a markedly improved P&L for next year.
Dividend: passing the dividend is disappointing for investors and might indicate a lack of confidence in
earnings for next year. But remember, the world appears less predictable than in past years and management
are taking a prudent approach to cash management following six months of debt restructuring and capital
reorganisation. Paying a dividend following the recent rights issue may not look good to some.
Gold: prices are volatile at the best of times although the past six months have seen gold as perhaps a more
stable and solid investment than many. While the gold ETFs could continue to see cash inflows for the
purchase of gold stocks, this is normally a seasonally weak period. If ETF stocks see further selling gold
prices could fall to $850/oz relatively quickly. However, resilience so far indicates investors are opting to hold
on to their gold holdings as a hedge against inflation and currency volatility.
Conclusion: We seen Peter Hambro Mining as one of the best opportunities in the market for investors
looking for exposure to gold. The company should, at long last, realise the value of its operations and
production from the new mine at Pioneer should generate significant earnings growth.

MoneyAM
"Peter Hambro Mining has published the prospectus for its move from AIM to the London Stock Exchange's main market. Admission of the company's ordinary shares to the Official List is expected today. "

ZAK MIR pro TAer as just given his views on POG....

Zak Mir



Reged: 28/06/07
Posts: 762
Re: Peter Hambro Mining - POG.L
#444008 - 22/04/09 08:09 AM Edit Reply Quote



We seem to be celebrating chart wise, with a triple golden cross between the 10,20 and 50 day moving averages this week, something which suggests while above the 50 day moving average at 496p the upside here could be as great as the February 612p high.

it's an upward cross with momentum between 50 (maybe 25) and 200 dma that you need

Hows it going pineapple bonce?.

POG looks good to me.

Hope we get rid of all that volatility weve had over the past 3 or 4 months.

That would be a start.

i'm out of these at the moment (and ORE of course), but have topped up HOIL and also bought a few WOS this morning, on the basis that anything that helps the housing market must help WOS

some free technical tools and vid's on Gold here http://www.tradinghelpdesk.com

Looking very good this morning for POG, come on cyners get your wallet out.

Upgrade to BUY, we are bullish on gold
We upgrade Peter Hambro Mining (POG) to BUY, setting a new price objective of
GBp850, 1.5x our estimated post-Aricom merger NPV/share. This P/NPV
multiple is still a discount to gold-producing peers, which trade on 2-3x NPV.
Gold has pulled back from recent highs, presenting an interesting entry point into gold equities, in our opinion.

Our commodity strategist, Francisco Blanch,
believes that gold could touch US$1500/oz on a three-year view.

Aricom merger expected to complete late April
Shareholders of both Peter Hambro and Aricom (ORE, not covered) have voted to
approve the proposed merger, whereby ORE shareholders receive 1 POG share
for every 16 ORE shares held. We understand that the proposed transaction is
now subject only to court approval, which is expected around April 22nd. While we think the transaction is NPV dilutive, it does resolve POGs financing issues
related to potential redemption of its gold convertible bond and its capex plans.

POG to trade on main board = 9.5 days trading volumes
POG targets a move to the main board (from AIM) around the same time as the
completion of the shareholder-approved merger with Aricom. Our index group
suggests that index trackers could need to buy 8mn shares (based on a free-float
factor of 100%, which it uses in the AIM All Share Index), or 9.5 days volume. We believe that this could be quite supportive for the shares.

Changes to earnings: 2009E EPS -12%, 2010E EPS +2%
We incorporate new production targets per POGs recent presentation to analysts.
To be conservative, we have assumed the bottom end of the companys
production guidance. 2009E EPS -12% to US$1.81/sh. 2010E EPS +2% to
US$3.06/sh. To be clear, we will not factor Aricom into our model until the deal
completes. We see the deal as approximately 24% NPV dilutive.

Could just be the ride we have been waiting for.


China reveals it has 1,054 tonnes of gold -XinhuaReuters, Friday April 24 2009 (Adds total value of holding)
By Alfred Cang and Lucy Hornby
SHANGHAI/BEIJING, April 24 (Reuters) - China revealed on Friday that it had quietly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes and confirming years of speculation it had been buying.
Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told Xinhua news agency in an interview that the country's reserves had risen by 454 tonnes from 600 tonnes since 2003, when China last adjusted its state gold reserves figure.
The world gold market has been buzzing with talk about China buying gold for years as the country's foreign exchange reserves have rocketed, and speculation has picked up since the global economic crisis threatened to weaken the value of those reserves.
Gold prices jumped on the news and were up 1 percent on the day at $910.80 an ounce at 0540 GMT. By a Reuters calculation, China's holding of gold would be worth $30.9 billion at current prices.
China recently reported the change in its gold holdings to the International Monetary Fund and would include the latest change in central bank reports and balance of payment statistics, Hu said.
China's reserves were now the fifth biggest in the world, with only six countries holding more than 1,000 tonnes, she said.
China had increased its stocks by buying on the domestic market and from domestic producers.
Gold market participants said Hu's revelation was good news for the market and signalled likely further buying.
"The comments indicate that China will buy more gold as reserve to improve its foreign reserve portfolio. This is a trend," said Yao Haiqiao, president of Longgold Asset Management.
Hou Huimin, vice general secretary of the China Gold Association, said China should build its reserves to 5,000 tonnes.
"It's not a matter of a few hundred, or 1,000 tonnes. China should hold more because of its new international status, and because of the financial crisis," he said.
"The financial crisis means the U.S. dollar value is changing fast, and it may retreat from being the international reserve currency. If that happens, whoever holds gold will be at an advantage."
The European Central Bank recommends its member banks hold 15 percent of their reserves in gold, but among Asian nations the percentage is far smaller, said Albert Cheng, World Gold Council managing director for the far east.


http://www.guardian.co.uk/business/feedarticle/8471411

Cazenove re-initiated today :-

We view the new Peter Hambro very positively, for a number of reasons and therefore resume
coverage with an OUTPERFORM recommendation. Key points:
Valuation multiples remain significantly below the peer group (over 60% on FY09E EV/EBITDA
and PER) despite the deal being dilutive on earnings and NPV metrics. The EPS downgrades
stem primarily from the fact that Peter Hambro has issued new shares equivalent to 90% of its
existing share capital to buy assets that are in the early stages of ramp up or even earlier and
therefore generating no earnings. The reduction to our NPV is less severe while the deal is
highly accretive on resource multiples, indicating the upside potential within the combined
group.
Importantly though, the deal has solved the companys balance sheet issues, which had proved
a millstone around its neck for some time and led to significant underperformance against the
peers and gold. There is also now cashflow (c.$200m pa on spot) and a stronger operational track record backing the legacy Aricom iron ore projects, significantly increasing the likelihood
of obtaining finance in our view.
As it stands, the combination of the companies assets sets the enlarged group up to generate
fairly stable cashflow from its low cost, expanding gold operations with additional leverage to
the industrial production cycle through the iron ore projects.
Strong growth potential. The concept of a diversified miner in a relatively untapped but highly
prospective region such as fareastern Russia, particularly given its proximity to China, offers
the potential for significant upside in our view. With an established production base and,
potentially, a Chinese partner, the story begins to look even more interesting and warrants a
premium to NPV in our view.

The gold price has rebounded strongly,too, now up to $910.

Yep things are looking pretty bullish CP.

Im hoping for a sustained rise over a number of weeks.

I use the PHAU ETF to play gold.

Lifted from advfn..

seem to have been some updates to price targets from analysts

Troika Dialog have Buy with PT 891.77p
Unicredit have Buy with PT 898.32p

If it gets to those levels i think it is on the verge of FTSE100 entry as it would be about 90th largest company by market cap.

some idiot recently on this thread predicted this to plummet to under 400p......what an idiot when it was about to join ftse plus gold price forecast to go up.....and plus merger solving any issues

So what?

personally, i think oil is more likely to end 2009 >$70 than gold is to finish >$1000 ..... you will note that i have ignored the super-hype of recent days that gold will shortly(?) rocket to $1500, which io think has about the same credibility as when oil was deemed a racing certainty to be >$200.

that said, POG is about the cheapest gold producer in the world and has now brought ORE back into the fold, i guess at a lower price than they sold it off in the first place! ...... cash benefit apart, ORE diversifies POG's commodity assets, and that can be no bad thing.

on the negative, side, POG operates out of russia, which is notorious for its political shenanigans, though of course the hambro family has more than a century's experience in dealing with the politicos there.

the chart below is also showing good strength, so given a fair wind, there could well be some decent profits to be made in the near future ...... but don't forget that not only has NY now risen for 7 straight weeks, but POG itself can be frighteningly volatile.



my gut feeling on this saturday morning would be to wait for a bad day (next week?) before jumping in