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The Moscow Times: Mitvol May Work With Hambro

Oleg Mitvol

(Vladimir Filonov / MT
Oleg Mitvol
)

EXTRACT: Peter Hambro, Russia’s third-largest gold miner, has lost nearly $500 million in the last two weeks — almost one-quarter of its value — after the environment agency called for the withdrawal of licenses it said were affiliated to the company.
 
Peter Hambro said Tuesday that the talks are a “huge positive step.” Hambro is flying to Moscow to meet the outspoken deputy head of the environment inspectorate, Oleg Mitvol, who said Tuesday that checks were under way of all 54 licenses owned by Peter Hambro-affiliated companies in the country.

THE ARTICLE

Thursday, December 14, 2006. Issue 3561. Page 7.
By Robin Paxton
Reuters
  
 
The Natural Resources Ministry’s environment inspectorate will seek ways to cooperate with Peter Hambro Mining in talks Thursday aimed at easing threats to the London-listed firm’s gold licenses.

The environment inspectorate said in a statement Wednesday that it would discuss licensing agreements relating to Peter Hambro’s subsidiaries in the country.

“We also intend to define options for possible cooperation between the agency and Peter Hambro Mining with the aim of increasing the efficiency of mining operations and the fulfillment of anti-pollution measures,” the statement read.

“Expect the company to agree to the inspection of assets from an environmental perspective,” said John Meyer, director of mining and metals research at Numis Securities.

“Expect a fine, large by Russian standards, of £50,000 to £100,000 [$98,000 to $196,000],” he said.

“A settlement should be reached relatively quickly and the company should get back to generating the production growth from its existing and new mining operations.”

Peter Hambro, Russia’s third-largest gold miner, has lost nearly $500 million in the last two weeks — almost one-quarter of its value — after the environment agency called for the withdrawal of licenses it said were affiliated to the company.
 
Peter Hambro said Tuesday that the talks are a “huge positive step.” Hambro is flying to Moscow to meet the outspoken deputy head of the environment inspectorate, Oleg Mitvol, who said Tuesday that checks were under way of all 54 licenses owned by Peter Hambro-affiliated companies in the country.

The miner will also be represented by co-founder Pavel Maslovsky and consultant geologist Stephen Henley.

The Kremlin’s policy of corralling strategic assets into state or state-friendly companies, with prized mineral assets off-limits to foreign owners, sits uneasily with Western investors.

“Confidence has been shaken in terms of investment in Russia across the natural resources sector, and investors will be more wary of the volatility of the sector,” Meyer said.

“Ironically, we feel this creates opportunities for investors but might also lead to a greater discount on all Russian resource stocks.”

Mitvol said the checks included Peter Hambro Mining’s assets in the far eastern Amur region, where the company plans to quadruple output to 1 million ounces by 2009.

But three of the five licenses in the Yamal-Nenets autonomous district in Arctic Siberia that Mitvol’s agency earlier said should be revoked no longer belong to the company.

In a sign of infighting among officials in the Natural Resources Ministry, Mitvol was shut out of a meeting held Friday by another branch of the ministry, the Federal Subsoil Resource Use Agency.

The agency’s deputy head Vladimir Bavlov has said Mitvol’s agency’s initial claims were “without foundation and premature.”

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