Peter Hambro is to step down as chairman of London-listed gold mining company Petropavlovsk after more than 20 years following pressure from . Peter Hambro ousted from his gold mining company Petropavlovsk. ousting Peter Hambro who has run the of the board at Petropavlovsk, including Hambro. Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro .
Petropavlovsk PLC is a London listed mining and exploration company with its principal assets located in Russia. Formerly known as Peter Hambro Mining PLC. Jul 04, 2015 · Peter Hambro's nightmare when his Russian Gold miner nearly went out of business A tumbling gold price nearly wrecked plans for the Russian gold mining. Peter Hambro is to step down as chairman of London-listed gold mining company Petropavlovsk after more than 20 years following pressure from . Peter Hambro ousted from his gold mining company Petropavlovsk. ousting Peter Hambro who has run the of the board at Petropavlovsk, including Hambro. Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro .
“If I was in Athens now and I had a few gold sovereigns I would be feeling a hell of a lot happier than if I was relying on my euros in a bank, or my ability to get it out of a cash machine,” said Mr Hambro.
However, his deep-rooted belief in gold was also the reason for his near undoing. Peter hambro mining petropavlovsk – which up until 2009 was known as Peter Hambro Mining – has been one of the biggest victims of the collapse in the price of gold from a peak above $1,900 per ounce to its current levels around $1,200 per ounce.
Peter Hambro started the gold mining business in 1994
The company, which is listed on the London market, peter hambro mining petropavlovsk, had borrowed hundreds of millions of pounds and invested heavily in the development of a Malomir deposit in Siberia.
The mine has mining supply abundance of refractory ore, which is relatively cheap to extract but expensive to process, requiring the use of pressure oxidation plants to transform it into gold.
“We were certain that the gold price was going up, which it did. We wanted to increase our production.
Peter hambro mining petropavlovsk spent a lot of money increasing capacity. One of the peter hambro mining petropavlovsk we saw was that the world was running out of easy-to-process ore,” he said.
Mr Hambro sold the idea to investors on the basis of the gold price continuing its upward trajectory, and when it went into reverse the company had to perform an about-turn on its plans.
“Nothing that we did was illogical,” he said. “We thought it through, but we got it wrong, peter hambro mining petropavlovsk. The gold price just crashed. I had told the world that gold was going to $2,000 per ounce and I wasn’t far wrong, but when it came down it went thumping down. The momentum of it peter hambro mining petropavlovsk away from us. We didn’t pack up, we carried on and turned things around from refractory to non-refractory and basically did our best to make it work and eventually we had to put our own money in to do that.”
The financial costs of the mistake have been crippling for both the company and Mr Hambro, peter hambro mining petropavlovsk, who puts his own losses from the debacle in the region of “hundreds of millions”. Shareholders have also suffered. Petropavlovsk’s shares are down almost 50pc so far this year at around 7½p. At its 2010 height, the miner’s share price nudged £13.50.
“What I have said to equity holders is that this has been effectively 21 years of my life. For the first eight years I worked for free and I put my own money into it with Pavel [Maslovskiy]. I was 50 when I started this and I’m now 70. What I built got destroyed,” he said.
According to Mr Hambro – who originally ventured beyond the Iron Curtain in the Cold War era to broker gold deals with the former Soviet Union – at its peak Petropavlovsk had an enterprise value of around $4bn (£2.5bn) and net debt of around $500m.
Now the company’s enterprise value stands at around $1bn and debts of $700m, a far more worrying ratio for investors to absorb, especially when gold prices show little sign of returning to their previous highs.
“It was just a black hole. Everything was disappearing and there was nothing we could do to stop it until the very last minute when we said, OK we will do a debt-for-equity swap with the bondholders, and Pavel, myself and our other partner put our hands in our pockets and after that we were safe again,” said Mr Hambro.
Adding to his problems caused by the plummeting gold price, economic sanctions imposed on Russia by the West have complicated the company’s dealing with its bankers.
“They have had collateral effects rather than a direct impact. It’s very difficult to get an American investor or a Canadian investor interested. Not that bad for equity but very bad for debt. In terms of our relationship with the banks, they have problems with interbank lending, which makes things difficult,” said Mr Hambro.
Despite nearly losing control of the company in an episode, which Mr Hambro admits left him genuinely “scared”, peter hambro mining petropavlovsk, he has lost none of his enthusiasm for Petropavlovsk and turning the company around.
The company is producing around 680,000 ounces of gold per year and its guidance for the next five years is for output to remain at around 600,000 ounces, which will generate significant cash flow, peter hambro mining petropavlovsk.
“I couldn’t walk away. I’m captain of the ship and I would have to go down with it. I’m just that kind of guy. I come from a long line of people who have behaved well. My father, mother, grandparents, great grandparents would not have been happy if I had done anything else,” said Mr Hambro.
Based on gold remaining within its current range, Mr Hambro is confident of maintaining a margin of $500 on every ounce that the company can produce, which is equivalent to around $300m of cash flow, peter hambro mining petropavlovsk. “Our inherent strength is that we are in an area with a nikita mining amount of gold,” he said.
Provided that there isn’t another major dip in gold prices, this should mean that Petropavlovsk could be debt free by 2019. Restoring the enterprise value of the business, he says, is his “number one” priority.
“It’s peter hambro mining petropavlovsk shareholders who have taken the beating. What we have got to do now is pay off that debt because we have spent all the money on new plant and equipment and our capital costs going forward are very low,” he said.
Given the growing economic uncertainty in Europe and the recent crash of the Chinese stock markets, the likelihood is growing of gold prices rising again as investors search for safe-haven assets.
However, Mr Hambro questions just how much gold is actually in circulation, making it hard to predict prices of the precious metal.
“For some reason I don’t understand why gold has reacted the way you would think it would react, peter hambro mining petropavlovsk. Gold has gone back into the hands of governments, particularly in China and Russia. China has encouraged people to go out and buy gold.
“The Shanghai exchange has shipped an incredible amount of gold to the Chinese people but where that has come from I don’t know. The fact it takes five years for the German central bank to get its gold back from the Federal Reserve is very strange. If it’s really there, it should be possible to deliver much more quickly than that,” he said, peter hambro mining petropavlovsk.
Immaculately dressed as he sits in his oak-panelled office with walls adorned by his own watercolour paintings of the English coastline, Mr Hambro, who has spent a lifetime working in and around the City, shakes his head at some of the financial scandals that have rocked the public’s confidence in business. He is also aghast at the bonus culture, which continues to dominate how business is done in the Square Mile.
“I grew up in a City family. The City was a small village when I started where everyone knew everyone and in my view it was very well regulated. There were no rules, but people understood that they had to behave properly and they did. I didn’t get a bonus for most of my City career. It wasn’t something you relied on.
“You lived on your salary and people lived really, really well,” he said.
Petropavlovsk plc - WikipediaPeter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro . Feb 18, 2015 · Russian gold miner Petropavlovsk Peter Hambro's Petropavlovsk warns it will go bust if rebel investor succeeds Peter Hambro started the gold mining. Peter Hambro has lost his bid to stop a major Russian investor from filleting the board of Petropavlovsk, the gold mining company he co-founded more than 20 years ago. Sep 14, 2009 · MOSCOW, Sept 14 (Reuters) - Petropavlovsk, the Russian mining group founded by Peter Hambro and Pavel Maslovsky, has . Peter Hambro, the co-founder of Petropavlovsk, has been voted off the Russia-focused gold miner’s board following a battle with its largest shareholders over. Shareholders voted for four new board members at Russian-focused gold miner Petropavlovsk (POG.L) on Thursday, ousting Peter Hambro .
Shareholders voted for four new board members at Russian-focused gold miner Petropavlovsk (POG.L) on Thursday, ousting Peter Hambro . Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro ousted from his gold mining company Petropavlovsk. Peter Hambro . Sep 14, 2009 · MOSCOW, Sept 14 (Reuters) - Petropavlovsk, the Russian mining group founded by Peter Hambro and Pavel Maslovsky, has .
Petropavlovsk operates four gold mines in the far east of Russia. It borrowed heavily to fund expansion just as the gold price tumbled earlier this decade and found itself saddled with debt, sending its share price tumbling. In April it returned to annual profit for the first time since 2011.
Reports in the Russian press have suggested that Renova intends to merge all or part of Petropavlovsk with Highland Gold, a gold miner part-owned by Roman Abramovich.
"I hope with all my heart that our new board does not manage to upset the excellent progress we have made," Mr Hambro added.
Mr Hambro, a scion of the City banking family, founded Petropavlovsk with Pavel Maslovskiy in 1994, and still has a 4.5pc stake. Mr Maslovskiy, the company’s chief executive, was reappointed to the board.
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