Safe havens are the must have asset class in today’s portfolio and any gold producer able to ramp up production in such environs is sure to find increasing favour.  So step forward, Peter Hambro.

The Russian focused gold miner has boosted output while gold mine production across the world has receded.  According to a recent report from London based metals agency GFMS, the output of the world’s gold mines fell by 4 percent last year.

For those able to continually ramp up production while supply in the market stagnates, good times lie ahead.  Here, during 2008 Peter Hambro has delivered.  Total attributable gold production jumped by 36 percent on 2007 reaching 393,600 ounces, the upper end of the group's pre stated 2008 production target of 350,000-400,000 ounces. 

During 2008, the group realised an average gold sales price of US$845 per ounce which was 26 percent higher than the average price of US$668 achieved in 2007 and in our view this will ratchet up gain in 2009.  

Once again, as expected the groups cash cow, the Pokrovskiy mine, was the star performer.  Output from the mine from weighed in at 267,100 ounces, a jump of 13 percent compared to 2007 and importantly exceeding the group's production target for the year by 19 percent.  Meanwhile at Pioneer, progress continues and once again the group exceeded expectations, yielding 72,900 ounces by the year end (900 ounces higher than the 72,000 ounces targeted). 

Furthermore, production was ably supported by the group’s alluvial operations. Producing around 22,700 ounces of gold, output here jumped 38 percent when compared with 2007, once again exceeding the target of 19,550 ounces.  Whilst the remaining source of Hambro’s gold, its Joint Ventures, produced mixed results. As robust a set of production figures these may seem, in our view they are only set to improve.

In 2010, the Malomir deposit is set to underpin production.  However more immediately management believe that the group's total attributable gold production for this year will be between 460,000 ounces and 510,000 ounces and given their accuracy to date who are we to argue.

Not only has the company got its house in order financially, the company has also rethinking its strategy.  Earlier this month it was announced that the group were interested in previously spun off entity Aricom.

Overall, Peter Hambro is in rude health.  Production and exploration are on the climb…

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