Shares digital

Detailed production plans released on Monday by gold producer Peter Hambro Mining (POG:AIM) ‘wipe the slate clean’ for recently misleading investors over its expansion according to stockbroker Ambrian. It says Hambro’s latest development update should be taken as a positive, given that Aim companies aren’t required to release detailed production targets.

Hambro is hoping to produce more than 1 million ounces of gold annually by 2011, having last month confirmed a two-year delay to its target. A year ago the miner had forecast it would produce 1.2 million ounces in 2009, but this has been put back after saying its Miromir deposit is bigger than expected and requires further exploration.

However, a technical report from consultancy firm Wardell Armstrong, has forecast Hambro to produce only 755,000 ounces of gold in 2011. The miner argues that it will maintain higher grades for longer than forecast by Wardell and says the consultancy has not factored in share of production from joint ventures and other assets.

Shares says: Hambro has learned its lesson about being over-ambitious. Expect share price volatility to ease.

by: Dan Coatsworth