The Technical Audit of Peter Hambro Mining’s mining and mining related assets, which it commissioned from Wardell
Armstrong International (WAI) has been completed. The WAI Audit Report can be found on www.peterhambro.com.
WAI concluded:

• Company Measured and Indicated mineral resources (as defined by the JORC Code (2004)) are 118 Mt at an average grade of 1.15g/t Au containing 4.4 Moz of gold; Inferred resources are 82.7 Mt at an average grade of 1.33g/t Au, containing 3.5 Moz of gold
• The total mineral resources, reviewed by WAI, inclusive of those resources evaluated in accordance with the Russian classified scheme are 344 Mt at an average grade of 1.73g/t Au, containing 19 Moz of gold.

The company believes that “its intensive exploration and drilling programme will further substantiate its resources and reserves and enable it to meet its production targets.   The comparison shows a good overall correlation between the Russian-classified resources published in the 2006 Annual Report and the updated combined JORC/Russian resources quoted in the WAI report. It demonstrates 99.9% conversion of C1 and C2 to JORC Code (2004) at Pokrovskiy, and 91% for those parts of Malomir and Pioneer which were included in the resource model prepared in accordance with JORC Code (2004).  

At Pokrovskiy and flanks, WAI noted:

• The Company’s resource estimate is supported by a positive reconciliation against production records
• The Pokrovskiy plant operations are run efficiently and in line with best international practice
• The environmental management carried out at the site is well organised and appropriate
• The Pokrovka-2 deposit represents an exciting target which is being aggressively explored by PHM in order to better understand the structure and mineralisation. WAI believes that this deposit has the potential to host a significant gold and silver resource.

Pioneer

• WAI considers that the Micromine resource model provides an adequate global resource estimate for Pioneer which can be used for long term planning
• The mining schedule proposed for Pioneer is optimised to balance ore mining, waste mining and average grade each year. Mining will take place from three separate open pits with single combined processing facilities. WAI considers the proposed schedule to be both practical and achievable given PHM’s experience and management expertise gained through the Pokrovskiy operations
• High grade pay shoots (‘ore columns’), such as those at Andreevskaya Zone (Pioneer), which are not yet fully explored and evaluated by the company, carry the potential for additional production during the deposit’s exploitation.

The development and mining schedule for Malomir is ambitious but realistic and achievable, given PHM’s experience in developing and mining Pokrovskiy and in commissioning the Pioneer project.  

WAI considered the portfolio of 10 additional hard rock assets which are being developed by the company in the Amur region and found the development plans to be strategically sound with many of these assets having the potential for the discovery of significant gold resources. All the projects are potentially amenable to open pit mining and are being actively developed and have a potential to contribute to the company’s production schedule and to assist it to meet its production targets over the coming years. These projects all require further exploration and geological modelling work before a meaningful reserve can be established;
One of the most promising deposits, Albyn, appears encouraging for the development of an open-pittable resource. The relatively simple mineralogy and geologic continuity make the Albyn property both an exciting project and one which is worthy of continued exploration and development. PHM expects to report further on this in third quarter 2008.  

WAI has examined PHM’s strategy of expanding alluvial gold production and briefly reviewed a number of the PHM’s placer projects in Amur region. It has concluded that the strategic rationale and projections appear sound and, if successful, will provide PHM with significant and increasing incremental gold production.  

In the Yamal region, WAI reviewed the exploration work undertaken by PHM at Novogodnee Monto deposit and considers that this deposit potentially has a substantial gold and iron resource base able to support a mining project. The position of the Novogodnee Monto deposit in relation to the rail line and the vast increase in the need for construction materials as a result of the regional activity in the oil and gas sector mean that the aggregates from this deposit may considerably enhance the project’s economics. WAI believes that there is considerable potential to increase the resources for Novogodnee Monto deposit, given the number of positive indications identified and exploration results achieved to date.

WAI reviewed the exploration data for work undertaken on the Toupugol-Khanmeishorsky licence area to date and is satisfied that it is a promising exploration asset with the potential to establish a mineral resource similar to those identified at Novogodnee Monto and Petropavlovskoye.

Ozernoye has the potential to become a sizeable polymetallic deposit. Exploration is ongoing, and WAI considers that if the geological structure and grade distribution of this area can be properly understood, there are real possibilities for tracing PGM mineralisation along the pyroxenite belt south-westwards for some tens of kilometres from the Ozernoye deposit, through Pyatirechenskoye exploration area (itself not yet explored in detail) and beyond. 
WAI also believes that there is considerable potential to improve the resource position at Rudniye Gorki, given the favorable exploration results achieved to date. As an exploration portfolio of assets, WAI considers the Yamal assets to be strategically valuable, with many properties having the potential for the discovery of significant gold resources as well as PGMs and other minerals.  

Peter Hambro, Executive Chairman of Peter Hambro Mining: “The JORC total of 8 Moz is an excellent basis from which to assess the minimum future potential of the Company and the grand total of 19 Moz, taking Russian and JORC ounces together, compares very favourably with the 17 Moz shown in the company’s Annual Report. The very good correlation between WAI’s opinion of PHM’s reserves and resources and the company’s published view is reassuring.”