Peter Hambro's Double Act
Issue 129, June 2015
...but a lot of it has to do with the price of oil and the rouble. With Pavel in control, I'm sure it helps on the Russian operational side.”
“It was considerably tougher not having him here,” Hambro says. Weakness in the rouble he calls “a piece of good luck.”
“The market has a hard time handicapping Russian risk,” one Canadian analyst says, pointing to gold major Kinross, which counts its largest operations in the country. “But there's not much competition if you want to buy assets or explore, it's highly prospective and there's certainly upside.”
Petropavlovsk has not been hit by US sanctions and only deals with Russian banks, Maslovskiy says, whilst Hambro, who has been criticised for his “relentless bullishness about Russia and gold,” says “it has only done me good.”
“In my life, I have seen much worse relations,” Maslovskiy says. “1962, I was just 5 years old, but my father was in the army and they were sitting with their fingers on the red button. It's like family life. Sometimes you're great friends with your wife, but then you come home later and the other side is complaining, so I don't see any drama.”
With hindsight, Hambro concedes, the company's debt load was mistimed, but with production and gold both rising, “it seemed crazy to issue equity," he says. "We got into some terrible vortex, but we escaped. All we can do is produce gold at a good price and that's what we'll continue to do.”
Rising volumes in the stock suggest a transfer of shares from former bondholders to equity investors, he says, in a sign that “some degree of normalcy is returning.” Having turned 70 this year, Hambro also has ambitions to reinstate the company's dividend.
“He found Pavel and made his institutional shareholders an absolute fortune,” one broker says. “He was a man that flew around in private planes and he was one of the heroes, for the mining markets and the City, but when people attach their name to something, their reputation goes up and down. My suspicion is that he wants to go out on a high."
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