Hambledon Mining still a ‘buy’ at FD Capital, target price 13 pence

August 03. Proactive Investors UK

Hambledon Mining still a ‘buy’ at FD Capital, target price 13 penceHambledon Mining plc is an AIM-listed gold mining and exploration company which is producing gold at the Sekisovskoye gold deposit and owns the Ognevka processing plant, both of which are close to Oskemen in East Kazakhstan.

Fox-Davies Capital issued a note on Hambledon Mining PLC (AIM: HMB), retaining its ‘buy’ recommendation for the Kazakhstan-focused emerging gold producer as well as keeping its target price at 13 pence a share.

Headlining the research piece “Has the corner been turned?” the broker said it anticipates the group to post a small loss for the first half of 2009 of around ?1.22 million, but expects a profitable second half driven by a better operating performance.

It noted Hambledon production figures for the quarter ending June 30 2009, showing that the Sekisovskoye mine processed 212,272 tonnes of ore grading 1.11 grams per ton of gold. The recovery of gold was 80.8 percent and gold produced amounted to 6,128 ounces. The mine also recovered 13,611oz of silver.

“From several points of view, this was the best ever quarter at the Sekisovskoye mine. Tonnes treated at 212.3k, surpassed the previous best of 162.1k and gold produced was 6,128 oz, beating the previous best of 5,308 oz. Even within the quarter, the June month was the best for tonnes processed and gold produced,” it said.

However, the current stripping ratio of about 5, is the highest in the life of the mine, the broker said, adding this is making it difficult to mine sufficient ore and subsequently, the mill tonnage is being supplemented with material from the low grade stockpile. “As the pit deepens, and the stripping ratio falls, we anticipate the mining of additional tonnages at standard mined grades. Various options are also being investigated to increase the mining rate in the short term.”