British gold-diggers in the limelight


WAR is adding a lustre to a usually dull industry, with gold producers rushing out Press releases in a way reminiscent of the days of the dotcom boom. The uncertainties over Iraq and the ongoing war on terrorism have driven the traditional safe-haven commodity up 38% from the lows of 1999, most of the gains coming since the September 2001 attacks on New York. It has already gained nearly 2.5% this year.

And if Silicon Valley was the centre of the dotcom media limelight, it appears eastern Russia is the hot spot as gold takes centre stage, with two British firms - Peter Hambro Mining and Eurasia Mining - today announcing expanded operations there.

Hambro is to establish a joint venture to chase gold in the Magadan region on the far east coast of Russia. Its partners are Susumanzoloto, which produces 180,000 ounces a year, and Shkolnoe. Hambro will have a 50% stake, which it said will raise its annual production by 50,000 ounces.

Peter Hambro, the company's executive chairman, said: 'We view this strategic alliance in Magadan as an important new step in building our gold mining business in Russia.'

Not to be outdone, Eurasia also announced that it has reached agreement jointly to explore a gold deposit in the Koryak district about 600 miles to the east of Hambro's new operations.