Peter Hambro Mining Plc has a number of projects in Russia with reserves and resources of over 100 million ounces of gold as at 1 January 2006.  The Company’s substantial exploration and development portfolio assets are organised into four groups: Pokrovskiy and Pioneer, the Amur North East Belt, Yamalzoloto and Portfolio Assets.

The Group is one of the largest explorers in Russia combining both a world class portfolio of mineral assets with an excellent geological exploration team.  In 2004 the Group completed the construction of three new laboratories providing one of the largest laboratory capacities in Russia, and in 2006 the further expansion of the Group's laboratory facilities and the c.98% acquisition of Irgiredmet Research and Scientific consulting company, based in Irkustsk, meant that our in-house technical capability was able to keep up with the growing pace of demands on our exploration and development efforts.

In 2006 there was an intensive exploration programme on Pioneer, Malomir and Petropavlovskoye deposits (Yamal) in particular.  There was more than twice as much deep drilling and trenching during the year, compared with corresponding figures for 2005.  The major increase in laboratory capacity during 2005 meant that at the same time the assaying backlog was almost cleared. 

Under the leadership of Nikolai Vlasov the Group’s team of exploration scientists and engineers are working on an extensive range of projects intended to further expand the Group's reserves and resources.

Reserves and resources are quoted by the Group according to the Russian reserves and resources classification system.  Although there have been various opinions on this practice, it is logical and reasonable since the exploration areas and operations are in Russia and are subject to the Russian mining regulations.  Recognising that there is a need to express reserves and resources in terms which are more familiar internationally (such as JORC), the Company supports an initiative by CRIRSCO (the "umbrella" committee which co-ordinates the work of the various national and regional reserves reporting bodies such as JORC in Australasia, Pan-European Reserves and Resources Committee (PERC) in UK/Europe and conterparts in North America and elsewhere).  CRIRSCO has set up a working group to develop a rational method of conversion between Russian and international standards.  This has the active participation of the Russian State Committee on Reserves (GKZ).  The Group is represented on this committee by its Chief Geologist, Dr Nikolai Vlasov. 

The Group's reserves and resources estimates have been reviewed by Dr Stephen Henley, who is an independent geological advisor to the Board of Directors of Peter Hambro Mining Plc.  Dr Henley is qualified to act in the capacity of a Competent Person for the purposes of reserves and resources reporting.