To March 31 the firm produced 5,084 ounces of the yellow metal compared to 4,870 ounces in the same period in 2012 as the recovery rate improved to 85.8%.

Silver production in the three months was 6,448 ounces (2012: 5,029 ounces).

In a quarterly activities report, the firm noted that since the successful partial tender offer from African Resources, there had been a complete overhaul of the senior management team at Hambledon, including the appointment of a new chief executive and new chief financial officer.

All repair works at the tailings dam where there was a leak have been completed and tailings dam 3 was commissioned in January 2013 and is operating in accordance with its design parameters, the firm added.

Work on the underground mine, which under the previous management was suspended, was restarted in January this year, it added.

"The company continues to examine a number of acquisitions and other inorganic growth opportunities.

"These are at very early stages and at the present the principal focus remains improvement and growth in the current operations," it added.

Hambledon shares were unchanged at 1.125p.

Kazakh gold miner Hambledon Mining (LON:HMB) has appointed Aidar Assaubayev as its new chief executive.

The company, which owns the Sekisovskoye underground project, said Assaubayev will focus on a comprehensive review of Hambledon’s operations and strategic options “with a view to identifying the best way forward for Hambledon and its shareholders.

The company said Assaubayev brings a wealth of experience in gold mining, as well as significant expertise on the ground in Kazakhstan, having been executive vice chairman of KazakhGold Group and vice president of gold exploration and development company JSC MMC Kazakhaltyn.

Aidar Assaubayev said: “I am very excited with the prospect of working with Hambledon to make it a successful gold mining company and I am dedicated to delivering value for all shareholders.

“Hambledon has great potential for growth and development which I will do my utmost to deliver.”

The company is the subject of an offer by African Resources, which is seeking to acquire up to 60% of Hambledon. The partial offer was declared wholly unconditional on December 7.

The offer was announced on November 2. By the end of November African Resources had received acceptances of its 2p a share offer in respect of 59.88% of the issued share capital of Hambledon.

African Resources, which is registered in the Cayman Islands, was created for the purposes of making the offer for Kazakhstan-focused gold miner.

The stock is changing hands for 1.6 pence, which is a 25 per cent discount to 2 pence offer tabled by African Resources for 60 per cent of Hambledon.

There has been some upward movement from the 1.2 pence at which Hambledon was trading before the approach. But frankly Hambledon should be trading much closer to the offer price.

There will be some suspicion that African Resource, led by 47-year-old Ashar Qureshi, is getting Hambledon on the cheap. Certainly those who bought a year ago when the stock was changing hands for 4 pence will think this is the case.

But let’s consider what will happen if the offer fails to get the requisite support (and this is what the share price is currently suggesting).

Well, then Hambledon loses out on a supportive investor, access to new sources of much needed capital and technical and in-country experience. 

A source close to the deal told me: “If successful, the company will retain its listing and our aim is to work closely with the management team in ameliorating its current situation. 

“We will give it access to capital that has up until now not been available, transform the performance of the current portfolio through our technical and in-country experience as well as acquire additional assets.”

Remember the ride for investors thus far has not been a smooth or happy one. 

Its main asset is the Sekisovskoye gold and silver deposit in the Glubokovsky region of East Kazakhstan. 

Production in the last quarter was down 21 per cent at just under 6,000 ounces of gold with output from the open pits constrained by reduced tailings dam capacity.

Meanwhile, the recent strategic review has suspended underground operations so as to conserve cash.

There is also litigation between Hambledon and the Kazakh authorities regarding an environmental issue with production, which is on-going. 

In short, the past year has been an uphill struggle for company – and the next 12 months looks equally challenging if the management has struggle on unaided. 

Investment, help and guidance will, my insider at African Resources’ tells me, also allow Hambledon to make the most of the deal to acquire Akmola Gold, which has two gold deposits in northern Central Kazakhstan.  

“African Resources believes that the Sekisovskoye mine and the Akmola assets present attractive growth and value opportunities,” my insider concludes.  

“Hambledon has the potential to perform if it can alleviate the issues regarding its operational record.  

“African Resources believes that the change of structure will be viewed positively and subsequently a more palatable solution to the environmental situation will be found for all parties, thus securing the future of the company.”

Remember the offer closes on November 23. For more information go to www.hambledon-mining.com.

The offer of 2p per share values Hambledon at £19.6 mln and will see African Resources take up to a 60% stake and not less than 50.1%.

African Resources is backed by the Assaubayev family. They founded Kazakhgold and subsequently bought back its mines in Kazakhstan after it was reversed into by Russian gold giant Polyus. 

African Resources, which already owns 9.02% of Hambledon, said its intention is to utilise its local knowledge and access in the jurisdictions to support its growth.  It is committed to Hambledon retaining a UK listing for the foreseeable future, it added.  

Hambledon Mining has struggled after it received hefty fines and clean-up costs following a tailings dam breach at its flagship Sekisovskoye mine in Kazakhstan.

It has appealed against the fines and penalties imposed but the cash constraints have meant plans to expand the mine underground have been put on hold.

African Resoruces said its natural resources experience and access to significant financial resources make it a well-placed partner for Hambledon.

“African Resources believes that Hambledon's Sekisovskoye mines and the Akmola [if this deal is completed] assets present attractive growth and value opportunities,” it said. 

Tim Daffern, Hambledon’s chief executive, and African Resources have also been discussing gold properties in Mauritania that might prove beneficial to Hambledon, today’s statement added.

Daffern will stay on with Hambledon if the offer goes through. 

George Eccles, Hambledon’s chairman said: "The independent directors are pleased to have reached this agreement with African Resources on the partial offer, which represents a significant uplift for Hambledon shareholders who wish to realise part of their shareholding whilst at the same time maintaining an investment in Hambledon alongside African Resources.”

A spokesman for African Resources added: “The acquisition of up to 60% of the issued share capital of Hambledon is a great opportunity for African Resources. The shareholders of African Resources are long-term investors in natural resources, metals and mining and have a track record of effective investment and support of enterprises both in Central Asia as well as other emerging markets. “ 

Hambledon Mining (LON:HMB) still believes the fines and penalties it has paid to the Kazakh government are “unjustifiable”, it said in a statement.

This comes after its appeal was rejected by the Court of East Kazakhstan Region.

The Court handed down a verbal judgement with a written judgement to follow.

The company’s subsidiary Sekisovskoye Mining Company (SMC) was handed a US$9.5 mln penalty after an alleged minor breach at tailings dam 3 at its Sekisovskoye gold project at the end of October last year.

The National Environmental Department of East Kazakhstan made the claim against SMC for compensation for damage caused to the environment.

Hambledon said it would appeal against the latest decision to a higher level court, the Court of Cassation within the Regional Court of East Kazakhstan.

It is also making arrangements to engage additional legal advisers to support the process as it looks to get back part of the money it has already paid.

Shares slipped 9% to 1.25 pence.

Hambledon Mining‘s (LON:HMB) production edged up in its latest quarter with higher output of both gold and silver. 

The company’s Kazakhstan-based Sekisovskoye mine produced 5,875 ounces of gold and 7,469 ounces of silver in the three months to September with plant recovery averaging 80.8%.

In the preceding three months Hambledon had produced 5,840 ounces of gold and 6,856 ounces of silver.

Hambledon’s underground trial delivered 15,125 tonnes of ore averaging 3.32g/t Au.

Some of this ore has already been processed and the remainder will be processed in the final quarter, Hambledon said.

The company recently decided temporarily to suspend underground operations to preserve cash while it carried out a strategic review into the development of the underground operation.

Capital expenditure on the underground mine will temporarily cease from this month.

Hambledon added that the repair to Tailings Dam No. 3 is complete. The dam is expected to be commissioned in November 2012 after receipt of government permits.

The reduced tailings dam capacity hit processing plant capacity over the last three months but this capacity is expected to improve as the tailings dam comes back on stream.

Hambledon has appealed against the fines levied against the company following the dam breach.

During the quarter ended 30 September 2012, the open pit mining operations extracted 185,300 tonnes of ore averaging 1.2g/t Au.

Gold miner Hambledon Mining (LON:HMB) is to appeal to a higher Kazakhstan court against penalties for a tailings dam leak after a local judge restated the original level of fines.

Hambledon subsidiary Sekisovskoye Mining (SMC) received fines and clear-up charges of US$9.5 mln for what it says was a minor breach at a  tailings dam 3 at Sekisovskoye in October last year.

The Supreme Court of Kazakhstan overturned the ruling and sent the case back to the Specialised Inter-district Economics Court of East Kazakhstan to be reviewed by a different judge.

However, the local court has now restated the original US$9.5 mln penalty, prompting Hambledon to say that the evidence used by the court was technically incorrect.

The company added it and its legal advisers consider the fines unjustified and violate the legal and procedural norms of the Republic of Kazakhstan. 

The company has prepared an appeal against this resolution to a higher level court, the Regional Court of East Kazakhstan.

In the event that the hearing of this appeal is not satisfactory, SMC retains the right to appeal to various higher intermediary Kazakhstan courts including the Supreme Court of Kazakhstan.

Hambledon has already paid US$3.9 mln in the fines and penalties and wants to obtain obtaining at least partial repayment of these.

Fairfax has reiterated its ‘buy recommendation for Hambledon Mining (LON:HMB) following a visit to the Sekisovskoye gold mine in Kazakhstan.

Analyst John Meyer said the company is moving ahead with the underground operations while open pit operations are performing well.

The processing plant is currently undergoing a capital refurbishment programme in order to cut processing costs and improve gold recoveries.

Meyer has a 7 pence price target on the stock, providing significant upside to the current level of 1.68 pence.

Underground mining should contribute nearly 50 percent of the 40,000 ounces gold forecast to be produced in 2013. 

The analyst said results of bulk stoping trials, with a view to ramping up the mining rate, that are due to start in September should be watched closely for an indication of future developments.

Regarding the open pit operations, Meyer said the amount of ore mined with better grades than initially forecast should be enough to avoid tapping low grade stockpiles before the Central and Northern pits deplete in the first quarter of 2015.

He expects the elevated operating costs to come off from the US$1,209 per ounce level expected for the 2012 full-year to US$887 per ounce in 2013 as the underground mine gains pace and management initiatives to cut processing costs start to pay off.

The remedial works on Tailings Dam #3 are progressing on schedule and should be completed in September, for the processing plant to return to a normal 750,000 tonnes/year operating capacity in October.

Hambledon plans to release an updated JORC resource for the underground mine before the end of the year, with management looking to increase the confidence level of the resource, Meyer added.

adds broker comment at end

Hambledon Mining (LON:HMB) said quarterly production from its Sekisovskoye mine in Kazakhstan was broadly in line with expectations as it unveiled a new member of the board.

She is Sabine Anderson, who joins as a non-executive director and as an appointee of the European Bank for Reconstruction and Development, which is helping finance the company’s growth plans. 

Chairman George Eccles said: “We are very pleased that Sabine will be joining our board. She brings a wealth of experience especially in the gold miningsector, and will ensure that EBRD’s high standards are adhered to at every level of the company.”

In the three months to June 30, Hambledon produced 5,840 ounces of gold and 6,856 ounces of silver. 

Although in line with management’s expectations, output was held back as “remedial work” was carried out on one of the project’s tailings dams.

The group also revealed that only “modest amounts” of ore were taken from the underground portion of Sekisovskoye.

“The mining of ores from the underground was temporarily suspended in early June and re-scheduled until mid-July to take into account significant water in-flows that diverted equipment from ore mining to accelerate infrastructuredevelopment,” the company said. 

“This allowed continued development of the underground decline which acted as an additional temporary sump and the construction of an additional water chamber.”

House broker Fairfax said the open pit at Sekisovskoye performed better than it expected, but the underground operations experienced teething problems and the significant water in-flow.

The broker has trimmed its price target to 7.1 pence from 7.3 pence due to an expectation now of production of 21,300 ounces of gold this year against a previous forecast of 25,600 ounces.

It may adjust its figures again as the mine starts to develop its next level and to recover production following the water ingress, it added.

Hambledon Mining (LON:HMB) should return to profit in the current year as mining of waste and ore at Sekisovskoye gold mine has been progressing steadily, according to research house Edison. 

The leak at Tailings Dam 3 (TD3) incident continues to hang over the shares but waste stripping within the Sekisovskoye open-pit mine was completed on schedule by end 2011, allowing for increased gold production at lower costs through greater use of Hambledon’s expanded mining fleet. 

Further, underground development is continuing to ramp up over 2012 and contribute around 34 per cent of gold production by end year.

Ongoing underground drilling has increased confidence in the gold resource/reserve, with many intersections indicating better grades over greater widths than previously identified from historic surface drilling.

Gold production from Sekisovskoye is forecast to rise by about 30 per cent to 26,000 oz 2012. This target should be realised – with increased ore production capacity now available the remnant waste stripping programme has finished, and tailings storage levels are due to recover in the thrid quarter as TD3 repairs complete.

Edison forecasts a profit after tax US$5.6m by end 2012, on 26,000 ounces output. Hambledon forecasts gold production of 80,000 ounces in 2017.

On a base case dividend discount valuation, Edison says Hambledon is worth is 3.49p rising to 4.78p in its first year of 80,000 ounce production forecast in 2017.

Hambledon’s shares stand at a 53 per cent discount to this valuation currently and 57 per cent below NAV.

Kazakh–focused Hambledon Mining’s (LON:HMB) attempt to overturn a fine for a tailings dam leak last year has been boosted after the country’s Supreme Court upheld its appeal.

The gold miner was fined US$3.8 mln after what it says was a minor breach at tailings dam 3 at the Sekisovskoye gold mine in October.

Hambledon paid the fine even though it believed it was too harsh but immediately appealed in the hope of obtaining at least a partial refund.

In a statement today, Hambledon said the Supreme Court of the Republic of Kazakhstan heard its claim on 30 May and “upheld the company’s disagreement over the amount of the fines to be paid, the alleged damage caused and whether any criminal offences were committed in connection with the incident.”

The case has now been sent to the court of primary jurisdiction (Inter-district Economics Court of East Kazakhstan) to be reviewed by a different judge.

Tim Daffern, Hambnledon’s chief executive said:  “I am pleased by the Supreme Court’s decision to support our appeal to oppose the level of fines, review the amount of alleged damage caused by this minor leak and also whether the company is in fact criminally liable for the incident. 

I hope to be able to update shareholderswith further positive developments in relation to the fines in not too distant future.”

Hambledon has a production target of 100,000 ounces of gold this year. In April, it said it expected to complete the remedial works to Tailings Dam 3 by the third quarter of 2012.

Shares rose 5 per cent to US$1.69 pence.

Hambledon Mining (LON:HMB) says the first tranche of US$10 million under the loan agreement with the EBRD is now available.

It comes after the firm met all the conditions relating to this first tranche from the European Bank for Reconstruction and Development.

The firm previously reported that all of these funds will be invested in the development of the Sekisovskoye underground gold mining operation in Kazakhstan.

Under the terms of the deal, US$15 million will be lent in two tranches, which will be repayable in quarterly instalments between January 2015 and October 2017. The loan ceases to be available for draw down in February 2014.

The availability of the second tranche is subject to certain production targets being met.

Hambledon also told investors today that, in addition to receiving US$1.2 million from the liquidation proceeds of Ognevka as announced in April this year, it  has received a further payment of U$300,000 making total proceeds. No further payments are expected.

Hambledon Mining (LON:HMB) reported a positive start to 2012 and said it expects to achieve an increase in gold production from the previous year.

In its full year report, Hambledon highlighted the start of underground mining at the Sekisovskoye deposit in Kazakhstan one month ahead of schedule in November, and the acquisition of Akmola Gold, which it said should lead to a substantial increase in gold production.

The deal remains conditional upon approvals from the Kazakh government.

Last year, the group poured 20,851 ounces of gold after producing 22,802 ounces in 2010. The amount of mined ore increased 2.5 percent and milled ore rose 4.5 percent, however, grades fell 7.7 percent.

On the financial front, Hambledon had US$1.8 million in the bank at the end of the year before raising US$11.5 million in early 2012 via a placing and a US$3 million investment from the European Bank of Reconstruction and Development (EBRD).

The group’s financial performance was affected by an incident at the tailings dam 3, where it discovered a leak in October.

The incident led to a charge of US$7.8 million, resulting in a loss after tax of US$9.4 million on revenues of US$33.3 million, up from US$29 million in the previous year.

“The difficulties of the tailings dam 3 incident overshadowed the company’s business activities in 2011, despite not causing any long term pollution,” said chief executive of Hambledon Tim Daffern.

“The works in 2011 followed a disciplined approach to provide a solid platform from which the company can further develop a sustainable underground operation.”

Hambledon told investors that it expects to be producing more ounces as the output from the underground mine is increasing, while it is drilling further to improve its knowledge of the ore body at Sekisovskoye.

Hambledon Mining (LON:HMB) shares were lifted this afternoon, after it revealed further drill results from the Sekisovskoye underground mine.

The drilling of this ore body began in Q4, 2011 and results from the programme up to May 13 this year include 3 metres at 6.87 gramme per tonne (g/t) gold.

So far, 114 holes have been drilled to date and the latest highlights since the last update include hole 100 with 10 metres at 5.25 g/t of the yellow metal.

Hole 106 showed 4 metres at 6.07g/t gold and 4m with 3.62g/t gold and 1 metre at 28.76g/t.

As at 3.27pm, the firm's shares were up 3.57 per cent, at 2.18 pence.

As well as the drill results, Hambledon updated investors on underground mining activity at the project in Kazakhstan

During April, a further 6,400 tonnes of underground ore with head grade 3.12g/t gold was treated in the processing plant and underground mining activity is now achieving tonnages in line with management expectations, said the firm.

Construction of the main high voltage substation for the next mining block and associated dewatering station are well advance, it added.

The company said that last month it advised shareholders that the bankruptcy proceedings for its subsidiary Ognevka had been completed and it had received US$1.2 million as fulfilment of proceeds to be paid to the creditors. 

Since then, it has received further payments of US$420,000 relating to the bankruptcy process, making total proceeds received by the company of $1.62 million.

To do this, investors should consult the FSA’s website at http://www.fsa.gov.uk/Pages/register/index.shtml.

Hambledon Mining (LON:HMB) shares mounted something of a fight back this morning as it revealed rising gold production for the first quarter at the Sekisovskoye mine.

This year’s production was helped by the efforts to ‘winterise’ operations in 2011. 

Chief executive Tim Daffern described the start of 2012 as a ‘quarter of mixed fortunes’.  Today’s update shows a fairly strong operational performance, and the recent US$3 million investment from the European Bank of Reconstruction and Development was also a welcome boost.

However, as reported last week, during this time Hambledon has encountered a few issues – relating to environmental fines, stalled acquisitions and some operational matter. Consequently the stock lost about a third of its value last week.

After shooting up around 8.5 per cent in early deals the eased back a little and this afternoon shares were changing hands at 1.85p, up 4 per cent.

Fairfax analyst John Meyer reckons there’s value in the shares at these levels, should the current operational performance continues.

“There is a lot of bad news discounted in the Hambldeon share price given the flow of negative news,” he said in a note to clients.

“Management have said that they are meeting their budgets to reach targets for this year of 26,000 oz which includes production from mining 100,000 tonnes from underground production for the full year from 14,504 tonnes achieved so far – should they achieve these there is value in the shares.”

This morning’s first quarter results showed that mined output increased 18 per cent compared with last year to 146,080 tonnes while produced gold ounces grew by 9.4 per cent to 4,870 ounces – 5,029 ounces of silver were also produced. 

The bulk of this comes from the open pit operation and just a modest amount of ore came from the underground mine – which is higher grade. 

But Hambledon highlights that this was the first full quarter of underground extraction and it expects the underground contribution to grow significantly during the rest of 2012.

“It was the first full quarter of gold production from the underground mine which performed in line with expectations and is a solid base from which to grow production,” said chief executive Tim Daffern.

“Extraction from underground remains on schedule to attain a full year target of 100,000 tonnes in 2012 . 

“Because of the extremely cold weather, the first quarter is always the most challenging, but nevertheless the company produced a total of 4,870 ounces gold, an increase year-on-year for Q1 of almost 10% and improvements were seen across a number of key indicators.” 

He adds: “The performance and reliability of the process plant was encouraging during severe weather condition, helped by the winterisation programme carried out in 2011.”

Daffern this morning described the start of 2012 as a ‘quarter of mixed fortunes’.  

Clearly the update shows a fairly strong operational performance, and the recent US$3 million investment from the European Bank of Reconstruction and Development was also a welcome boost.

However, as reported last week, during this time Hambledon has encountered a few issues. 

A deal to acquire neighbouring gold properties has stalled because the transaction has yet to receive approval from the Kazakh authorities, which has indicated its intention to exercise pre-emption rights.

Meanwhile it has so far incurred larger than expected fines from the Kazakh environmental authorities, following the previously reported problems with the number three tailings dam at Sekisovskoye. 

Last week Hambledon said that it had paid US$5.9 million in fines, compared with its estimate of US$1.8 million. However it also told investors that it would be appealing the fines and if successful funds could be reimbursed.

This saw the group’s share price drop around 35 per cent, from 2.78p to 1.8p.

This morning Hambledon confirmed that the remedial work on the tailings dam would be complete by the third quarter of this year. And the company said it remains confident that the fines paid to date would be ‘significantly reduced’.

Work is also ongoing to build a fourth tailings dam, and this is now three quarters complete.

Also the design and construction of a new effluent disposal and treatment building is due to start later in the current quarter. The total project could take 14 months to complete. This system will substantially lower the operating costs of the mineral process plant and effluent disposal, Hambledon said.

Hambledon also reported that gold recoveries in the process plant continue to be below budgeted levels.

It says this relates to fluid chemistry and a change in the ‘hardness’ of the ore. Modifications to the plant are ongoing. Hambledon says this will be complete by ‘mid-2012’ so that higher gold recoveries can be attained.

The ramping up of the underground mining operation is also expected to boost production going forward. 

Hambledon confirmed that underground mining continues as planned. During the year it intends to mine 100,000 tonnes of ore as it establishes a platform of infrastructure for future operations.

Trials of different extraction stope dimensions have been carried out. And the company says this has given sufficient confidence so that bulk mining can be accelerated. The trial operations also allowed grade control methods to be tested, which has ensured that high grade ores were not intermingled with low grade material.

In terms of finance operations Hambledon confirmed that it had raised a total of US$8.6 million during the period through the placing of new shares – as well as its US$3 million ERBD funding.

On top of this it says the conditions for the first US$10 million drawdown of an EBRD debt facility are well advanced and it expected to receive this first tranche by the end of the first half.

Additionally it also confirmed the receipt of US$1.2 million following bankruptcy proceedings against, Ognevka.

Hambledon Mining (LON:HMB) this morning revealed rising gold production at the Sekisovskoye mine.

Mined output increased 18 per cent compared with last year to 146,080 tonnes while produced gold ounces grew by 9.4 per cent to 4,870 ounces – 5,029 ounces of silver were also produced. 

Production was helped by the efforts last year to ‘winterise’ operations. 

The bulk of this comes from the open pit operation and just a modest amount of ore came from the underground mine – which is higher grade. 

But Hambledon highlights that this was the first full quarter of underground extraction and it expects the underground contribution to grow significantly during the rest of 2012.

“It was the first full quarter of gold production from the underground mine which performed in line with expectations and is a solid base from which to grow production,” said chief executive Tim Daffern.

“Extraction from underground remains on schedule to attain a full year target of 100,000 tonnes in 2012 . 

“Because of the extremely cold weather, the first quarter is always the most challenging, but nevertheless the company produced a total of 4,870 ounces gold, an increase year-on-year for Q1 of almost 10% and improvements were seen across a number of key indicators.” 

He adds: “The performance and reliability of the process plant was encouraging during severe weather condition, helped by the winterisation programme carried out in 2011.”

Daffern this morning described the start of 2012 as a ‘quarter of mixed fortunes’.  

Clearly the update shows a fairly strong operational performance, and the recent US$3 million investment from the European Bank of Reconstruction and Development was also a welcome boost.

However, as reported last week, during this time Hambledon has encountered a few issues. 

A deal to acquire neighbouring gold properties has stalled because the transaction has yet to receive approval from the Kazakh authorities, which has indicated its intention to exercise pre-emption rights.

Meanwhile it has so far incurred larger than expected fines from the Kazakh environmental authorities, following the previously reported problems with the number three tailings dam at Sekisovskoye. 

Last week Hambledon said that it had paid US$5.9 million in fines, compared with its estimate of US$1.8 million. However it also told investors that it would be appealing the fines and if successful funds could be reimbursed.

This saw the group’s share price drop around 35 per cent, from 2.78p to 1.8p.

This morning Hambledon confirmed that the remedial work on the tailings dam would be complete by the third quarter of this year. And the company said it remains confident that the fines paid to date would be ‘significantly reduced’.

Work is also ongoing to build a fourth tailings dam, and this is now three quarters complete.

Also the design and construction of a new effluent disposal and treatment building is due to start later in the current quarter. The total project could take 14 months to complete. This system will substantially lower the operating costs of the mineral process plant and effluent disposal, Hambledon said.

Hambledon also reported that gold recoveries in the process plant continue to be below budgeted levels.

It says this relates to fluid chemistry and a change in the ‘hardness’ of the ore. Modifications to the plant are ongoing. Hambledon says this will be complete by ‘mid-2012’ so that higher gold recoveries can be attained.

The ramping up of the underground mining operation is also expected to boost production going forward. 

Hambledon confirmed that underground mining continues as planned. During the year it intends to mine 100,000 tonnes of ore as it establishes a platform of infrastructure for future operations.

Trials of different extraction stope dimensions have been carried out. And the company says this has given sufficient confidence so that bulk mining can be accelerated. The trial operations also allowed grade control methods to be tested, which has ensured that high grade ores were not intermingled with low grade material.

In terms of finance operations Hambledon confirmed that it had raised a total of US$8.6 million during the period through the placing of new shares – as well as its US$3 million ERBD funding.

On top of this it says the conditions for the first US$10 million drawdown of an EBRD debt facility are well advanced and it expected to receive this first tranche by the end of the first half.

Additionally it also confirmed the receipt of US$1.2 million following bankruptcy proceedings against, Ognevka. 

Hambledon Mining (LON:HMB) today confirmed a US$3 million boost from a major investor.

The European Bank for Reconstruction and Development (EBRD) has now paid US$3 million under a share subscription agreement.

In return it will now receive 58.7 million new shares which gives the development bank a 6 per cent stake in the company.

In February, Hambledon announced a deal with the EBRD which could provide the company with over US$20 million to invest in the flagship Sekisovskoye underground gold mining operation in Kazakhstan.

The EBRD agreed terms of a US$15 million loan facility and the US$3 million equity investment, priced at 3.25p each. In addition, Hambledon has issued the EBRD warrants over 30 million shares worth US$2.3 million.

The development bank was created after the Cold War to help ex-Communist countries' transition to market economies. 

It injects about 9 billion Euros a year into projects supporting the development of market economies and democracies in Europe and central Asia. The bank is owned by 61 countries and two inter-governmental institutions.

Hambledon Mining’s (LON:HMB) growth plan may have potentially hit a snag as the acquisition of Akmola Gold has yet to be completed.

In September Hambledon unveiled a US$5 million deal to acquire Akmola, a neighbouring operator of two gold projects. The Tellur and Stepok deposits are located near the firm’s Sekisovskoye mine and it was planned that the ore would be processed there.

The company has told investors that the Kazakhstan state mining firm plans to take a pre-emptive stake in the deal. It also said that certain permits and waivers needed to complete the transaction have yet to be received from the Kazakh authorities.

Because of the delay the sellers are in talks with Hambledon seeking to amend the terms of the original deal.

Hambledon was supposed to have paid a total of US$3 million in respect of the deal by the end of March – with US$2.5 million due to the sellers and US$0.5 million to the government.

None of these payments have been made because of the delays, Hambledon said.

"Despite our disappointment not to have been able to reach a point where we could announce that we were able to proceed with Akmola Gold LLP, our resolve and determination to continue with the development of the UG mine at Sekisovskoye is maintained,” said chief executive Tim Daffern.

Hambledon has also revealed that fines relating to the rupture of a tailings dam at Sekisovskoye, announced in December, are currently US$4.1 million higher than initially thought at US$5.9 million.

The company said that it has appealed against the fine and payments made so far would be returned on the basis of a successful appeal.

More remedial work is also required on the damaged tailings dam although Hambledon says this will result in only a modest additional repair cost.

The additional remedial work means that Hambledon has reduced its 2012 production targets from 30,000 ounces of gold to 26,000 ounces.

“The challenges of resolving the additional remedial works associated with TD3 will constrain the 2012 operations and revised operational plans are being considered to maximise gold production based on the effluent impoundment capacity constraints,” Daffern said.

On AIM today Hambledon shares were down 0.8p, or 28 per cent, trading at 1.98p each.

Hambledon Mining (LON:HMB) plans to raise US$9.06 million through a share placing.

This comes after the European Bank for Reconstruction and Development (EBRD) agreed to provide US$18 million in a mixture of debt and equity last month.

The money will be used to complete the acquisition of Akmola Gold LLP, which owns two gold deposits near the group’s Sekisovskoye mine. 

It will also be used to pay fines relating to the leak at one of the Sekisovskoye mine’s tailings dams as well as repairs to the dam. Additionally Hambledon intends to repay its debt to Alfa Bank, which lent the company money during a period of reduced gold production in the winter months.

“Hambledon can now look forward to the future with a strong balance sheet and a broader shareholder list, including the EBRD and several highly respected investment management group,” said chief executive Tim Daffern.

“With the support of the proposed EBRD debt facility and the new equity raised in the placing, Hambledon is well positioned to become a well funded multiple deposit Kazakhstan focussed gold play.”

Hambledon is looking to issue 177 million new shares, representing nearly 20 per cent of the enlarged group. The new shares will be priced at 3.25p each, a 18.75 per cent discount to yesterday’s closing price.

It said that the placing has been oversubscribed.

“Both the institutional placing and the proposed EBRD funding are highly valued by the directors of the company. We look forward to updating all shareholders with further strong news flow in 2012,” Daffern added.

Hambledon agreed the US$5 million deal to acquire Akmola in September. The acquisition adds the Tellur and Stepok deposits to the group’s portfolio.

These two projects are currently believed to contain 440,000 ounces of gold resources. And they are located close enough to Sekisovskoye for Hambledon to process the ore at the existing plant.

Today Daffern told investors that the expansion of the Sekisovskoye mine is central to Hambledon’s production growth in the future.  

“It is intended that the Sekisovskoye process plant will act as a hub for processing gold from the Tellur project which will leverage the group’s cash generation and gold production,” he added. 

“We look forward to updating Shareholders shortly in relation to final EBRD board approval for the debt and equity investment and completion of the Akmola acquisition."

Fairfax analyst John Meyer called the fundraising effort a success as it enables Hambledon to finance the next stage of development and address the tailings dam issue.

Meyer also said that the investment by EBRD provides a “credible endorsement” for the project, while the environmental and social action plan (ESAP) for the project will remove concerns about the health and safety risks following the recent tailings dam leak.

The analyst expects Hambledon to achieve gold production of 34,000 ounces next year, up from the 2010 output of 21,000 ounces.

Gold production will then increase to 63,000 ounces next year and reach 100,000 ounces in 2015 as the mill operating rate ramps up from 800,000 tonnes per annum in 2012 to 920,000 tonnes in 2015.

At the same time, production costs will fall from last year’s US$750 per ounce to US$520 over the next three years, added Meyer.

Fairfax currently has a target price of 12 pence for Hambledon, representing a 200 percent upside to yesterday's closing price of four pence.

This comes after the European Bank for Reconstruction and Development (EBRD) agreed to provide US$18 million in a mixture of debt and equity last month.

The money will be used to complete the acquisition of the Akmola Gold LLP, which owns two gold deposits near the group’s Sekisovskoye mine. 

It will also be used to pay fines relating to the leak at one of the Sekisovskoye mine’s tailings dams as well as repairs to the dam. Additionally Hambledon intends to repay its debt to Alfa Bank, which lent the company money during a period of reduced gold production in the winter months.

“Hambledon can now look forward to the future with a strong balance sheet and a broader shareholder list, including the EBRD and several highly respected investment management group,” said chief executive Tim Daffern.

“With the support of the proposed EBRD debt facility and the new equity raised in the placing, Hambledon is well positioned to become a well funded multiple deposit Kazakhstan focussed gold play.”

Hambledon is looking to issue 177 million new shares, representing nearly 20 per cent of the enlarged group. The new shares will be priced at 3.25p each, a 18.75 per cent discount to yesterday’s closing price.

It said that the placing has been oversubscribed.

“Both the institutional placing and the proposed EBRD funding are highly valued by the directors of the company. We look forward to updating all shareholders with further strong news flow in 2012,” Daffern added.

Hambledon agreed the US$5 million deal to acquire Akmola in September. The acquisition adds the Tellur and Stepok deposits to the group’s portfolio.

These two projects are currently believed to contain 440,000 ounces of gold resources. And they are located close enough to Sekisovskoye for Hambledon to process the ore at the existing plant.

Today Daffern told investors that the expansion of the Sekisovskoye mine is central to Hambledon’s production growth in the future.  

“It is intended that the Sekisovskoye process plant will act as a hub for processing gold from the Tellur project which will leverage the group’s cash generation and gold production,” he added. 

“We look forward to updating Shareholders shortly in relation to final EBRD board approval for the debt and equity investment and completion of the Akmola acquisition."

Hambledon Mining (LON:HMB) said today that the latest drill results from its Sekisovskoye underground gold project in Kazakhstan provided “robust” confirmation of the geological model.

The main intersections from December’s drilling were 9m at 4.86g/t gold, 2m at 3.5g/t gold and 4m at 2.62g/t gold.

The drill results and mined grade compare favourably to ore body number 11 where mining started in late 2011 and that will be mined in 2012, Hambledon said.

“The results are consistent and in many areas exceed the geological and mineral resource modelling previously carried out,” it added.

The Sekisovskoye deposit comprises approximately ten large mineralised zones intermingled with numerous "narrow and sinuous" mineralisation zones.

A cumulative total of 67 holes have now been drilled over 9,000 metres in the upper levels of the underground ore zones.

The group added that good progress has been in made in expanding the underground mining zones with three levels being mined at present and a fourth due to commence in early February.

Ground conditions and water inflow within the excavation zones indicate that bulk mining later will be technically feasible.

A significant programme of geological and rock mass characterisation is to be undertaken with a team of UK geologists arriving to carry out a three month programme of specific structural mapping.

Hambledon’s target is for production from Sekisovskoye to rise progressively to 100,000 ounces per year.

Hambledon Mining (LON:HMB) told investors that the European Bank for Reconstruction and Development (EBRD) may potentially invest up to US$20 million to help the firm develop the Sekisovskoye underground mine.

It is proposed that the EBRD would provide a US$15 million debt facility, as well as making a US$3 million equity investment and receive warrants worth US$2 million.

“We are very pleased by the prospect of this partnership with EBRD,” said chief executive Tim Daffern.

“The Board is excited about the future of the company which can only be enhanced by having the backing of a lender and investor of the stature of EBRD.”

The company said that final approvals for the proposed investments are expected in the middle of the current quarter.

Hambledon operates the Sekisovskoye gold mine in eastern Kazakhstan.

The EBRD was created after the Cold War to help ex-Communist countries' transition to market economies. It injects about  billion Euros a year into projects supporting the development of market economies and democracies in Europe and central Asia. 

The bank is owned by 61 countries and two inter-governmental institutions.