Peter Hambro eyes Russian greenfield sites

By John Bowker

LONDON (Reuters) - Russia-focused gold miner Peter Hambro Mining POG.L plans to stick to acquiring greenfield sites rather than buying gold producers, and is not considering expanding into China for now, its head said on Wednesday.

Executive Chairman Peter Hambro told the Reuters Global Mining Summit in London that the firm considered it cheaper to buy undeveloped assets from the Russian government rather than acquiring mines already in production, although more than 600 gold producers operate in the country.

"We will continue to buy greenfield sites. Buying from the state -- assets not used by anyone else -- is a relatively inexpensive way of doing it," he said.

Peter Hambro is Russia's second-biggest gold producer, with an aim to boost output to 1 million ounces a year by 2011 -- a target put back by a year in January.

Its shares were down 0.5 percent at 1360 pence by 11:45 a.m EDT, valuing the business at 1.1 billion pounds.

Hambro said China remains outside his ambitions for now, despite the group's close proximity to the border and the prospect of abundant mineral resources there.

"We are not seriously looking at it. Could we do it? I suppose so ... (but) there is a friction cost of going outside your back yard," he said.

However, he added that the group had several links to the world's most populous country, now also the biggest gold producer, including through iron ore firm Aricom (OREA.L: Quote, Profile, Research, Stock Buzz), which was spun out from Peter Hambro.  Continued...