November 02, 2010
Looking back on it now, ‘lunacy’ is the word that springs most readily to mind. It was Easter 1967. I was just sixteen and had signed up to go on a school trip to Russia for the holidays. I say ‘lunacy’ because the idea of taking a bunch of Etonians to Russia would be a tall order under any circumstances; taking a gang of rampant teenage Etonians (the tail-suited male equivalent of St. Trinian’s) to Moscow, Leningrad, and Kiev in 1967, was brave if not bordering on insanity. Russia was deeply communist in those days. They were suspicious of everything Western, and it was harder to get into than Sudan is today. We were issued a comprehensive list of rules and instructed to be on our best behavior at all times. The chances of our abiding by those rules was as likely as Jacques Mesrine agreeing to behave himself in prison. Knowing that Russian students were mad for Beatles records and trendy clothes, we were all armed to the teeth with blue jeans, chewing gum, and 45s of “Please Please Me” and “From Me to You,” which we sold for a whopping great profit. At that time there were only half a dozen of us studying Russian at Eton, which we played to our advantage, sneaking out at night to visit girls and get drunk on repellent sweet champagne and vodka shots. As we were constantly followed, it seems incredible that none of us got into any serious trouble, but somehow we avoided it.
Instead it turned out to be the trip of a lifetime, the memories of which remain as clear today as they were forty-three years ago.
When you are sixteen, your concern for safety and comfort is happily scant, for every hotel was colorless and dingy, with hospital beds to sleep in and light bulbs hanging loose from the ceilings. Much to our delight, the corridors were patrolled by female impersonators sub-impersonating Rosa Klebb and an endless supply of murky men in leather coats and matching hats. It was perfectly wonderful. One thing was absolutely sure, and that was that the chances of seeing, or better still getting to know, a pretty girl were zero. There was no such thing as makeup in Moscow, and most of the girls wore boiler suits or mid-length eau de nil serge skirts. A far cry from today! Oh where, oh where were they hiding?
Apart from the Hermitage museum’s treasures and the Winter Palace’s decadent beauty, we enjoyed watching men fishing through holes in the frozen Neva River and visits to GUM, the Russian equivalent of Harrods pour les pauvres. By the greatest piece of good fortune—for us, that is, but not for him—Marshal Malinovsky had died at the start of our visit, possibly because of it, and he was to be honored with a state funeral in Red Square. Rodion Malinovsky was a Soviet legend, a veritable “hero of our time.” His war record was truly impressive; it was Malinovsky to whom Stalin entrusted command of the 66th Army at Stalingrad. After World War II, he was appointed commander of the Transbaikal-Amur Military District in Russia’s Far Eastern region, as wild and savage a place as any on the globe.
Moscow overnight became filled with men in uniform, and for us boys the sight of so many soldiers marching through the streets was utterly mesmeric.
Apart from my trip that Easter, I was not to return to Russia for almost half a century. My destination when I did so was Eastern Russia, to a region containing proven mineral reserves estimated to be worth $400 billion.
Petropavlovsk (LSE: POG), Russia’s third-largest gold mining company, is a London-based outfit operating in Eastern Russia’s Amur Region. The company works open pit mines. To extract the ore, grids of holes are drilled, dynamite is inserted, and the ore is then blasted. Petropavlovsk was founded in 1994 by British banker Peter Hambro and Pavel Maslovskiy, once a professor in plasticity at the Moscow Aviation Institute. The company has two principal mines at Pokrovskiy and Pioneer and is busy developing others. The recently commissioned Pioneer operation is both impressive and well organized. The company has overcome uncertainties about equipment availability and the normal commissioning problems. Their aim is to achieve strong growth in gold production over the next three years, and the signs say they will achieve it. The geological team is already working on new non-refractory ore zones in the northeast corner of its mining license at Malomir and in the eastern part of the license. Albyn is Petropavlovsk’s next major gold project, scheduled to contribute 200,000 ounces per annum from 2012 as part of the company’s growth plan.
Recently Petropavlovsk’s share price has dipped due to problems reaching its IPO target for a Hong Kong listing of IRC, Petropavlovsk’s iron-ore unit. I believe this is no more than a temporary blip and makes Petropavlovsk, currently trading at around 939p on the LSE, a good-looking prospect. A target of 1,500p looks easily achievable.
Of the other stocks we have been following since August, Aquarius Platinum, which was at 305p on September 6, is currently at 373p. Petra Diamonds, at 65p on August 12, is currently at 101p. Kenmare Resources, at 19p on September 28, is currently 21p.
A very satisfactory state of affairs.
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