OREANDA-NEWS. July 27, 2011. With the gold price hitting a new record-high this month (up 9% since the early July low to around USD 1,610/oz) we turn our focus to gold. We have ignored PLZL (driven by KazakhGold's RTO) and PMTL (the share price already reflects recent gold and silver price gains). HGM and HRG may offer some upside following recent corrections. Pay particular attention to POG which reported 2Q11 operating numbers last week (gold output up 90% QoQ to 144koz). 1H11 production of 219koz means that around 65% of its FY11 target output (600koz) must come in 2H11, which sounds challenging. However, POG appears better at project execution this year (capacity adds at Pioneer; early start-up of the second crushing and grinding line at Malomir) which may help it to hit the target. POG's 3Q11 production Update is expected on 20 Oct.

In mid-July PhosAgro (PHOR) launched its IPO, offering 10.3% of its existing stock, priced at USD 420/share (USD 14/GDR). With the majority of its production assets located in Russia, PhosAgro is a vertically- integrated holding which produces phosphate-based fertilisers (MAP, DAP). Sales of these fertilisers accounted for almost 90% of its 2010 revenues. We believe that PhosAgro has a respectable set of assets and a sound financial profile. At the IPO price its market capitalisation stands at USD 5.2bn and we estimate that with a FY11 EV/EBITDA of 5.9x the company could become a highly interesting exposure to the Russian fertiliser industry and may even compete with Uralkali and Acron for investors’ funds.