Gold Miner Peter Hambro First-Half Profit Soars

A good relationship with the Russian authorities helped London-listed company Peter Hambro, Russia's second-largest gold miner, post soaring first-half earnings, the company's CEO told "Squawk Box Europe."

Many foreign companies have fallen foul of government rules in Russia and have seen licenses revoked.

"We've worked very had on understanding what it is (the Russian authorities want) and trying to get them to understand what it is we need to do as producers," Peter Hambro, executive chairman at Peter Hambro Mining, told "Squawk Box Europe."

The London-listed miner also managed to keep costs down in the face of soaring Russian inflation. This, together with a 28-year high in the price of gold, helped the Russian-mine operator to post a 75% rise in first-half profit.

"The really big achievement is to have controlled costs as well as we have done," Hambro said. "Producing more units reduces your unit cost."

The group's gold output rose 24% for the period, in line with expectations, and full-year targets remained intact.

Hambro sees no let up in the current gold-price rally.

"There is a big demand for physical gold … and that means the price will go up. I think it will beat its all time records in the relatively near future," he said.