Peter Hambro, descended from a wealthy line of Anglo-Danish bankers, recalls receiving a bottle of whisky as a gift from his mother’s gardener.

It was a token of thanks after seeing a good return on his investment in Hambro’s Russian gold mining business. “I’ve made so much money, the least I can do is give you a drink,” Hambro, 70, remembers the gardener saying at the time.

Those days are long gone.

Petropavlovsk Plc, once worth more than $3 billion as the price of gold it dug in the Russian Far East soared, has lost 99 percent of its value in the past five years. For anyone who has hung on from the start, it has been an astonishing ride as the stock rocketed more than 10-fold from its listing price in 2002, before losing all of those gains and more. The company is forecast to post a third straight annual net loss for 2014.

Banks and fund managers squeamish of the risks have fled.

Retail investors now own about 80 percent of the business by Eton-educated Hambro’s reckoning. He needs them to back a rescue plan, while acknowledging the anger some may harbor for past losses.

Management proposes to sell bonds and about $235 million of shares at a deep discount to the market price to reduce debt and fend off default at Russia’s third-biggest gold producer. Even the announcement of the plan on Dec. 8 sent the stock into a tailspin, with shares ending the day down a record 30 percent.

Diluted Interest

The refinancing will cut Petropavlovsk’s debt by more than $200 million, and by producing as much as 12 percent more gold this year at $200 an ounce cheaper than in 2014, the miner will make further inroads, it says.

Shareholders will have the option to take up more than 15 new shares at 5 pence (7.7 cents) a piece for each one they already own. Those that decline the offer of new stock will face a near homeopathic dilution of their interests.